AGRI Committee Meeting

     I call the meeting to order.

    Welcome to meeting number 12 of the House of Commons Standing Committee on Agriculture and Agri-Food. Today’s meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

    Before we continue, I'd like to ask all in-person participants to consult the guidelines written on the cards on the table. These measures are in place to help prevent audio and feedback incidents and to protect the health and safety of all participants, including the interpreters. You will also notice a QR code on the card, which links to a short awareness video.

    I'd like to make a few comments for the benefit of witnesses and members.

    Please wait until I recognize you by name before speaking or are asked a question directly by a member. For those participating by teleconference, click on the microphone icon to activate your microphone, and please mute yourself when you are not speaking.

    For those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation: floor, English or French. For those in the room, you can use your earpiece and select the desired channel.

    I will remind you that all comments should be addressed through the chair.

    Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, the committee is resuming its study of the government’s regulatory reform initiative in agriculture and agri-food.

    I would like to welcome our witnesses joining us here today: Dr. Charlebois, from the Agri-Food Analytics Lab; Serge Buy, from the Agri-Food Innovation Council; and Ron Lemaire, president, Canadian Produce Marketing Association.

    I'll give each person up to five minutes for opening remarks and then we'll proceed to the first round of questions.

    We'll start with the Agri-Food Analytics Lab.

    Thank you, Mr. Chair.

     Thank you for the invitation, committee members.

    I'll ask the committee to disregard my opening statement, because I actually wrote an opening statement for another session. I've made some notes that are going to be relevant to today's session about bureaucracy and the administrative regime that impacts our agri-food sector's competitiveness overall.

    I'll make three points to start things off today: Canada's competitiveness compared with other G20 countries right now, taxation and shrinkflation.

    Let's start with point number one, Canada's competitiveness. Recently, we had the pleasure to prepare a report with the firm MNP. A document was submitted to the clerk in both English and French.

     The abstract of the report is simply this: Canada's competitiveness is actually strong right now. Out of 20 countries, including those in the EU, Canada ranks number seven within that group. It is the number one country within the second tier. There are lots of things that are going our way when compared to other countries, and I would say traceability and food security overall.

    Three things came up in our report that probably would warrant some attention from the government.

     First is that there is a tendency in Canada to use policy to build competitive advantages to allow our farmers and processors to compete. Based on what we've seen elsewhere around the world, other countries don't necessarily use policy to build competitive advantages. It is our belief that if you do that, it simply is not a competitive advantage.

    Second is the lack of capital investment. From the public sector, it's been quite decent in the last several years, in particular with the superclusters. Protein Industries Canada is a good example of a supercluster that I believe is working well for our farmers and the sector, but the lack of private capital is really hurting our competitiveness overall when compared to other countries around the world.

    Third is infrastructure. Our infrastructure is in dire need of investment. From ports to railroads to roads, there is a severe deficit of investment across the country, from the Maritimes, where I am, to B.C. Some of our ports are ranked the worst in the world when it comes to efficiency.

    Point number two is about taxation. Our fiscal regime in Canada is burdening our companies, farmers and consumers. A lot of products are taxed at the grocery story and taxed at the restaurant. I certainly would recommend that this committee look at taxation overall, from farm gate to plate.

    The GST holiday policy earlier this year was a good example of how fiscal policy can actually impact food affordability. Based on our evaluation, when the GST holiday was implemented in December, it allowed for some opportunistic pricing to occur, meaning that a lot of companies raised prices to occupy that gap, and when the GST holiday ended in February, the GST was slapped back on higher prices. We need to be careful with taxation, because it is a powerful tool that is actually controlled by the government.

    Point number three is shrinkflation. Because of shrinkflation, there are more products being taxed. There are a lot of products that are considered food, and when they get smaller, according to the CRA rules, they become snacks, and snacks are taxable. A growing number of products are being taxed at retail.

     The worst part of shrinkflation, I would say, other than the fact that consumers are annoyed by the practice, is that fact that Statistics Canada's ability to assess inflation I think is flawed. We believe that inflation often is underestimated by Statistics Canada. Because of shrinkflation, when you look at the basket of goods, you often see that quantities don't reflect exactly what's in the grocery store, for one, and, based on our analysis, Statistics Canada often lags in terms of assessing the true measure of inflation.

    On that, I'll stop now and allow other witnesses to testify. Thank you.

    Thank you very much, sir.

    Next we'll go online to Mr. Buy.

     Thank you very much, Mr. Chair.

     On behalf of the Agri-Food Innovation Council, I would like to express our sincere appreciation for the opportunity to appear before you today and contribute to this important discussion. We've also submitted a written brief, which we hope you've received and which outlines our key recommendations in greater detail.

    In preparing for today's presentation, we consulted with our members and stakeholders. Their insights, gathered through recent outreach and ongoing dialogue, have shaped the perspectives that I'll be sharing.

    Let me begin by acknowledging a fundamental truth: Canada has a robust and respected regulatory system. This reputation is built on the dedication and professionalism of those working in agencies such as the Canadian Food Inspection Agency, the Pest Management Regulatory Agency, the Public Health Agency of Canada and Health Canada. The provinces and their own agencies also play a vital role in upholding those high standards.

    Equally important are farmers and ranchers, whose commitment to excellence is central to Canada's standing in global agri-food markets. They depend on the work of those agencies, as well as the innovation and investment from companies that bring new products to market. Those companies invest heavily in research and development, driving progress and helping our sector remain competitive.

    That said, we must also recognize that our regulatory system faces challenges. It's difficult, in fact, to find a parliamentary report on agriculture, food exports, value-added products or innovation that doesn't include recommendations to reform the regulatory framework.

     Many of those reports highlight the burdensome nature of the current system and call for action to remove barriers to innovation, trade and growth. While some progress has been made, such as the much-needed changes introduced in the 2024 feed regulations, there is still work to be done, as noted by the Animal Nutrition Association of Canada.

    Let me share a few examples of the challenges our sector faces.

    Some companies, despite having products approved in larger markets, choose not to pursue approval in Canada due to the complexity, cost and time involved. As the Beef Farmers of Ontario have pointed out, this puts our producers at a competitive disadvantage. The lack of coordination across jurisdictions creates unnecessary hurdles for Canadians. Take, for instance, the restricted feeder cattle program, an example of how fragmented regulations can impede progress.

    How do we move forward? Our brief outlines two key recommendations.

     First, introduce updated governance standards for regulations, including regular reviews, burden reduction targets, improved coordination across jurisdictions and greater transparency. Those measures will support innovation and reduce compliance costs.

     Second, accelerate regulatory approval timelines for agri-food products by increasing reviewer capacity, leveraging AI-assisted risk screening and recognizing approvals from trusted international jurisdictions. This will help avoid duplication, reduce delays and enable faster market access for safe and innovative products.

    The outcomes of those recommendations will be reduced compliance burden; increased investor confidence; fewer barriers for small businesses looking to innovate; greater public-private collaboration; faster time to market for agri-food innovation; stronger collaboration between regulators and investors; and improved capacity and efficiency in regulatory agencies.

    One tangible and actionable solution would be to create a national agricultural regulatory council. This body, composed of federal and provincial and industry representatives, could work collaboratively to identify and resolve regulatory inconsistencies, promote harmonized standards, support joint innovation initiatives and foster regional innovation clusters. The result? A more streamlined, responsive and future-ready regulatory system.

    Thank you for the opportunity to speak today. I look forward to your questions and to working together to strengthen Canada's agri-food innovation ecosystem.

     Thank you very much.

    Next is Mr. Lemaire.

     Good afternoon, and thank you, Mr. Chair and committee members, for the opportunity to appear on behalf of the Canadian Produce Marketing Association.

    The fresh produce supply chain is one of the most globally integrated in the world. To ensure the ongoing viability of Canada’s food system, we need a strong, cohesive domestic and internationally focused regulatory framework that supports free and fair trade. Canadian businesses rely on rules-based trading that enables the movement of safe high-quality fresh fruits and vegetables across provincial and international borders.

    We're very supportive of the government’s red tape review, which is both timely and necessary to strengthen our sector’s competitiveness.

    The CFIA’s recent omnibus regulatory package on labelling and grade standards serves as a clear example of the effective regulatory modernization achieved through consultation and collaboration with industry. It also demonstrates the importance of federal leadership, as many of the improvements included had been discussed for years without resolution. It was only when a clear directive came from the Prime Minister's Office and the Minister of Agriculture and Agri-Food to prioritize regulatory reform that meaningful progress was achieved.

     The result of this leadership, combined with strong government and industry collaboration, is a regulatory package that alleviates a significant burden for the fresh fruit and vegetable sector.

    We are encouraged by the renewed sense of urgency within government to address red tape and regulatory burden. At the same time, we must emphasize the importance of industry consultation to avoid unintended consequences in expediting regulatory reform.

     For example, while the goal of improving internal trade is important, applying the provisions of the Free Trade and Labour Mobility in Canada Act too broadly risks creating new barriers to trade by deferring to a patchwork of provincial and territorial frameworks in critical areas such as food safety, plant protection and organic standards.

     Canada’s Safe Food for Canadians Act and the regulations already provide a strong world-class federal foundation for food safety and quality, and it's essential that this framework be maintained. CPMA therefore recommends that they be excluded from the application of the new act to prevent unintended consequences that could undermine food safety or erode confidence in Canada’s reputation as a trusted supplier of safe food.

    We also want to highlight the real-world impact that inconsistent or regionally based frameworks can have on trade. For example, Quebec’s Law 14, previously Bill 96, creates challenges for fresh produce moving across Canada and into the country. The requirement to translate trademarks on packaging introduces significant complexity and cost and is likely to lead to reduced availability of fruits and vegetables for consumers when foreign exporters are unwilling to modify their packaging to comply with province-by-province rules.

     In a world in which we want to reduce food prices and ensure Canadians have access to healthy food year-round, this is exactly the kind of costly requirement that a harmonized national regulatory approach is designed to prevent. We have also seen first-hand the challenges that arise from the overlapping of regulatory responsibility across departments, making it difficult for industry to navigate processes and identify clear points of accountability. Greater cross-departmental coordination would help ensure timely and consistent outcomes for everyone.

    Looking ahead, there are several key areas we'd like to note for future work: expanding joint reviews for crop protection products, as identified by the PMRA in their recent report; advancing regulatory co-operation and alignment with key trading partners in areas such as plant health and being mindful of emerging issues like packaging requirements; and applying a cross-department competitiveness lens to ensure coordination across departments, reduce consultation fatigue and improve the quality of industry input.

    Finally, when we talk about the structure of regulation, whether federal or provincial, we believe it’s important to provide the right tool for the right issue and to consult with industry to help make that determination. For trade-enabling areas like food safety, fragmented oversight would be deeply problematic. Consistency and national standards are essential. In other areas, such as plastics reporting, where provincial mandates are clearly established and data is already being collected, applying additional and duplicative federal plastics registry requirements creates administrative burden and red tape for our food industry and, ultimately, added costs to the end product, without benefit.

    In closing, we appreciate the opportunity to participate in this important discussion. I look forward to questions.

     Thank you very much.

    We appreciate all of the witnesses joining us here today.

    We'll start with the Conservatives for six minutes.

     I'll go to Mr. Barlow.

    Thanks, Chair.

    Thank to our witnesses.

    Mr. Buy, you were talking about the need to accelerate approvals of certain products. That's interesting.

     I had a meeting with the Alberta irrigation districts last week. They have a herbicide they want to use and that they've been asking for decades to have. In fact, it has been used in the United States since the 1960s, but still, the PMRA has blocked approvals here. We've also heard from the PMRA that it takes up to 12 years to get products approved in Canada.

    For the Innovation Council, have you done an analysis of the economic impact these types of delays have had on innovators and on the agriculture industry in Canada?

    No. Sadly, we haven't done that analysis, but we have heard many times that the delays in approvals of products have been detrimental not only for innovation but for our economic competitiveness. That is indeed a significant challenge for everybody.

    You appeared before the committee in the last Parliament, and we talked about the Liberals' border carbon tax, which they had once again in their election platform. They are talking about implementing that again. With the current tensions with our trading partner south of the border, would this be a good time to implement a border carbon tax?

    No, I still don't think it would be. I think that at this point most of the industry believes in a harmonized approach on this. In the end, should we decide to go in that direction, I think it's going to end up hurting our own Canadian consumers, drive inflation even higher and create more challenges for everybody than needed. I'm not sure taxes are the answer to everything in this case.

    Yes, at that appearance, you recommended not going ahead with the border carbon tax because of the inflationary measures it would have and the increasing food costs for consumers. Do you still stand by that recommendation?

    One hundred per cent.

    Dr. Charlebois, thanks for being so nimble in your presentation today.

    On a similar line of questioning, you published a research paper last year on the carbon tax and its impact on the supply chain.

    They still have an industrial carbon tax in place. Have you done any work in terms of the impact of the industrial carbon tax on the supply chain and the food costs in Canada?

    Our study, if you recall, was focused mainly on the industrial carbon tax: the part that most consumers don't see. That's been our concern from day one in looking at wholesale prices.

    Since the publication of both studies—because we published two studies, two papers—the gaps between wholesale prices in Canada versus the U.S.—food wholesale prices—have actually increased. We believe that one factor driving this is the carbon tax, so we're very concerned.

    Of course, we're looking at food prices into 2026 right now with “Canada's Food Price Report”. Again, at this point, we feel that we actually may provide Canadians with some bad news for 2026. We are expecting food inflation to continue to be a problem moving forward.

    Are you going to give us the answer before the report comes out on December 4 on what the—

    Not yet—on December 4, I promise.

    Okay. We have to wait. That's fair.

    It's interesting that you raise this, because timing is everything. This came up a number of times during question period today in terms of the industrial carbon tax, the front-of-pack labelling and the plastics on food ban, and the impact this has on food prices. The Liberal ministers, in their responses, said that “here are the Conservatives again, talking about imaginary taxes on food”, but you yourself have said in your research that the industrial carbon tax does have an impact on food prices.

    Would you say the same about the front-of-pack labelling and the P2 plastics ban? The Deloitte study said that, combined, there would be about $14 billion in additional costs. Would you agree with that assessment from Deloitte and that the industrial carbon tax would have an impact on what consumers are facing on the grocery store shelves?

    I would, yes. I do appreciate why the government is doing what it's doing—because it wants to better products and it wants to be seen as a good environmental steward—but at the same time, with more policy come more red tape and more cost.

     This is the trap that we've fallen into several times over the last few decades, and here we are now. If you look at, say, the G7 right now, we're the only country within the G7 that has seen four consecutive months of a food inflation rate increase. We're not going in the right direction right now.

     I appreciate that.

    Mr. Lemaire, I know this is right up your alley. You've talked about this a lot, too. Although the government is talking...these are imaginary increases, I'm assuming that you would agree that a P2 plastics ban, the plastics registry and the front-of-pack labelling are all having an impact on the costs that consumers are facing at the grocery store.

    You have 30 seconds.

    [Inaudible—Editor] driving change.

     The other issue is that we should start looking at the administrative burden with regard to the registry. Last week, Environment and Climate Change Canada was at an event and noted that there were only 1,000 companies registered for the plastics registry nationally. The last time I looked, there were many more companies than 1,000.

    Why don't we have a high pickup? It's because of the burden, the cost and the challenge in actually understanding how they go through the process when they're already involved in EPR programs in many of the provinces.

    Thank you very much.

    Next, we'll go to the Liberals for six minutes.

     MP Dandurand.

    Thank you, Mr. Chair.

    Many thanks to the people who made themselves available to testify today.

    Mr. Buy, in your opening remarks, you alluded to a national agriculture council that would be made up of the federal government, the provinces and territories, and industry. Could you expand on that a bit?

    Mr. Lemaire, I would then like to hear your comments on the subject, since you also alluded to something similar.

    Mr. Buy, first of all, could you give us a better idea of what you have in mind?

    Obviously, there are differences among the provinces. In addition, some provinces sometimes have concerns about what is being done at the national level. What we mainly see from time to time is a lack of coordination and co‑operation, causing pretty serious delays and concerns among innovators. You've heard a bit about how some things are approved by some authorities and not others.

    The idea is to have a discussion forum or an implementation forum where decisions could be made about regulations and innovation could be improved in this area. The idea has been put forward by a number of people, and we are absolutely in favour of it.

    That's a good question, Ms. Dandurand.

    We need federal-provincial alignment. The concept being put forward by my colleague and others, I think, will provide us with clear strategies to bring together not only federal-provincial regulators but also industry to be able to talk to the challenges.

    There was a comment made around the registration of new tools for production in Canada. We're a market of 42 million people. We're not significant enough for the complexity of registration and the time and cost of implementation.

     This isn't a new issue; this is a long-standing issue. How do we bring together a strategy where we can have an acceptance of equivalency with the right due diligence to implement? A regulatory council that can begin looking at how we bridge not only that area but others, whether it looks at regulatory infrastructure challenges we're having or at pest risk.... There is a range of tools we can use.

    I like to use the example of the Regulatory Cooperation Council that was created years ago between Canada and the U.S. We need to take a similar approach and bring that together within a Canadian context.

    That's very interesting. That brings us to plastics reporting, which we hear about on a regular basis. I think the industry is well aware of that and agrees with it. In fact, it is already on board. Now we're adding a second layer, and there are differences between the provinces.

    Are the provinces currently at the same level when it comes to plastics reporting?

    How could this be applied at the federal level later on?

    At a federal level, the concept.... As Dr. Charlebois noted, the government is trying to do the right thing. Everyone recognizes that. However, it's applying a stick when it should be using a carrot and working with the provinces to take the data. Not all provinces report in the same way, but the data is available. It takes a lot more time to navigate all the provinces—and that's what I think happened here—which puts the burden on business.

     I can give you an example. Three of our Quebec members came to us basically saying that they had to hire a full-time person just to try to navigate the data and put that in place. That would have been money that they could have saved and reinvested in the business in other ways to drive more sales and more products into the Canadian marketplace.

    The give-and-take that's happening right now is a challenge. I think that when you have data already existing at the provincial level, it's about how you mine that data and about how the federal government, through ECCC, works effectively to collect and generate the data reports they need.

    I just want to make sure of one thing. Does the need to have employees to do this work also stem from the fact that the regulations aren't identical from one province to another and that plastics reporting must therefore be done differently in each province and also at the federal level?

     Yes, there is some diversity. This is part of the harmonization of the EPR systems across the country, which is another discussion that has to happen and that is moving forward, so it's very complex. However, the opportunity is there to align those pieces, because other challenges we're having right now are with how these systems are provincially operating and whether they are truly effective in delivering the sustainability outcomes that they are supposed to be delivering.

    The combination is twofold: Strengthen the EPR systems provincially and expand more broadly, and bring the data from those EPR systems into a national repository that you could then mine and use to develop policy.

    Do I have any time left, Mr. Chair, or is that it?

    You have nine seconds.

    I'll give the nine seconds to Mr. Perron.

    Thank you.

    Mr. Perron, you have six minutes please.

    Thank you, Mr. Chair.

    Thank you to the witnesses for making themselves available to be with us today.

    Mr. Lemaire, I'll start with you. In your opening statement, you said something that piqued my interest. You represent the Canadian Produce Marketing Association, so you're speaking for all of Canada. However, you told the committee that we should stop translating food labels because it costs too much.

    Do you realize that, if that were the case, about 25% of the population would not be able to read the labels on the products they buy?

    That's a good question.

    It is a good question, isn't it?

    It wasn't a comment around translating all of the label. We have appropriate labelling laws in Canada that address the French language rules and the identification of product to ensure that Canadians understand what they're purchasing.

    The provincial rule that's being put in play is solely a trademark discussion, an alignment around the trademark itself, which actually doesn't apply to the quality of food or the safety of the food. This is where the rule goes beyond the requirement of a labelling direction that provides Canadians with clarity on what they're eating.

    I take your point, Mr. Lemaire. However, in life, some things are essential. Canada has two official languages. Each jurisdiction, particularly Quebec's, is fully entitled to legislate in these sectors. Everyone on the committee agrees on harmonizing standards across the provinces as much as possible. We all know that certain essential local requirements will remain. That said, sometimes things have a cost. For example, people who interpret into English what I'm currently saying in French don't do this work for free; it costs money.

    I just wanted to add that caveat. That's the first time you've said that, and it got a rise out of me. At the end of the day, we agree that this is important and that people have the right to read labels properly, right?

    Yes. However, there are certain considerations.

    In Colombia or Peru, they make a decision on whether they want to sell to Canada a product we can't grow, and that's the challenge we're having now, based on those regulations. It's not to have a discussion or a debate on language but to have a debate on opportunities for trade and for access to what new Canadians are looking for in Canada. That's the bigger challenge.

    We could talk about this for a long time. I'm not sure that the people of Alberta would like to see labels on products in French only.

    That's different.

    Let's talk about something else that's more constructive.

    A number of people have suggested setting up a national regulatory council or a new structure. We all want more coordination within the country, without impinging on anyone's jurisdiction, of course. I think I've been clear on that.

    Apart from that, stakeholders have told me they fear the new structures will be too onerous. Some have told me that they don't want to see new structures set up because there are already structures in place. It's just that they're not effective. In short, they want us to work to make the existing structures effective, not to create new ones.

    What do you think? Maybe we should work toward that. We should improve the efficiency of the Pest Management Regulatory Agency, for example, and reduce delays in that area. The resources should go there, not toward setting up new structures.

    Yes, efficiency is key. How do we drive efficiencies in the system? I think the questions around the regulatory burden and efficiencies are hand in hand. You can't have one without the other.

    The bigger question comes back to this. How do we find efficiencies in the system, and how do we do so in a way that has regulatory enablement? We heard already, through some of the discussions, that to do so accelerated timelines on regulations to, again, improve efficiencies and drive change. How are we looking at redundancy of regulations—federal and provincial—and how are we going to address those changes moving forward?

    Thank you, Mr. Lemaire. I apologize for rushing you a bit, but I want to hear from Mr. Charlebois as well on the issue of whether we should focus on existing structures. Rest assured, Mr. Lemaire, you said some things that I liked, including about the existing registries in the provinces. We don't have to redo the work and create new registries. You see, we're not such bad friends.

    I'll let you give us your opinion on the matter, Mr. Charlebois.

    I somewhat agree with you on that, Mr. Perron. In terms of bureaucracy, I'm not sure we need to make governance even more onerous by setting up another entity. I'm not comfortable with that.

    However, I have always thought that our public policy approach should be reviewed. As soon as a new law or regulation comes into force, we have to assess the costs and benefits of our decisions. In the past, the process hasn't been rigorous enough, so that's what I would change.

    You're right, it doesn't happen all the time.

    Mr. Buy, I'd like to hear your opinion on the same issue.

    To add to what Mr. Charlebois said, I would say that we're not talking about setting up a new superstructure and adding 50 deputy ministers, assistant deputy ministers and so on to the bureaucracy. The idea is to use the people who are already there to improve coordination and co‑operation, to work faster, more simply and more efficiently, and to process some files more quickly.

    I completely agree with you when you say that one of the first things to do is review the effectiveness of the existing organizations. In fact, we've been asking for that for nearly 20 years and approaching the government to say that it has to be done. We could give you many examples of inefficiency, duplication of work and other problems.

    That said, at the point when we move forward on certain issues, it would be good to have a national structure to ensure coordination, while ensuring respect for provincial jurisdictions and everyone's identity.

     Thank you very much.

    Next we'll go to Mr. Epp for five minutes.

    Thank you, Mr. Chair.

    Thank you to the witnesses.

    I'll start with you, Professor Charlebois. You identified...and I know that there are sensitivities in the room around what we would call food “taxes”, so I'll just change my language for the purposes of the room and call them food “policies”. This is around the food policy of the industrial carbon tax, the front-of-the-pack labelling and the plastics registry. Two more on my list are the clean fuel standards that impact fuel costs and obviously the deficits that inflate everything.

    What other taxes are there specifically around food? You mentioned shrinkflation. You mentioned the under-reporting of food inflation, possibly because of shrinkflation. What other taxes are there that are directly or indirectly impacting food costs for Canadians?

    We could look at corporate taxation, but based on what we've evaluated with MNP in looking at G20 countries, Canada is actually already competitive. The challenge, of course, is that we are in a vast country, so we have to make our country immensely attractive to attract more investments. That's really the biggest problem we have, as far I'm concerned, when it comes to innovation—creating opportunity for Canadians and attracting more competition to reduce prices.

    Let me put some of your own words right back at you about the valley of death and the distance between proof of concept and commercialization. In your opening comments, you talked about how public sector investment is seemingly not getting the job done. Private sector R and D investment has dropped off 37% since 2023. Why?

    It's because we can't scale up businesses.

    Why?

    I was at Purdue University just a month ago teaching a class to entrepreneurs. In the room, you had several companies looking at investing. They know that they can actually launch and scale up their businesses very rapidly, which very much attracts VCs. In Canada we're very good at starting businesses. We're not very good at keeping them.

    I'll switch to you, Mr. Lemaire, on the plastics registry and the interplay or interchange between federal and provincial. It's a challenge in a whole bunch of situations.

    What hasn't been coming into the testimony here with respect to single-use plastics, as provinces look at that, is the idea of recycling. Is there a linkage there? Is one of the problems that it's provincially regulated in terms of the recycling aspect with plastics? How do we address that?

     Thank you, Mr. Epp.

    On the concept of recycling, we have a systems issue with plastics. This is the underlying challenge across the country. The systems issue is that we want to create a circular economy, but we don't have the infrastructure and the modelling in play to do so, to actually create enough resin and move forward.

    When the tariffs were put on China by the U.S. around some of their recycled content, all of a sudden there was a massive move to try to buy as much recycled content as possible for plastic manufacturers, because it was going to be extremely expensive to move forward. It's already a challenge with virgin resin.

    We need to look at a system in Canada that looks at how we create our own internalized model and drives business back to the investment. How do we get the capital and the private equity models in place and move forward?

    Atlantic Canada's Sustane is an operation that takes all sorts of plastics. They put that into their operation and create new material that can then be sold. They're actually selling it overseas. It's a $70-million start-up and they're having a challenge to get there. That's a good operational opportunity.

    Thank you.

    I want to get one other thought in. Many of the challenges, in this study particularly, we've dealt with for 10 years. It's a culture change that we're looking for, specifically in the two agencies we're focusing on: the CFIA and the PMRA. What is needed? I think of the four Rs: right place, right time, right amount and right regulations. Our regulations are good, but we're not fast enough in adopting them.

     We're not fast enough. What is needed? I'll start with you, Mr. Charlebois.

    I think it boils down to understanding execution and the value of execution. Industry is very good at innovating, but often is held back by regulations.

     Whenever we actually decide to empower industry with new technologies, we're not very good at communicating that to the public, and then you hear that from them, as parliamentarians. You're the ones who then will just step back and be more prudent about what you're trying to achieve, which makes things even more complicated.

    This is really the trick here. It's to actually understand in lockstep how we can have industry and regulators work together and communicate that to the public in real time.

    Thank you.

    I know Mr. Chair is going to cut me off, so—

     I gave some extra seconds for the answer.

    Thank you.

    I'll go to MP Harrison for five minutes.

    Thank you, Mr. Chair.

    Countries such as Australia, the Netherlands and Singapore have implemented agile regulatory frameworks to support agritech innovation. What lessons can Canada learn from international models of regulatory reform in the agri-food sector?

    This is for Mr. Buy.

     Thank you.

    Absolutely. You're entirely right. We don't need to recreate the wheel. There are a lot of countries that have done stellar jobs in looking at their regulatory systems. Australia is one. New Zealand is another one.

     Some European countries have done a great job, but at the same time, if you go to Europe and ask them about their regulatory systems, some of them will tell you that, as an example, it takes six permits to cut a tree on your property. That's for farms. They don't want to get to there.... For the food research industry, it's a similar thing. They see themselves as overburdened.

    We are in a different spot. I do believe that we can certainly look at other countries and look at other models. Australia is a great model on the regulatory side, especially with its own structure, which mirrors Canada's.

    I also think that we need to go to a risk-based approach on some of those regulations. You know, it's interesting. We had a conference a few months ago where an American presenter was talking. Someone made a comment about their regulatory system compared to ours. The individual said, “You know, in the U.S., we have less regulation, but we also have much more accountability from the judicial system, which makes innovators and businesses a little more wary about doing the wrong thing.” The presenter said, “In the end, we're fairly safe.”

     It's the same way in Canada. It's not a bad idea to look at other models and at the way things are done in other countries. I fully support that. The only thing I don't support is wasting a lot of time on more studies. Every year, we go back to the same questions, with the same parliamentary committee meetings asking the same questions and doing great reports with great recommendations about this.

    It's time to act. That comes with leadership. You are in leadership. Let's show leadership and direct the fantastic people who work in those agencies to do better faster.

     Thank you so much for your answer.

    Are there any specific international practices that you'd like to see enacted in Canada?

    That's a broad question. There are a number of them. We can probably provide a number of them to the committee at a later stage. I would be a little bit remiss to go through a number of them right now.

    Thank you.

    Mr. Lemaire, I'll ask you the same kind of question. Are there any examples in the international community that you would like to bring forward and discuss?

    Yes. I'm happy to provide a list of options. To the point that was just made by my colleague, we can see a lot of opportunities, especially out of Australia. We have to look at like parliamentary systems. Going back to the point on the judicial system in different jurisdictions, that is a check and balance.

    When we look at an example from here in Canada, we had a tool that was presented, a private member's bill, by the former chair of this committee. Bill C-359 provided the regulatory direction for efficiencies in registration and alignment. We don't have to go outside the country. We had the mechanism ready to go. It just has to be put in play.

    Thank you.

    I'll share my last minute with Ms. Chatel.

    Thank you.

    You mentioned some very important solutions, Mr. Buy. For example, you suggested setting up a Canada-wide council, somewhat like what is being done to facilitate harmonization between Canada and the United States. The committee would very much like you to send these solutions to us in writing. We're really looking for solutions that would work and that would change the structure a bit.

    Mr. Buy, you seemed to be saying earlier that even if we didn't set up new institutions or a new bureaucracy, it would still be important to establish a regulatory council. Some witnesses mentioned that the agile regulations table, which we have here, could be formalized.

    Do you have an opinion on that?

    We have to stop there. Sorry.

    If it could be sent to us in writing, that would be great.

    Thank you.

    Let's go to Mr. Perron for two and a half minutes.

    Thank you, Mr. Chair.

    The committee has heard from a number of witnesses who talked about looking at what is being done elsewhere. It's coming up again in the questions. We all agree on increasing efficiency. For example, if we're testing a new molecule, why not partner with a trusted neighbour? The partner would do one type of study, we would do another, then we could combine our data. That would speed things up. The problem here is the climate. Let's say that some tests are done in the southern United States and others in Saskatchewan. The climate isn't the same, the soil type isn't the same, so the reactions can differ. There will be other types of testing to do, but we could still make improvements.

    How do we go about establishing such partnerships without having to give up our independent decision-making power and without putting the health and safety of our people and producers at risk? That's also important.

    I'd like to hear from all three witnesses on this issue, starting with Mr. Charlebois.

    It kind of comes down to science, ultimately, because knowledge sharing is an integral part of science. I travel for my job. My colleagues travel a lot as well. We are already working with other partners around the world. We have been doing so for a while now.

    When products eventually come to market, we have to make sure that they are compatible with our environment, our market and so on, but it shouldn't take a year. For example, Health Canada could work with the U.S. Food and Drug Administration, or FDA. In fact, I think they already work with the FDA, but they could work even more closely together. That would be a welcome development. It must be said that there are a lot of products. Basically, there are a number of businesses that never see the light of day because all this takes too long.

    What do you think, Mr. Lemaire?

    My answer would be more or less the same as Mr. Charlebois's.

    What about you, Mr. Buy?

    I also think there are a lot of things that can be done quickly. Yes, you're right that there are regional and provincial differences in conditions, but we could still coordinate and work together to get things done faster.

    I also agree with my colleagues that we shouldn't redo everything. There are great examples internationally, so we in Canada can also move quickly to make some regulatory changes.

    In terms of what was asked previously, we put forward a number of recommendations in the document we sent you. I hope it was handed out to you, since it was sent in both official languages last week. I hope you received it.

     Thank you very much.

    We'll do two five-minute rounds, with one for the Conservatives and one for the Liberals.

    Monsieur Gourde, you have five minutes.

    Thank you, Mr. Chair.

    My question is for Mr. Charlebois.

    You don't know me, but I've been aware of you for a long time because we've been hearing about you through your research for ages.

    I have a lot of questions and concerns about the grocery basket assessment. You often talk about the effects of inflation on the grocery basket. However, habits are changing. When the research or study we are conducting on the effects of inflation on the grocery basket is spread out over a 10‑year period, for example, is it always the same grocery basket, meaning a basket that contains the same number of pounds of meat, vegetables, fruit, etc., or does the grocery basket evolve?

    It seems to me that Canadians' eating habits are changing based on the price of food. Families have a budget and they tend to stick to it. Sometimes they sacrifice food quality to buy cheaper food.

    When the government conducts studies on the effects of inflation on the grocery basket, does it take into account changes in eating habits over months or years? We could conclude that, in 2024, the increase in the price of groceries was 5% or 6%, but if we had taken the same foods into consideration over the past 10 years, perhaps the difference would have been 15% to 20%.

    I am concerned that this could distort people's perception of reality.

    What do you think, Mr. Charlebois?

    That's a very good question.

    Essentially, there is a battle between consumers and food inflation. For example, when we say that food inflation is currently at 4%, that doesn't mean that people are spending 4% more. Consumers are battling against that 4%. They will compromise on nutritional qualities, especially when it comes to proteins. The items at the meat counter are very expensive, so instead of going to the meat counter, the consumer will choose a can of tuna or a vegetable protein.

    We've been monitoring prices very closely for 16 years. We've adapted to consumer behaviour. Every year, we freeze consumer behaviour in September or October to establish a percentage for our forecast for the following year. I don't think Statistics Canada does that. They have roughly the same standards and the same ratios for meat, seafood, baked goods and so on. There aren't really any changes that reflect reality. Conversely, we try to take them into account and inform the public as much as possible.

    However, you agree that, given the price of food right now, dietary habits are changing. The grocery basket tends to contain a larger amount of cheaper food because of the financial reality of Canadian households.

    Yes. As Mr. Lemaire knows, the market is very frugal right now. As a result, a lot of people will buy store brand products. However, the nutritional value of store brand products is not the same as that of other brand products or fresh products found on the edges of the store, whose prices fluctuate greatly. When consumers become extremely frugal, fluctuations like that scare them.

    Over the past 10 years, the contents of the grocery basket have evolved. People say that Canadians eat more frugally, but unfortunately, they may simply be eating lower-quality food.

    Yes, that's correct.

    I wouldn't say that the content of the food basket has evolved, but it has changed. Consumer behaviour has definitely changed—prices have driven people to make different decisions.

    What is your forecast for the next five years in terms of Canadians' eating habits?

    It's not so easy to make forecasts, and it's even harder to do so over five years.

    Based on my discussions with various distributors, I believe we'll still have a very frugal market next year. Things will continue to be difficult, especially when it comes to access to protein. The price is going up for the whole meat trifecta—beef, chicken and pork—which is rarely seen. That really hurts consumers, because protein accounts for 40% of grocery bills.

    Thank you very much.

    Last, we'll go to Mr. Connors.

    You have five minutes.

    Thank you.

    Thank you.

    Mr. Buy, if you remember the question that MP Chatel asked you, could the collaborative work of the agile table that's already in existence work with your agricultural council?

     I think there are ways to make certain things work between the two. I think this is a good idea. It would need to be looked at a little bit more in detail.

    Okay.

    Mr. Lemaire, in your opening remarks, you talked about the challenges of moving produce from province to province. You mentioned how the federal government and the provinces need to work together and need to align, and you spoke about a competitive lens. Now I come from Newfoundland and Labrador. I'd like for you to be able to elaborate on that a bit and, looking at it through the competitive lens, tell us what that means.

    Actually, that's a wonderful question.

    I spent some time with Erin from Powell's Supermarket at meetings last week, and the challenges she experiences in just bringing fresh produce from the mainland into Newfoundland.... We have to look at a few key pieces here. I think seasonal trucking weights are something that we need to try to align. That's a good example of spring weights. That changes the size of the trucks that can move across certain provinces. That reduces efficiencies in the model.

    Going beyond that, when we start looking at our infrastructure—and Dr. Charlebois did talk a little bit about this—the infrastructure discussion is key: our infrastructure, how we invest in finding regulatory alignment across the country and how we enable investment. The investment in the Montreal port announced by the government is key. The other piece that we have to look at is alignment across all of our other modes of transportation to ensure the connectivity of our country is done in a way that is cost-effective and efficient. If we start building out on that model and start looking at a regulatory model that enables perishable food to be moved in the event of a dispute, like we've seen at the ports, I think we will find a win. When we can't move food, we see food insecurity rapidly increase.

    How do you foresee consulting with industry?

    This is a double-edged sword for industry. I've spoken to some of you about how we were overly consulted in the previous government, and that can be dangerous as well. It has to be an appropriate amount of engagement with the industry to get the necessary input, like we're doing today, but directly with the departments to provide direction on what works and doesn't work. What I noted in my statement is that, with direction from the Prime Minister's Office and the minister in a very tactical, direct way, we saw dramatic shifts on how the bureaucracy moves. In some cases, there are systems that don't change quickly without clear political direction. We've experienced that change in the last five months. We need to continue moving that forward, and it has to be concise, focused and enabling for the bureaucrats to understand they have to act.

    Coming from industry and coming from a small place where agriculture is not that large, sometimes I hear—and it's officially when I was doing some work with the Canadian Federation of Agriculture—that farmers on the ground do not really think that they're being consulted. You said that you were overconsulted for the last little while. Can you explain how the farmers who are actually doing the work are not being consulted?

    There are two things that have to happen. I work closely with Scott Ross and Keith Currie at the Canadian Federation of Agriculture. Through our national organizations, providing a voice to government is key, but you need to get out to the farms. With the strength you have as elected members of Parliament—and I say this more to every urban member of Parliament who is listening to this committee—leave the city, visit a farm and hug a farmer.

    Voices: Hear, hear!

    Thank you to our witnesses.

    We'll recess for five minutes and come back soon.

     I'd like to make a few comments before we start.

    For the benefit of the new witnesses, please wait until I recognize you.

    We do have a few folks on Zoom. At the bottom of your screen, you can select the appropriate channel for interpretation.

    Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, the committee is resuming its study on the government's regulatory reform initiative in agriculture and agri-food sector.

    As an individual, we have Evan Fraser. We also have the Canadian Federation of Independent Business and the Alberta Beekeepers Commission.

    Thank you so much for being here today.

    We'll start with Mr. Fraser for five minutes.

     Many thanks for this great opportunity.

    The problem I'd ask you all to consider predates my career.

    One minute, Mr. Fraser. I'm sorry.

    Mr. Perron, please go ahead.

    I'm sorry to interrupt the witness, but the interpreter has informed us that Mr. Fraser's sound was not approved by the interpretation service.

    Did Mr. Fraser provide a text that someone could read?

    Has Mr. Fraser been approved by the interpreter?

    I've been told that Mr. Fraser was approved.

    We're told that he did not, Mr. Chair. There's a technical issue.

    Let's suspend for a few minutes.

    Thank you.

     I call the meeting back to order. Here is the situation: There are two tests that take place for sound quality. Our two online witnesses passed the original test, but the second test was not a go.

    This is what we're going to do. Mr. Fraser has produced his opening statement. Interpretation has said that, if he presents, they can read the translation, so that's not a problem. Our witness Phillips will have to produce her opening statement in order for that to happen.

    We will proceed, and when it's time for Q and A, interpretation will let us know if the sound quality is acceptable.

    We'll start in-house with the Canadian Federation of Independent Business for five minutes, please.

    Hello. My name is Jasmin Guénette. I am the vice-president of national affairs at the Canadian Federation of Independent Business. I am joined by my colleague Juliette Nicolaÿ, policy analyst with our Ottawa team.

    We thank the committee for its kind invitation.

    I will make my remarks in English. My colleague will make her remarks in French. We will be able to answer questions in both languages.

    The Canadian Federation of Independent Business represents 100,000 small and medium-sized enterprises across Canada. We have members in all sectors of the economy, including nearly 6,000 in the agricultural sector. We survey our members regularly to understand their top priorities.

    Reducing the regulatory burden and paperwork consistently ranks as the top priority for our members in agriculture. It is followed by reducing the tax burden and protecting the supply chain.

    A significant portion of the regulatory burden on small businesses in the ag sector is imposed through the Canadian Food Inspection Agency, CFIA. We published a report last week revealing that nearly three out of five SMEs say that the regulatory burden associated with the CFIA has increased over the past five years.

    My colleague will share some of the key findings of that report and the recommendations we are making.

    Thank you, Mr. Guénette.

    SMEs have reported to us that the CFIA's rules and requirements change quite frequently. As a result, companies must constantly monitor, interpret and adapt to new directives. All of this hinders their productivity and growth.

    Administrative formalities are often difficult to understand and ill-suited to the reality of small businesses. SMEs therefore regularly rely on CFIA resources to try to understand and continue to comply with them. Unfortunately, the agency's customer service is unsatisfactory. The majority of SMEs rate it as fair or poor.

    Many SMEs report that it is difficult to find good information on the agency's website. That being the case, SMEs try calling the agency. However, it is equally difficult to reach officers by telephone and obtain adequate support.

    Our members also reported inconsistencies between different inspectors and various inspections, which complicates their efforts to remain compliant with guidelines.

    It is therefore essential that the government reduce the administrative burden and red tape imposed on SMEs by the CFIA. We recommend implementing the two-for-one rule, meaning that for every new rule introduced, two must be eliminated.

    The CFIA must also improve its customer service, be subject to more ambitious service standards and be transparent in disclosing its performance.

    With respect to the Pest Management Regulatory Agency, we also want to tell the committee that several SMEs expressed frustration with the timeliness of assessments.

    Thank you for giving us the opportunity to share our views with you today. We look forward to your questions.

    Thank you very much.

    Next we'll go to Mr. Fraser.

     Thank you very much.

    The problem I'd ask you to consider predates my career, and it certainly may be as old as Confederation. I think we need to challenge ourselves to create a policy regulatory environment that fosters more innovation in agri-food and, in particular, that captures more of the value of our agricultural products.

    When I was doing a Ph.D. on this topic in the early 2000s, farmers around me were literally pulling out their crops and their hair because they couldn't find processing markets. A huge amount of our fruits and vegetables that became ripe every summer were spoiled and were unable to be utilized. There was a logic then, in the 1990s and early 2000s, based on free trade, that the California producer could out-compete the Canadian producer for about 10 or 11 months of the year, so our processing sector moved to California.

    Today, though, that logic is changing again. The trade war and climate change are unsettling the paradigms of the last three decades, and I would say that innovations are giving our producers and our processors the tools they need to do things in a very different way.

    Consider that robotic milkers and smart tractors are giving crop producers and livestock producers the tools they need to produce far more food than anybody else in the world, frankly, with fewer inputs and emissions. New strawberry varieties bloom all year round, and those plus low-cost LED lights mean that we can have fresh strawberries any month of the year, anywhere in Canada. Anecdotally, two weeks ago in downtown Toronto, I ate some mozzarella cheese that emerged from a brewing facility, not from a cow's udder.

    I think we need to remind ourselves that innovation lies at the heart of the food system and that it is also intrinsic to our national security, as well. I think if we get the policies and regulations right, we can create a system that's more sustainable, more robust, that offers healthy and affordable nutrition and that captures more value of our raw products. To do this, I'd like you to consider four policy objectives.

    The first has to be the regulatory reforms, and in particular, regulatory reforms between the provinces and the federal government. In B.C., for instance, agricultural land cannot be used for food-processing facilities unless 50% of the product is sourced locally. This means we will never see a blueberry jam factory on a blueberry farm in British Columbia because, frankly, the sugar, the packaging and whatnot come from outside of Canada.

    The second policy area has to be training and innovation, and we need to build on Canada's exceptional network of universities and colleges to create a training platform that attracts the best and the brightest minds. For too long, our robot engineer technicians, or students studying robots, have been dreaming of working for NASA, not realizing that there are actually better and better-paying jobs in Leamington, for instance.

    Luckily, we have progress. I'm thrilled because, just this year, the team has received $16 million from ISED to launch a national training platform on agri-food innovation. We're really excited about that, and I'm happy to take questions about that.

    The third area is that we need to de-risk private investment in this space. Agri-food tech is not like normal technologies or normal investments. It's linked to a growing season and a biological cycle. Agri-food has a slower return on investment than other investments, so it is unattractive or less attractive to private equity and venture capital. We can do things, though. We can help de-risk investments, and there's a tremendous policy agenda around de-risking investment in this space, which I'd be happy to provide details on.

    Finally, I think there's a really important, urgent need to better align the work of our research councils with the needs of industry so that we align NSERC, SSHRC and the CIHR funding and make sure it responds directly to the needs of the emerging agri-food sector. We know that we are great at doing research as a nation, but we are not particularly good at commercializing that research. One reason, I believe, is that relative disconnect between research councils and industry needs.

    If we do these four things—create a more stable regulatory environment, attract the best minds, de-risk investment and align the research councils with industry—I think we have opportunities to position Canada as the world's pre-eminent powerhouse in the agri-food sector, globally.

    The Royal Bank agrees. In an article in the Western Producer, an RBC executive stated that investments in this area were Canada's “moon shot”. Justine Hendricks said that Farm Credit Canada calls this our “generational opportunity”. I believe that is the case. I'm in Calgary right now, working with ventures and start-ups in agriculture, and my mind has been blown, for the last eight hours, with the amazing ideas that are out there.

    Thank you so much for the opportunity to speak with you today, and I'm very excited to answer questions.

    Thank you very much.

    Ms. Phillips, we're going to try, but if the interpreters have issues, then we have to stop, and we'll figure out where to go from there.

    Please proceed.

    Thank you very much for the opportunity to present at this hearing.

    My understanding and familiarity with regulations and enforcements come from over 30-plus years in agriculture and agri-food—working for governments supporting private sector research, innovation and competitiveness, and more recently working for the private sector in Alberta's commercial beekeeping, pollination and honey industries.

    With this experience, I'm fully cognizant of the need for and value of food safety and related regulations throughout the supply chain. In particular, after eight years of working in the private sector, my perspective and understanding of how regulations are imposed, and their impact on industry, has become very clear. My observation is this: In the agri-food industry, while the regulations are critical to the credibility of Canada's agriculture and food production industries, currently there are imbalances and inconsistencies in policy development and regulatory enforcement, particularly when managing risk, which is resulting in unreasonable barriers and impediments to progress, innovation and competitiveness for producers.

    From the perspective of the private sector, government ministries set policies and regulations and then create agencies to implement and enforce the regulations. In this way, the ministries have divested themselves of the responsibility of operations, and at the same time have neglected the role of oversight of these agencies. This oversight is critical for ensuring a balance of potential competing interests.

    Further, it appears that, especially in more recent years, the primary purpose of the regulatory agencies is to protect both themselves and the government. This results in a lack of consideration for the industry's viability, sustainability and competitiveness. Both the CFIA and the PMRA have stated recently that they do not have a duty of care to consider the economic interests or impacts of their decisions on industry or stakeholders. In other words, in making decisions, both agencies have stated that neither has a legal obligation to consider the socio-economic impact of their decisions. This is having a significant detrimental impact on industries.

    My next comments are derived from my more recent experience in the beekeeping industry. I have three examples of where the regulatory and government systems are failing the industry.

    First, Canadian honey competitiveness and value are being reduced by poorly controlled imports of fraudulent and adulterated honey. Canada has a reputation as a transshipper now. As a result, we are losing export markets. We require immediate implementation by the CFIA of more robust, mandatory, importer-funded, honey-adulteration testing with enforceable penalties.

     The PMRA's slow, risk-averse and cumbersome approval process is prohibiting the use of critical hive treatments to keep honeybees alive. Those hive treatments have been proven effective and safe in other reliable jurisdictions. Our request is for the PMRA's immediate review and approval of varroa mite treatments using the Environmental Protection Agency's data.

    Third, 20 years ago, Canadian beekeepers lost 15% of their bees annually. Now they lose, on average, 30% of their bees every year. Imagine if the dairy and beef herds were losing 30% of their animals every year. The need for stock replacement is critical for the survival of the industry and those crops that depend on honeybees for pollination. Those countries currently exporting stock to Canada have become increasingly risky to the viability of the industry, which has been reporting packaged bees and queens that are disease- and pest-infested. A new risk, the Tropilaelaps mite, is now in close proximity to Italy and Australia, and has the potential to devastate the Canadian beekeeping industry. We request an immediate review of those countries that import bees to Canada from outside North America. Until those new risk assessments are completed and include industry input, all imported stock from outside North America should cease.

    Overall, on an ongoing and structural level, beekeepers are asking for improved and more consistent application of the regulations that encourage growth, innovation and long-term industry viability, and a genuine science-based partnership.

     We recommend establishing mandated working groups between the commercial industry and regulators.

    Thank you very much for your attention.

    Thank you very much.

    We'll go to the Conservatives and Mr. Gourde for six minutes.

    Thank you, Mr. Chair.

    Mr. Guénette, the Canadian Federation of Independent Business just released a rather devastating report on the services provided by the Canadian Food Inspection Agency. The report seems to suggest that everything has deteriorated over the past five years. For example, the Agency's services are less accessible and there is more paperwork to complete. Your members are very disappointed.

    However, we met with agency representatives and, according to them, everything seems to be going well. They said they were working closely with agri-food businesses and want to help them.

    So those two statements are quite contradictory. We're very pleased to see the other side of the coin today.

    Can you tell us a bit more about that?

     Yes, of course. I can begin with a preliminary answer, and my colleague can add to it.

    We did not speak with Canadian Food Inspection Agency workers. We directly surveyed our members, who are entrepreneurs. We asked them a long list of questions on the quality of the agency’s services to determine, for example, which services they received from the agency and how those interactions went. The survey results were published in a report last week. Generally speaking, the answers indicated that the services it provides to small and medium businesses need a great deal of improvement.

    There are two key points.

    First, the majority of small and medium businesses, meaning 58% of them, found that the Canadian Food Inspection Agency's red tape increased over the last five years.

    Then, when small and medium businesses want clarification on how to comply with regulations, they try to use the agency’s website, but don’t find the answers there. When they have to communicate with the agency, they spend an hour on the phone. All that impacts those businesses, because SMEs don’t have a lot of employees. They are the ones who have to take the time, when it could be better invested in improving and growing the business.

    Speaking of employees, I’m sure the Canadian Food Inspection Agency added to its employees, but reduced its services. In contrast, businesses often have to cut down on staff to survive.

    How do your members perceive this contradiction, based on your survey results? Are they feeling frustration about that?

    Based on our findings, only a quarter of our members thought that service from the CFIA was good. However, if an SME were in a situation where only a quarter of its clients thought its services were good, it would be very bad for that business. Indeed, our members expressed frustration about CFIA wait times, officers’ attitudes and the time it took to get an answer once they could get an officer on the phone.

    It all suggests that a great deal of progress must be made to improve customer service at the Canadian Food Inspection Agency. One way to achieve this would be setting stricter standards, adhering to them, and being able to clearly show if they’ve been met.

    You have 6,000 members in the agri-food sector. They contribute significantly to Canada’s gross domestic product.

    Could all the time lost because of the agency’s many standards negatively impact our gross domestic product?

    Obviously, the regulatory burden negatively impacts Canadian businesses, not only in agriculture, but in all sectors. When we ask our members about the main factors putting pressure on their costs and operations, regulation is often number one or listed in the top three.

    We often hear that Canada’s agri-food industry has significant potential and the value of our agri-food production could exceed $100 billion a year.

    In your opinion, are there currently any barriers preventing the fulfillment of this potential, be it on the level of investment or the level of service provided by the government?

    The budget will be tabled tomorrow. We hope the government will announce tax measures to help businesses invest more in their operations, machinery or equipment. We hope these measures will help businesses develop and grow to serve not only the Canadian market, but the international market as well.

    When it comes to rail and port infrastructure, the government seems to treat farmers like second-class citizens. However, that infrastructure is key for exporting products and making sure they’re delivered on time.

    Do you think the national priority should be to invest in this infrastructure to help the agricultural sector? Or should it be to invest in passenger transportation infrastructure, as per the $250 billion or $300 billion projects currently on the table?

    Unfortunately, in recent years, several strikes and labour disputes paralyzed ports in British Columbia, the Port of Montreal, the St. Lawrence Seaway, CN and CPKC. Many work stoppages made things complicated for businesses, endangered their survival and had a very negative impact on their sales and operations.

    When we consult our members, as I was saying in my remarks, they tell us that maintaining a healthy supply chain is one of their priorities. So, obviously, it is important for them that it not be compromised by the unexpected—

    We're going to stop there. I gave you an extra 40 seconds because of the interruption. I'm sorry, I had to cut you off.

    I understand.

    Thank you.

    Next, we have MP Chatel for six minutes.

    Thank you very much, Mr. Chair.

    Thank you to all the witnesses for being here today.

    Mr. Fraser, I recently had the opportunity to meet with your colleagues to talk about your platform aimed at stimulating innovation on farms. The government is very supportive of you in that regard. We know that farmers have always been among those who innovate the most, so it's good to hear about that kind of partnership.

    You also mentioned earlier that the agriculture and agri-food sector was one of our most important economic drivers. That opinion is shared not only by the International Monetary Fund, but also by the World Bank and the OECD. However, you rightly pointed out that your biggest issue is the regulatory burden, since it slows down productivity and innovation.

    I'd like to hear your thoughts on governance, since you gained experience in that at the University of Guelph. Witnesses have told us that structural changes are needed to solve the problem of growing regulations that are slowing down innovation. There was talk about changing agencies' mandates.

    However, to go even further, would it be possible to look for existing innovations? For example, the agile regulations table identified 150 problems for the sector. How can the government take action and solve those problems in a sustainable and structural way? Is there some governance that can be set up in that regard?

    That is a wonderful question. Thank you very much.

    The key thing to keep in mind is that agriculture is changing very quickly. I agree with your earlier statement that, yes, farmers are very innovative, and the pace of technological change is beyond that that, say, an individual farmer, can keep up with. I look to advances in robotics or genomic technologies, which are proceeding so quickly that it is very difficult for an owner-operator—even the most innovative owner-operator—to stay up to date. There is an enormous need to help position agriculture in order to embrace all forms of innovation.

    I sometimes say that the farmers of the future are just as likely to wear a lab coat as they are to drive a tractor. I believe that—

    Mr. Fraser, can we pause for a second? I think we have an issue.

    Mr. Perron, please go ahead.

    The interpreter is telling us that the sound quality is poor.

    Mr. Fraser, I'm going to have to ask you to stop. Perhaps you can submit the answer to the committee, if possible. If you have anything else you'd like to submit, please do so.

    Unfortunately, there's some feedback that is causing a challenge with interpretation.

    Mr. Barlow, please go ahead.

     Just so we're clear—and Ms. Phillips might have the same issue—we can still ask the questions. However, they'll have to provide their responses in writing.

    Absolutely.

    Okay, let's go back.

    Thank you, Mr. Chair.

    Indeed, Mr. Fraser, you can submit to us in writing the possible ways to avoid an accumulation of regulations, which hinders productivity and innovation.

    Earlier, you also mentioned a way to eliminate the risk associated with investments in this industry. You said you'd be willing to give us the details. I'd very much like to have those details, so I encourage you to attach them to your answer. The same goes for innovation, as well as for the fourth point you raised, the research councils. Those are all good solutions, and it would be great to have them in writing. We can put them in our report.

    Mr. Guénette and Ms. Nicolaÿ, thank you very much for being here.

    What structural measure could we implement in our governance system to avoid the accumulation of regulations and take action to resolve the 150 problems identified by the agile regulations table? What's currently missing from our governance system?

    One of the first ways to do that would be to follow the two-for-one rule, meaning that for every new regulation introduced, two others should be removed. That alone would make it possible to remove a good number of regulations that have become superfluous and have no particular purpose—

    Allow me to interrupt on that.

    I understand that, but who will decide which two regulations will be removed? How will that be determined? What I like about the agile regulations table is that it involves sitting at the table with producers.

    To remove regulations, people in the industry and our agri-business members have to sit down together to discuss what's unnecessary and redundant.

    Last year, we published a report on the regulations in Canada. We estimated that they cost around $51 billion. However, it would be possible to eliminate regulations and save $18 billion without affecting the health and safety of workers and consumers.

    To reduce red tape, it's possible to talk to the people who are directly affected by it to see what can be removed. There's currently the one-for-one rule, but we don't know if it's being followed perfectly. If the goal is really to reduce red tape, it's important to adopt the two-for-one rule.

    For our members, it's equally important to improve customer service. Rather than thinking about new structures, then, if our members—

    I'm sorry, sir. I've given you an extra 15 seconds. It's the way the questions are being laid out.

    Mr. Perron, you have six minutes.

    Thank you very much, Mr. Chair.

    Thank you to the witnesses for being here.

    Mr. Guénette, I'll let you finish your previous answer.

    To improve services, we'd like to see a number of things.

    First, there should be an easy-to-access, user-friendly website that uses familiar language and where information is easy to find for our agri-business members.

    Second, when people call the Canadian Food Inspection Agency, someone has to respond to them and give them accurate information. As my colleague mentioned, sometimes contradictory information is given from one inspection to the next, so that would already be a major improvement.

    Mr. Guénette and Ms. Nicolaÿ, how do you explain that things are different from one inspector to the next? Is it because the directives or standards are unclear? Is it because the scope of their autonomy isn't defined well enough? Are there inspectors who take cases personally? We also hear a lot of examples like that.

    What we're hearing is that the regulations are unclear for SMEs, so maybe they're unclear for some inspectors too. We've heard of a number of cases where farmers were told completely contradictory things from one inspection to the next. They had to adapt based on what they were told during a first inspection, and then they were told something that went in the opposite direction during a second inspection. All of that not only leads to costs, but also wastes time and causes stress. Ultimately, it has an impact on our economy and even on entrepreneurship in general.

    Let me add that we've heard the same kind of comments about the Canada Revenue Agency.

    I'd held back from saying that. It's good that you said it. It completes the picture.

    You're saying that the regulations are unclear and that the directives given are inconsistent from one inspection to the next. Do you have any concrete examples of that? If you don't have any right now, could you provide us with a few concrete examples later, without naming the businesses, of course? We don't want to compromise anyone. However, those examples would enable us to clearly see the differences in the directives given.

    Yes, we'll provide you with documentation after the meeting. We have a list of what we call irritants. We note a number of regulations that could be removed. Our report on the Canadian Food Inspection Agency also includes a number of comments from entrepreneurs about their experience. We'll certainly be able to send you that information.

    Thank you very much, Ms. Nicolaÿ and Mr. Guénette.

    I'm really sorry that the witnesses who are joining us by video conference are having sound issues. However, they'll understand that we have to protect the hearing health of our interpreters. I'm still going to ask them a few questions, and they can provide us with their answers in writing.

    Ms. Phillips, from what you said, I understood that there was a major problem with the reciprocity of standards. We hear about that problem all the time. It seems that nothing is ever implemented to address that problem or control the situation.

    We heard from fruit and vegetable growers who talked about carrots from China, where there are probably products in use that are banned here. You're now saying that imported honey has been modified. If I've understood you correctly, we have to take action on the reciprocity of standards. I'm going to admit that when we start asking questions about this, we realize that the situation isn't simple. Three different agencies are managing this file, and every time we question someone, we're directed to another agency. One thing we could do to help our local producers, then, would perhaps be to have a single agency in charge of reciprocity of standards.

    You seem to like what I'm saying, Ms. Phillips.

    Mr. Guénette, I don't know if you want to add any details on the reciprocity of standards. Have you had discussions about it?

    Generally speaking, we're talking about the principle of mutual recognition: What's good for being produced, consumed and sold in one province should also be available in all the other provinces, without any other regulatory requirements. That applies to all kinds of products, including food products.

    When you hear about products from abroad, I imagine you're told that this is currently a problem for some of the businesses you represent. You have agricultural producers among the members of your organization. For example, our carrot warehouses in Quebec are full, and the prices are at their lowest, while our major grocery stores sell carrots from China.

    I think if you asked our agri-business members about this issue specifically, they'd tell you that they really want to see more of their products on the shelves so that they can sell them. There's no doubt about that.

    Mr. Chair, I didn't start my clock, so you can let me know when my time is up.

     You have 45 seconds left.

    Okay.

    In that case, I'll quickly ask my question for Mr. Fraser.

    You were saying that we're good at research, but we're bad at commercialization. Mr. Charlebois told us something similar, and I'm sure the representatives of the Canadian Federation of Independent Business could add to that.

    Could you send us a written recommendation that indicates what we need to change to get better at commercialization? What do we need to do so that our businesses and innovators don't just sell their inventions or innovations, but develop them here, to enrich our economy?

    Thank you very much.

    We'll do one final round.

    We'll go four minutes, four minutes and two minutes, and then we're done.

    Mr. Barlow, you have the floor.

     Thanks, Mr. Chair.

    I have a question for Ms. Phillips along the line of Mr. Perron's. Can you submit your response, Ms. Phillips?

    You were talking about fraudulent honey being imported to Canada and the PMRA's and the CFIA's decision on bromide but also the decision to extend the ban on importing bee population replacements. The CFIA, the PMRA and the Liberal government have said they are going to make sure there is a food security and economic lens on the decisions that these two agencies are making.

    Can you tell the committee whether or not you feel that a food security or an economic lens was placed on the decisions to extend the ban and the delays on approving hive protection products?

    Now, to the CFIB, I like the fact that you talked about the red tape and the frustration amongst your members. I have a number of businesses in my riding—I know all of us do—whose number one irritant is the CFIA and the burden it's putting on their businesses.

    One example is The Dutch Store, which I like to shop at. They have had to hire a full-time person just to deal with the CFIA paperwork, and, in fact, they are thinking of closing their business. They have $2 million in revenue; it's not huge, but it's a good business. The CFIA is banning them from importing a lot of products because they're in the wrong-sized jar. We're talking pickles and sauerkraut from renowned international businesses. To me, the wrong size of jar has nothing to do with food security.

    Are you getting feedback from members who are no longer in business as a result of not being able to manage the paperwork that's coming from the CFIA? Do you keep those kinds of records?

    Secondary to that, do you know the impact on GDP or Canadian economics in terms of losing some of these small businesses?

    I'll respond to the first question.

    We have not heard about businesses closing down because of CFIA regulations, but we have heard of businesses having to stop commercializing some products because of CFIA regulations. Notably, when the Safe Food for Canadians Regulations were implemented, many small businesses didn't have the capacity to comply with some of the regulations and couldn't import some products.

    I can share with you specific examples later on.

    If you could table that with the committee, that would be helpful.

    Previously, the Conservative government had a redress officer at the CFIA so that when these things did happen, the business owner could go to that redress officer and file a challenge to a decision by the CFIA. The Liberal government removed that position in 2022 or 2023.

    I know my colleagues like to talk about the agile regulations table, but that's been in place for five years and no changes have been happening. I don't understand the appreciation of that when 40% of the complaints that went to the redress officer were found to have reason to be followed up on.

    Do you feel that reinstating the redress officer would bring accountability back to the CFIA? Business owners would have a clear door to go through to file these complaints or challenge these decisions from the CFIA to ensure that they have a fair hearing and can stay in business and make products available to Canadians.

    You have 30 seconds.

    Businesses should have the opportunity to ask for more information from the agency about decisions they are making. Whether or not the office that you described existed, it's very important that businesses can challenge the decisions.

    This is one aspect we are recommending to ensure that businesses can better understand decisions and challenge them if needed.

    Thank you very much.

    You have the floor for four minutes, MP Connors.

     Thank you.

    Mr. Fraser, I know you can't respond, but you identified four categories: regulatory reform, additional training, de-risking private investment and aligning research with industry needs. I'd like to have a bit more information. I hope that you do present, and some other people have asked you for a written response. How could the CFIA or the PMRA de-risk investment improvements that we could do there? Is there something in that that could de-risk private investment? I'd be interested to hear that from you.

    To the CFIB, you're doing great work, and you've always done great work in collecting a lot of great data from your members. I've been a member through prior businesses, and your surveys always do great work, and it's very broad across the country.

    I'm wondering, seeing that you're doing agricultural data collection, if there is a gap between the data that you collect and getting to a level, besides meetings such as this, where the information can be used to make changes or make improvements. Do you think there's a gap with this in that process?

    I'm not sure I fully understand the—

    You collect the data, and then you have the data with your organization, but in order to make changes that the CFIA and the PMRA...that data has to get out to other people. You produce reports and everything like that.

    Do you think your data is getting to the right people?

    We hope so. We communicate our work to members of Parliament and civil servants. We are always available to meet those impacted by our work.

    As a matter of fact, we have met the CFIA in the past, and we have a meeting with them soon to share the content of our report. We are always happy and available to share the data and to work on introducing policy changes that will benefit small businesses in Canada.

    Okay, that's great.

    We've heard agile tables mentioned. Some people have recommended some different things about an ag council or something. Do you see that as something that we should be looking at?

    There's already a lot of structure that businesses have to deal with. There are many regulatory bodies already overseeing SMEs in Canada. I'm not sure that an additional body is needed.

    What we recommend in the report and the work that Juliette did is to improve the work that the CFIA is doing and reduce the regulatory burden on SMEs that the CFIA is imposing on all members.

    If you haven't already submitted the report, I hope you submit the report as well.

    Absolutely, yes.

    Thank you.

    The final two minutes go to Mr. Perron.

    Thank you very much, Mr. Chair.

    Mr. Guénette, we'll continue along the same lines.

    In your opening remarks, you and your colleague said that there should be a two-for-one rule: Every time a regulation is added, two others should be removed. Do you think that's possible? That would mean there would be a lot fewer regulations, so that might be interesting, but I'd like you to explain that to me more. Logically, from what I understand of your proposal, you'd like us to check which existing regulations are repetitive and could be removed when adding a regulation.

    Have I understand your proposal correctly?

    I can start answering your question, and Ms. Nicolaÿ can add to what I have to say.

    First, I have to say that the regulations in Canada are very opaque. If we were to ask anyone to tell us how many regulations there are in Canada, no one would be able to answer. The first thing, then, would be to have more transparency.

    Second, we think that reducing regulations would be very beneficial for the Canadian economy and SMEs. We can look to British Columbia, for example, which has a similar rule in place. That means the regulations have to be reduced, and for that to happen, two regulations should be removed every time a new regulation is introduced.

    The first step would be to find out how many regulations we have in Canada. Once we have more information, it will be easy to determine which regulations could be removed.

    One way to get greater transparency on the number of existing regulations would be, for example, to expand the scope of the administrative burden baseline to include policies and legislation. At the moment, it includes only the regulations and associated forms. We'd like it to go further and for the baseline to also include policies and legislation.

     Thank you to our witnesses today. Thank you for your patience, Ms. Phillips and Mr. Fraser. We appreciate you joining us and your commitment to agriculture.

    Go ahead, Mr. Barlow

    I have just one quick thing before we adjourn. As all of us have said, we're trying to get some good recommendations out of this study. Ms. Chatel and I have talked about an ombudsman or a redress officer—whatever the title would be. We have asked for a previous redress officer, Merril Bawden, to appear before committee. The CFIA has refused to allow her to appear. She no longer has that role, but she's still in the CFIA.

     If we want to get the facts and see what would work, what doesn't, what did work and what didn't, I think it would behoove the CFIA to allow her to appear.

     I think we have a couple of options here. I could just ask my Liberal colleagues if they would approach the minister and see if she would kind of give them a push or a green light to allow her to appear. Or we could send a letter from this committee asking the CFIA to allow Ms. Bawden to appear and just give her experience on what it was to be a redress officer, what worked in that role and what didn't.

     We're not trying to find any dirt here. We just want to know if the ombudsman role and a redress officer is something we should consider. I think it does not help this study for the CFIA to not allow her to appear. Those are two options, but I'm open to other ideas.

    I was trying to find the contact information of another redress officer, as well. I forgot her name. Maybe you could help me find that name and contact information.

     I would agree with my colleague, as we talk about an ombudsman. It's managing complaints that our producers have within the lack of transparency that we've heard about in this committee. To enhance that, what would be an organization or a key person, whether that's an ombudsperson or a redress...?

    I join my colleague. I think it's important that we hear. I'll work with my colleague and the department to see if we can find a person to speak on that issue.

    Mr. Barlow, please go ahead.

    We have two other names. We'll provide those to you.

    We have the same problem. We were trying to track down contact information and whether or not they still work for the CFIA or outside government.

    To your point, if we are talking about transparency and the difficulty with transparency, this decision by the CFIA is not helping that argument by not allowing her to appear or if we can't find another one.... We will work together to try to find someone who will.

    I'm sorry. I was not aware of that. We'll be working together to find a person to speak about that.

    Okay. You'll take it away and figure it out.

    Is it the will of the committee to adjourn?

    Some hon. members: Agreed.

    The Chair: Thank you so much. The meeting is adjourned.