Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 13 - Evidence
OTTAWA, Tuesday, May 3, 2005
The Standing Senate Committee on Agriculture and Forestry met this day at 6:05 p.m. to study the present state and future of agriculture and forestry in Canada.
Senator Joyce Fairbairn (Chairman) in the chair.
[English]
The Chairman: Honourable senators, I will call this meeting to order. This is the Standing Senate Committee on Agriculture and Forestry. For the last many months, one of the biggest issues before this committee has had to do with our cattle industry, our meat packing industry and everything that applies to it.
We have with us some very important witnesses from the Canadian Food Inspection Agency that has been obviously a major figure every since our border was closed with that first case of BSE. They have been in the business of testing our science that has been praised by all the world organizations as being absolutely first class. However, they also have another role. These are the kinds of regulations and decisions that are involved in the expansion of our processing industry in Canada.
We have with us the Executive Vice-president of the Canadian Food Inspection Agency, André Gravel, the Vice- president of Operations, Krista Mountjoy, and the Acting Director of Food of Animal Origin with the CFIA, Bill Anderson.
We will begin, Mr. Gravel, with you. I understand that you have a few thoughts you would like to share with us, and then we will get into questioning from our senators. Begin at any time you are ready.
Mr. André Gravel, Executive Vice-President, Canadian Food Inspection Agency: Thank you very much, madam chair, and honourable senators. It is a pleasure to be here tonight to give you an update on slaughter capacity and meat inspection in Canada.
I will give you an update on our recent slaughter plant registration activities. Since September 10, 2004, Canada's repositioning strategy announcement that mentioned slaughter capacity, the CFIA has received seven formal requests for registration. Two establishments have since been registered: one in PEI and one in BC. Five others have submitted blueprints or presented applications for registration to the CFIA. We anticipate that the remaining five establishments will be operational in approximately six to 12 months. Once operational, these facilities would increase slaughter capacity by approximately 7,000 head of cattle per week. Nationally, this would represent an 8 per cent increase in slaughter capacity.
[Translation]
On April 11, two existing federally registered establishments passed final inspection by the CFIA to expand their slaughter capability to beef. One had previously slaughtered calves and the other sheep and goats. Renovations to the slaughter lines now allow beef slaughter in both establishments. This means a total of seven existing establishments have increased their slaughter capacity since September 2004. The other five have also made some improvements, including a second operating shift, and two establishments have added one more slaughter day and have increased line speed. An additional three federally registered establishments have formally requested expansion. Blueprint review and/or expansion is currently underway. Several other groups have informally expressed interest in building or opening new federal slaughter establishments. The Agency is working to identify and contact these groups to facilitate the registration and blueprint application processes.
When the Agency last spoke to you on this topic, we stressed that we would not decrease our standards for the sake of increased slaughter capacity. That being said, we are committed to streamlining our processes, where we can, to enable plants to become registered and operational more quickly. And we have enhanced the process for registering new establishments.
Blueprint approval has been decentralized and is now done in the area where the establishment is located. We have also established a dedicated team of experts to expedite the review of new establishments for registration and licensing approvals. And local CFIA staff are facilitating the necessary linkages with other levels of government to address and resolve outstanding issues.
[English]
Once again, I must stress that we will not make changes that will compromise food safety. The high standards we have are just too important, both from a public health viewpoint and from an international trade standpoint. Regulatory authorities in foreign countries expect certain rules to be in place, and the Canadian system is subject to regular foreign country audits to ensure that the rules are being followed and the standards met.
I would like to note that in the past year, our meat inspection system has been audited by the U.S. and found to be equivalent. We have also hosted a number of visiting delegations with regard to the meat inspection system, including Hong Kong, Taiwan, Indonesia and Cuba.
I would now like to provide an overview of the current slaughter situation in Canada and the process to register a slaughter plant. Approximately 3.9 million cattle were slaughtered in 2004, 95 per cent of which were slaughtered at federally registered establishments and 5 per cent at provincial establishments. This was distributed amongst 29 federal and approximately 350 provincial establishments. However, it is important to note that six federally registered establishments represent more than 90 per cent of all federal slaughter capacity. Many of the provincial establishments are small with low-line speed, and may not slaughter every day of the week due to market factor and/or seasonal operation.
Only meat produced in federally-registered meat slaughter and processing establishments is eligible for interprovincial and international distribution. Federally- registered establishments must meet the criteria prescribed in the meat inspection regulations. These regulations set out requirements for design, construction and registration of an establishment as well as the requirements for the licensing of an operator of a registered establishment.
In order to register a slaughter plant under the meat inspection regulations, an application must be submitted to the CFIA, along with the detailed plans, blueprints and specifications of the establishment. The submission is reviewed by the agency and is conditionally approved if it meets the requirements prescribed in the regulations. Once the facility is built, the agency inspects it to ensure that it was built according to the approved submission. If the inspection is satisfactory, the building is registered and a registration number is issued. If the processed operator complies with the legislated requirements, the licence to operate a registered establishment is issued. Operations may then commence.
[Translation]
The registered owner and the licensed operator of the establishment are responsible for compliance with other pertinent standards and municipal, provincial or federal legislation. Meat from a federally inspected plant can be shipped inter-provincially and may be exported to other countries. Some people believe that allowing more inter- provincial movement of meat might help resolve our issues around slaughter capacity. A few provincial establishments could, with modifications, become federally registered to facilitate inter-provincial movement; however, these establishments generally serve local markets only. And, due to the usually low slaughter volume in provincial establishments, allowing inter-provincial movement of meat product would not significantly contribute to increasing Canadian capacity.
In 2004, the maximum capacity in federally registered establishments was 81,290 head of cattle per week. This was based on the approved line speed, hours per shift and number of shifts per week. The slaughter volume in federally registered establishments currently averages 72,000 head of cattle per week, representing a utilization rate of 88 per cent.
As the line will periodically be slowed down for many reasons, including mechanical breakdown, scheduled shutdowns or other operational concerns, maximum capacity — or 100 per cent utilization — will rarely be reached. Maximum slaughter capacity in federal establishments is currently estimated at 85,000 head of cattle per week. Slaughter volumes currently average 75,000 head of cattle per week. So far, 2005 has shown a low of 58,000 and a high of 80,000 head of cattle per week.
[English]
Utilization will fluctuate throughout the year due to seasonal variations in slaughter trends, combined with a fixed estimation of maximum capacity. Taking proposed expansions and new establishments into consideration, it is estimated that the federal maximum slaughter capacity will increase to approximately 90,000 head per week by the end of 2005.
However, we have to keep in mind that slaughter capacity is just one part of the whole system. In order to increase slaughter capacity, we would need to increase transportation to get the animals to the slaughter facility. We would also need to increase holding and processing capacity. Slaughter capacity alone is an important element, but it is only one piece of a complicated puzzle.
I would like to conclude by saying that we have received some additional resources for this area. These additional resources will allow us to continue to support our commitment to help the industry throughout the slaughter plant registration approval process. There are specific ways in which we are helping producer groups with the approval process. For example, we are assisting producer groups in understanding the requirements for approval at the planning stage. We are working with builders, engineers and consultants to help these producers avoid costly mistakes and/or delays in construction schedules and we are consulting with other levels of government on possible issues.
In the end, the decision to expand slaughter capacity has to come from the industry, for it is the industry that needs to submit plans, build or expand facilities and meet the criteria for approval.
We will be pleased to answer your questions.
The Chairman: Thank you, Mr. Gravel.
[Translation]
Senator Gill: I don't know much about cattle and the slaughter industry. What is the difference between a slaughterhouse controlled by the provincial government and one controlled by the federal government? Why are there two systems?
Mr. Gravel: At the beginning, the federal inspection system was set up to satisfy Canada's international export markets. Therefore, around 1907, a meat inspection system was designed to allow Canadian slaughterhouses to export their products to England and the United States. Construction and operating standards are different and are based on both food safety and on foreign countries' approval of those standards.
Senator Gill: And the distinction between the federal and provincial systems is that the federal system must meet foreign standards while the provincial system does not? What standards must be met at the provincial level?
Mr. Gravel: Meat produced in federally approved establishments can also be shipped inter-provincially. According to the Canadian Constitution, the federal government regulates inter-provincial and international trade and the province regulates local trade. Provincial standards are of course based on food safety but can vary from one jurisdiction to another.
Senator Gill: Must provincial standards comply with a national standard that is applied throughout Canada?
Mr. Gravel: Much work has been done since the 1970s to develop a national standard that would allow the harmonization of provincial standards. That standard is now in place. A federal/provincial cooperation project has established a "meat code'' that provinces could adopt as a basic standard. But, practically speaking, no federal standard can impose anything on provinces.
Senator Gill: Madam Chairperson, one question that has not been broached concerns caribou and other wild meat. Caribou is now marketed in some areas. Does your Agency also monitor the quality of caribou meat?
Mr. Gravel: If the caribou are slaughtered in registered establishments, yes.
Senator Gill: And if not?
Mr. Gravel: If not, no there is no quality control.Ms. Mountjoy, do we have any such establishments? I believe we had one establishment in Quebec that inspected caribou meat.
Ms. Krista Mountjoy, Vice-President, Operations, Canadian Food Inspection Agency: I believe there is.
Senator Gill: So, the quality of caribou meat is monitored in such slaughterhouses?
Mr. Gravel: Exactly, by the federal government.
Senator Gill: Do you know whether the provinces monitor the quality of caribou meat?
Mr. Gravel: I do not really know, but there is a large export market for venison. So, in many cases, if the meat is not inspected by our Agency, it would not be eligible for export and the market would therefore be quite limited.
[English]
Senator Tkachuk: Thank you for your presentation. I wish to thank you on behalf of at least my province, where we have a significant beef industry. You have done your job well on the question of BSE testing. It is important that the public is so very confident of the meat inspection process and the health process. We had two other cases of BSE but they just kept chewing through that beef as if nothing had happened. I thought with respect to the first one, maybe you could buy that, but then there was the other possibility and it continued on. I know it must be a difficult process.
I have a couple of questions. Since your agency was last here, we have had some testimony in regard to 100 per cent testing. I would like your views on that. How cumbersome is that process? Is it a doable procedure? You are the professionals; please advise us on exactly what that would entail.
Mr. Gravel: Scientifically speaking, 100 per cent testing is not the recommended method to ensure food safety. The main measure that the agency has put in place to ensure food safety is the removal of specified risk material, which is the brain, the spinal cord and any other tissue that could represent a degree of conductivity. In many countries, 100 per cent testing is seen as a food safety measure; it is not. Young animals will probably not react to the test. Therefore, that testing may be generating a false sense of security. In terms of the international scientific community, the World Organization for Animal Health, the international authority for animal health issues, does not recommend 100 per cent testing.
The question was whether or not the process is cumbersome. If we were to implement 100 per cent testing, that would mean that any of the carcasses or portions derived from the carcass would have to be detained until we had the results. From a logistic point of view, that would present a problem.
Some countries have gone that route, but they are coming back. The EU, as an example, started with heavy testing of healthy animals to reassure their consumers. Once Japan had their first case of BSE, they also started 100 per cent testing. They are now finding ways of moving away from that because they — and we — do not see it as an adequate measure for testing.
Whether the private sector can put together some proposals to access specific niche markets that demand 100 per cent testing is open for debate. Our minister has mentioned that that is something that could be looked at. One hundred per cent testing for BSE, or any other type of testing that foreign markets would be requesting, related to residues of hormones, drugs or whatever, can be looked at. However, from our standpoint, and from a scientific point of view, we do not see the necessity of doing that.
Senator Tkachuk: Do the Japanese require that or are they asking for that? Is that where this movement is coming from?
Mr. Gravel: You need to go back in history to see what happened in Japan. For a long time, Japan thought they did not have BSE. When they found their first case, they mentioned that they had a positive case but the animal did not go into the food or feed chain. Later, they found out that that was not the case. Indeed, the animal was distributed in the feed system, and some of it may have been put into the food system as well.
The degree of credibility of the regulatory agency suffered from the early detection of these cases of BSE because Japan claimed it did not have BSE, and then they found that they had it. Then they said that it did not go into the food chain, when it did. They were forced to adopt drastic measures to reassure consumers. This is when they started doing 100 per cent testing of cattle, which they are still doing.
The Japanese authorities have commissioned scientific reviews that are looking at that issue. They are expecting that their recommendations will be that they stick to testing of animals that are older than a certain age. However, that is undetermined, thus far.
Senator Tkachuk: In regard to the question of authorization for new packing plants, I fully understand what happened when live cattle were not being shipped and processed meat was. Obviously, that created a demand for processed production in this country. That obviously created a demand on your office. We had some rather humorous explanations by Blue Mountain and others, when they testified before us, about trying to get testing. You may have read their testimony about how difficult it was to get signed on.
How have you adjusted? Will you meet the demand? As soon as you do, they will probably open the borders and let the people go. Nonetheless, what steps have you taken to move this process along and not have some of the problems that happen, which I can understand only because of the heavy demand that resulted so quickly.
Mr. Bill Anderson, Acting Director, Food of Animal Origin, Canadian Food Inspection Agency: You mentioned one particular enterprise that was looking for registration. Certainly, that was brought to my attention early on. It was at that time that we had our blueprint review and approval process located in Ottawa. All of the files for new applications went through one desk. We thought we could service the industry better by decentralizing that process, by having in each of our areas of Canada a team of specialists that could review these applications, provide face-to-face meetings with applicants for registration, provide advice on our construction requirements and, in that way, help to speed things along.
That was done fairly early on, about the time that we were getting those kinds of complaints about our registration process. We also wanted to ensure that, by decentralizing, we had a degree of uniformity within Canada. We improved our documentation so that everyone was receiving the same documentation. Finally, we provided some training and brought these people in to get good discussions going on the uniform application of the construction requirements in the registration process.
Senator Callbeck: I wish to return to Senator Gill's question on the slaughterhouses that are registered by the province.
If you are a provincial slaughterhouse and you want to sell to other provinces, you have to be registered under the federal standards, which I understand are the same standards that are used for shipping internationally. I am told that some of those standards really have nothing to do with food safety; that they are really not necessary for domestic trade but are necessary for international trade. Am I right in that?
Mr. Gravel: The objective of all the standards in the meat inspection regulations relate to food safety, either directly or indirectly. In some cases, especially on the Blue Mountain application, I heard many people saying that the agency is requesting that the parking lot be paved and that the inspector have a big office and all of these things. The paving of the parking lot is not an immediate requirement for registration. However, from a food safety standpoint, if there are trucks driving when the shipping dock doors are open and dust is being generated, that certainly could represent a food safety hazard. There are other means of preventing that from happening. However, these requirements are all based on food safety, either directly or indirectly.
The federal system was designed with a view to maintaining acceptability to the majority of the foreign markets. At the time, the U.S. and the E.U. were the main markets. Some of the requirements in the regulations are a reflection of demands by foreign countries.
The modern way of looking at it is to look at an outcome as opposed to a standard. The desired outcome is that the meat be safe and wholesome. The way you achieve that outcome may vary. The current regulations are very prescriptive. They prescribe the way in which an establishment has to be built and operated to produce a food or a meat that is safe.
I am not saying that there are no other ways of doing it. As an example, an obligation to have refrigeration in a boning and cutting room is a food safety issue. That is because one does not want the temperature of the meat to increase to a point where bacteria will reproduce and become a hazard. If one limits the time that the meat spends in that room, one may achieve the same objective with a different approach. It is based on outcome as opposed to standard.
Saying that provinces have lower standards that arefood-safety related is not necessarily true. There are different ways of achieving food safety objectives.
Senator Callbeck: Has there been discussion with the provinces about setting up standards for plants that just want to ship to other provinces and not internationally?
Mr. Gravel: Since the creation of the agency, and even before that, when the meat inspection group was with Agriculture and Agri-food Canada, there have been ongoing discussions with provinces to come up with a meat code, one that would prescribe the standards that plants would need to meet. We now have a meat code to which the provinces have agreed which specifies the basic requirements. For it to be operational, it would have to be enshrined into their own regulations. Then the issue becomes how to deal with the constitution that governs interprovincial trade, giving authority to the federal government to do it.
What are the implications of making changes to the Meat Inspection Act to allow interprovincial trade of meat that is not necessarily approved by the federal government? What would that do to the standard that we impose on import? These questions are still being actively pursued, but there certainly has been significant discussion by the provinces on the issue.
Remember that the federal system takes care of about95 per cent of capacity. By licensing all these provincially approved plants tomorrow, we would gain a 5 per cent efficiency only. In some specific circumstances, it would be a good thing. Generally speaking, I do not think we would generate much capacity.
The major plants in Alberta slaughter 25,000 to 26,000 cattle per week. There are some provincial plants that slaughter five or six per week. In terms of scale, a 10 per cent increase in Lakeside Packers and Cargill are very significant.
Senator Callbeck: Is there any enthusiasm among the provinces to do this?
Mr. Gravel: Yes and no. There is a genuine interest in the industry to allow some movement between provinces when a plant is located close to a border, such as on the borderbetween Saskatchewan and Alberta. If there is a small plant there, it would be very beneficial for that plant to be engaged infederal-provincial trade.
Generally speaking, provincially inspected plants cater to a local market. When they develop an interest in getting bigger and entering interprovincial trade, they apply for federal registration.
Senator Callbeck: Would it be possible to set up national standards so that these provincial slaughterhouses could save money if they just want to ship interprovincially and not internationally?
The bottom line is this: People say they have to meet standards, many of which are geared to the international community. They are not geared to Canada. Is it possible to set up requirements that would still have the safety factors but not some of these other things that pertain to international markets, so that it would be less costly for our Canadian companies?
Mr. Gravel: These standards exist. The meat code is a reflection of an agreement between the provincial and federal governments with regard to basic minimum food safety standards. Those things exist now. We must keep in mind, as I mentioned, that the standard for interprovincial trade then becomes the standard that Canada will be requesting of foreign countries shipping meat to Canada. I am not saying it is bad or good, but it certainly needs to be looked at as an implication. The issue is whether we want state-inspected meat to get into Canada, and what the standards are.
Senator Callbeck: This is something that I hear time and time again, and I just wanted to try to get it cleared up.
Wayne Easter, the Parliamentary Secretary to the Minister of Agriculture and Agri-Food, has been meeting across the country with producers. At the last meeting there were three round tables. One was on the impact of government regulations on producer costs, competitiveness, industries' consolidation and market power.
Has the CFIA considered any measures, or are there measures under consideration to reduce these regulations?
Mr. Gravel: The CFIA is part of the overall government initiative called smart regulations. We are in the process of establishing pilot projects to test the concept of smart regulations. It is something that the agency is willing to look at.
Many of the initiatives that the agency has embarked upon in the last few years are related to alternative delivery mechanisms in commodities other than meat. There are efforts being made in this area. A greenhouse certification program, as an example, is a private-sector delivered program that allows shipment of plant products to the United States. The agency is willing to do this.
Many of the standards and regulations that the agency is administering are wanted by industry. They see it as a way of making sure that the market is an even and fair market. They see it as a way of reassuring foreign countries that there is government intervention. Therefore, it is easier to ship products internationally.
We have our mandate, and we can deliver it in many ways. In many circumstances, industry is pushing us to regulate as opposed to deregulate.
Senator Callbeck: I come from an agricultural province, and I hear a lot about inspection fees being high, and producers consider it an unfair burden on them.
Senator Tkachuk: Food inspection, everything in Canada seems to be on the Constitution. Is it a split responsibility, both federal and provincial, and because it is international or interprovincial, it falls in your purview, or is it interprovincial and falls in the provincial purview?
Mr. Gravel: We are responsible for import, export and interprovincial trade of food. There are exceptions, but that is the way in which the act is set up.
Senator Tkachuk: If you said, "Go ahead, sell to each other,'' if it is a provincial plant, can you not just do that? What I am getting at is that with respect to the Saskatchewan producers, most of them are ethnic or boutique producers. They make great garlic sausage. The people in Maidstone are still alive from eating it, so why can't you sell it in Vegreville?
Mr. Gravel: In some cases, food safety is an issue; in other cases, it is not. The issue is standards here. We cannot really say "Go ahead and do it'' without actually changing some regulations and acts, but it is possible. Everything is possible.
Senator Tkachuk: For interprovincial trade, why is there not some creativity? The standard has been accepted in a province. Everyone has been eating that meat for a long time; it is safe and people are healthy, and they are living awhile. Who cares if the standards are different, as long as you have minimum standards? After that, it just becomes academic and they can use it as a marketing tool to be above the standards. You have minimum standards, this will not kill you or whatever it is, and then you have standards up at the top of the rail so that people can market on the basis that they have met federally-regulated standards.
I go to a little place and buy great garlic sausage. So does everybody else. It is good food, but why can they not sell it somewhere else? Are we missing something here?
Mr. Gravel: The agency is delivering its mandate on the basis of the acts and regulations that were passed by Parliament. We are willing to look at how we can amend these acts and regulations on the basis of needs expressed by the province and industry.
I agree with what you are saying about food safety. In many cases, the small plants produce meat and food products that are just as safe as others. The outcome is what we are looking at, not necessarily the way in which the meat is prepared. We have to live with the restrictions that are generated by the legal framework that governs trade and other matters in Canada.
Senator Kelleher: Our witness is being extremely polite and diplomatic. The problems lie within the provinces themselves. The biggest problems with interprovincial trade do not lie with the federal government; they lie with the various provinces. For example, for years you could buy Moosehead beer in Florida but not in Ontario. Beer is probably the worst example.
Mr. Gravel: Margarine.
Senator Kelleher: Margarine you cannot get in Quebec. You have problems exporting hydro amongst the provinces. In Ontario and Quebec, we have a problem with construction workers. Construction workers from Ontario cannot work in Quebec. Most of the Quebec construction workers seem to find work in Ontario. It is not my usual stance but I really do not put the blame here on the federal authorities.
This process you are trying to set up with the Atlantic Beef Products people to implement a traceability system, is that coming along? How is it going? Will it be successful?
Mr. Anderson: We are quite hopeful with respect to any of the initiatives in traceability. This issue will become more important, not just in Canada but in countries around the world. It will become something that will be required to market in Canada and to sell our food products, including meat products, in countries around the world. We really need to put our interest behind any initiative that is exploring traceability, right from the identification of animals through to the abattoir level and further forward into the market chain so that if any problems arise we can get right back to the source with these food products.
Senator Kelleher: How is that coming along?
Mr. Anderson: I do not have the latest information on the progress to date with that particular project.
Senator Kelleher: Is it moving ahead? Is it stalled? What are the prospects for it?
Mr. Gravel: I think it is moving ahead. It is not stalled. It is certainly something that the agency has been involved in developing and supporting. I think it will come to fruition.
There are also private industry initiatives from one of the large Canadian packers related to genetic testing of sows, and eventually that company will be marketing products that can be traced back to farms and sire and dam, in Canada and other countries. All these things are in progress.
The agency is very keen and interested in these initiatives. We were instrumental in setting up an animal identification system in Canada at the request of the industry. We put some regulations in place, again at the request of the industry, and we now have a cattle identification agency that governs cattle identification in Canada. This puts us many steps ahead of our trade competitors like the U.S. We are very supportive of these initiatives.
Senator Kelleher: How far away are we from getting a workable system?
Mr. Gravel: We have a workable system at the present time in that cattle in Canada are now universally identified to a farm of origin. Our objective is to register date of birth in the data bank and movement between farms. I know in Quebec the provincial government has that legal authority in place, and they are moving in that direction under provincial legislation and regulations.
We think that we have established a framework that will support that animal identification system. As the compliance increases, progressively we will be capturing more data. From a food safety and animal health standpoint, if we can determine the farm of origin of that animal and the movement it has gone through between one farm and another, it will facilitate our work if there is an incursion of animal disease or a food safety incident. Those components are something that we support.
Ms. Mountjoy: To build on Mr. Gravel's comments with reference to your question about Atlantic Beef Products Inc., you are most likely aware that federal funding has been provided to them for this traceability project. Our information indicates that Atlantic Beef Products is in the process of completing a request of interest which will identify prospective suppliers of this fully integrated traceability fabrication line. We expect that process to move ahead very quickly. They will be able to move on with the implementation of this project and plant.
Senator Kelleher: With all the proposed and actual increase in slaughtering capacity and extensions of existing plants, this will mean less need for live cattle to be shipped down to the United States to be slaughtered. What do you think the reaction of the United States, at least that element, will be to this? I know they are with us, so to speak, on this problem. They are well aware of it. What do you think the American reaction will be to our expansions?
Mr. Gravel: I do not know what their reaction overall will be when all that falls into place. The American Meat Institute, which was the lobby group representing the meat industry in the United States, is certainly supporting the opening of the Canadian border because many of their plants in the United States depend on a supply of live animals from Canada. I cannot tell you how they feel about it. I know if I were an American packer, I would be very worried that, while the border is closed, Canada is developing a capacity that will allow them to compete with my American plant on markets. That is where it is going if the border does not open. Canada will be in a position to develop its own capacity, and we may be in a position to compete with the U.S. in markets such as Japan, Indonesia and Cuba with meat products. I think the Americans know this.
Beyond a small group of people in the United States that are pushing very hard to keep the border closed, we certainly feel that the USDA, the American government, some segments of the meat industry, and the cattle industry in general in the United States are supportive of the opening of the border for their own good economic reasons.
Senator Kelleher: I will now ask for a little "crystal balling'' on your part. We have this judge in Billings, Montana, and I will be nice and not say anything about him.
Mr. Gravel: He is a patriot.
Senator Kelleher: I call him a "homer.'' That is what we in the legal profession call them: "homers.'' Far be it for me to say that. In any event, I guess he put it off as far as he could with a temporary injunction to the end of July.
Just recently, somehow I ended up signing a document. I am now part of this court action that the Canadians are bringing, which, I guess, is a little contrary to what the government is doing. The government went the route of amicus curiae, which I do not think is working very well.
In any event, I have signed a document and I am part of the court action.
The Chairman: Have they accepted that?
Senator Kelleher: No, it has not been accepted yet.
I wonder if you can give us some opinions. You will not hurt my feelings about this. What do you think about what is going on? What are our chances? That is why I call it "crystal-gazing.''
Mr. Gravel: I am just a very ordinary veterinarian, and these big legal issues are way beyond my understanding. I have an opinion, if you want to hear it.
Senator Kelleher: I want to hear it. You know more about this situation than I do. That is why I am asking you.
Mr. Gravel: The way I see it, Canada has a lot of support in getting that injunction defeated. I hope that is what will happen. The Americans are far from being stupid, and they will see that it is for their own good that there is a free flow of products between Canada and the U.S. It has always been that way, and it has benefitted the two countries. I cannot see why, when a solution is mutually beneficial for both parties, that one of the parties would decide to do something else. That is my optimistic view of what will happen there.
I am surprised to see that a very small proportion of the industry in the United States is benefiting from the closure of the border, and the majority of them are suffering, or will be suffering later on. To me, I look at it from the standpoint of good common sense, and good common sense dictates that that border will be opening. That is the veterinarian's view of things.
Senator Kelleher: That is a good view. I certainly hope it happens. Thank you very much.
[Translation]
Senator Gill: In your presentation, you seem to be quite pleased with having received some additional funds. I assume these will be put towards more human resources. Will that situation affect inspection standards? What will be the impact of the surpluses or resources you have received?
Mr. Gravel: With your permission, I will ask Ms. Mountjoy to reply to your question.
[English]
Ms. Mountjoy: It is true that we have requested and received new resources to be able to keep pace with the industry as these new plants are coming on line or existing plants are expanding their capacity. With these new resources, we are carefully monitoring the registration approval process. As these establishments are coming closer to the time when they are operational, we are doing some anticipatory staffing of veterinarians and inspectors, bringing them on board and training them to be in place the moment these plants are operational. To date, we have brought on board what we call in government, the 10-10-FTEs, 10 veterinarians and inspectors. We anticipate that there will be significantly more coming on board over the course of 2005 as the expansions and new plants come on board. In all of these new establishments we are using the existing federal model of inspection oversight. We have veterinarians and inspectors there for all of the time that meat is slaughtered, and they are providing that oversight from a food safety perspective, and expert market standard perspective.
[Translation]
Senator Gill: Do you have an impact on provincial slaughterhouses? Will these additional resources have a beneficial effect on provincial slaughterhouses?
[English]
Ms. Mountjoy: We have also received a small number of resources that we can use to assist provinces in the inspection of provincial abattoirs, specifically for the purpose of ensuring that specified risk material is coming out. We have worked very closely with the provinces to determine which provinces are in a position to verify that on an ongoing basis, which provinces can benefit from some assistance from us federally, and we have moved to provide that assistance both in terms of inspection as well as enforcement for the specified risk materials.
The Chairman: Going back a little to what you said earlier, could you take us through the Japan issue again? It has become very confusing in the way we sometimes get our information through the media. On the one hand, Japan was 100 per cent at every level in terms of their inspection process. There were suggestions — and indeed I think at one point when the minister was over in Japan, there was an expectation of change, and that change would have been that the animals below 30 months would no longer have to go through that process because they would never be able to find the disease in animals that young, anyhow.
You mentioned before that they were continuing — and perhaps I misunderstood — to do 100 per cent testing. Did they change their minds or were we just misinformed through wishful thinking? It makes a difference, particularly since the committee went to Washington not so long ago. We listened in for several hours on a hearing in the American Senate where there were amazing things said, such as that we had 95 packing plants being built all across Canada, and they were shutting plants down in the United States. I practically had to be held down to keep from getting up and saying that that was not quite so.
The issue of Japan seems to be a major political issue, as well as a scientific issue, because it seems to be seen in the United States that "If we can get back into the Japanese market, then everything else will fall into place,'' but somehow we, meaning Canada, were the ones who were being accused of making that move impossible. It was not a rational conversation, but that is the way in which things were being debated.
Can you give us a quite precise definition of what exactly the Japanese are doing now in terms of testing?
Mr. Gravel: What they are doing now is 100 per cent testing. What they want to do is move away from that and establish an age limit that they will consider with the advice of their scientific community as being a safe age for not doing testing. They are still there. They are in the process of getting their system geared up to accept less than 100 per cent testing on the basis of age verification.
The Chairman: Would that be the 30 month animals?
Mr. Gravel: It is not 30 months; it is 24 months, actually. The big debate is about what they are willing to accept in terms of proof of age. The U.S. and Canada have been in negotiation with them to determine how we can satisfy the Japanese that the meat they are receiving is below that age, as verified by us, the agency, and USDA in the United States.
As far as I know, they have not actually made the changes yet. They are still reviewing scientific advice from panels that were established. However, what we understand is that it is a matter of time, as opposed to them not having made a decision. They made a decision. They are in the process of implementing that decision and they are going through a very elaborate process. That is a clear demonstration that if you move in the direction of 100 per cent testing, it is very difficult to go back, because you create expectations from the public and from other groups that this is a very safe system. Then when you try to move away from it, that becomes very difficult. This is where Japan is, I think.
Senator Mercer: How can you create expectations that100 per cent works when they have discovered — thelast number I saw was 17 new cases of BSE in animalsover 30 months? The proof is in the pudding here. I do not buy this argument.
I find all of this a bit of a fantasy that we go through in relation to international agriculture. We dance around this, saying science is proven when science is not proven. People hide BSE cases in the United States and people discover them in Japan, and they discover them here. I find that amazing that it would be difficult to move away from a system that has been proven, time and time again, that it does not work.
Mr. Gravel: Clearly, if the Japanese were to look at how much each case has cost them to discover on an individual case basis, the cost would be very prohibited, because if you do 100 per cent testing and it is $50 a test and you do a million tests then there is a certain cost. If you discover one or two animals then that whole test cost has to have been centred on two carcasses, and that is not economical. That is the price they have to pay for not having a lot of consumer support and consumer confidence.
Senator Mercer: Probably one of the problems is that people are not willing to pay the price across the board in agriculture. People are not willing to pay a fair market price for a product from farmers, whether it is beef, corn, wheat, or apples from the Annapolis Valley in Nova Scotia. Would you agree that there is a need for a discussion? The WTO is the place where we are supposed to have these discussions and where removal of subsidies puts us all on the same level playing field. If we are to have subsidized food prices, then it will need to be paid for through taxation or else we will need the consumer to start paying the real prices for the production of food. I will have to start paying the real price for a pound of potatoes from Prince Edward Island as opposed to an artificial price, or I will pay the real price for a litre of milk, and am I to pay the real price for a kilo of good beef steak?
Mr. Gravel: I was listening very carefully to what you are saying, but you are way beyond my area of expertise. The agency deals with food safety animal, and plant health issues, and I do not have a lot of confidence in my judgment on international trade and all these things. It is not in my bag of expertise, unfortunately.
The Chairman: Going back to Senator Callbeck's question with respect to the traceability equipment that has been built into the operation in Prince Edward Island, I understand that this is a test case. Has any thought been given, at the moment, to expanding that kind of testing or do you want to do it all in Prince Edward Island to see how it works before setting up the system elsewhere? Is there a sense, for instance, that in my province of Alberta, if that kind of a project is working out, it would be necessary, at some stage, to install it there, or is this something that does not have to be nation-wide?
Ms. Mountjoy: Our colleagues in Agriculture and Agri-Food Canada are working with industry on the system traceability improvements or enhancements. What we are seeing in Prince Edward Island is an example of a pilot project, and we await the outcome of that project. Through program requirements or regulations, the agency creates expectations for industry in terms of traceability, on an establishment or on a product basis. Most commonly, what we ask the industry to do is to be able to trace forward one step and trace back one step; in other words, to be able to identify where product is coming from and where it is going to. That is important from a risk management perspective. If there is an issue identified with respect to food safety, we want to be able to follow that product on to the next step, and again on to the next step. It is the same for companies. Often they take risk management interventions under our oversight in order to deal with an issue.
All that to say that Agriculture and Agri-Food Canada, through this system traceability enhancement pilot project in Prince Edward Island, may very well — and certainly CFIA would support this — decide that there is merit in expanding that system beyond, in order to make it a much more robust system overall in terms of traceability. We are eagerly awaiting the outcomes of this pilot project to see where we go next.
The Chairman: Thank you very much. Does anyone else have a comment?
Mr. Gravel: I would indicate that traceability is the key component of the agricultural policy framework. In that context, certainly the department is supporting the initiative.
Senator Mercer: I am always concerned about what we have learned from this awful mess that we find ourselves in. Are we ready for the next crisis? Because there will be a next crisis. We do not know what it will be. I could not identify it, but you may have a better idea. Even so, I do not think you would be 100 per cent accurate. Are we ready for the next crisis? Are we ready to react well as a government? Is the Canadian Food Inspection Agency ready to act more quickly than we did with respect to this one? This is not a criticism of you, but we need to learn what we did right and what we did wrong, and how we prepare ourselves, put systems in place internally, to react to the next crisis, because there will be a next crisis.
Mr. Gravel: We are as ready as we can be. We are certainly taking any measures and any lessons we can learn from the emergency that we are dealing with on a continual basis. We have already had our next crisis. After BSE, Avian influenza broke in B.C. For the last couple of years we have been involved with Emerald ash borer in southwest Ontario, Asian longhorned beetle in the Toronto area, brown spruce longhorn beetle in Halifax and major recalls. We are a crisis management organization.
We certainly do not go through any of these crises without learning a few things. BSE is one of the major ones that does not go away. The agency has done its work in terms of doing the epidemiology, the trace out, the policy changes, but it is still a crisis because the farming community and the industry has not recovered yet.
With respect to avian influenza in BC, we have done a few "lessons learned'' exercises. We are always willing to accept criticism, whether it is positive or negative, provided we can learn something for the next time. We were given additional resources to deal with the major issues that we dealt with. We also were given an additional sum of $20 million to deal with emergencies. To a certain extent, we are better equipped.
If you go through a crisis, you will soon find out that you need partners to resolve that crisis. The crisis that we have gone through has certainly lined up a few of our key partners in management. Provinces are certainly partners, either through their science capacity or their close contact with industry, and industry itself are partners.
To give you an example, when England had foot and mouth disease some time ago, after it was over we had our ownmeeting with the industry. We invited someone from England who was a producer who had been affected by foot and mouth disease. This was a joint government/industry meeting, and one of the things that the English producer said when he came to our meeting is that this never happened in the UK. Industry and government never sat together to manage this crisis. It was all government-managed. Therefore, he saw our approach to the management of such an issue as being a better approach than what he had witnessed.
Senator Mercer: Would you agree that while you have received extra funding now for the crisis, we need to be cautious as parliamentarians, and we need to be cautious as a government to ensure that we provide the proper funding to you in preparation for the next crisis. Perhaps I am asking a question the answer to which is obvious: that you are constantly in a state of readiness for the next crisis, whether it be something that attacks hogs or apples or potatoes, or whatever the product might be?
Mr. Gravel: I think you are right. In a way, we are like firefighters. You cannot staff all the time for the major fire that happens occasionally. You have to find a medium, a balance, between having a certain percentage of your troops as a reserve and not wasting taxpayers' dollars by having 300 vets sitting in an office waiting for the emergency to happen. That is the major challenge: To what extent do we have the capacity inside to deal with a crisis, and also, when we are faced with a bigger crisis, do we have access to additional funding or partners who will help us manage that crisis, whether these partners be provinces or industry or others. That is what we have been trying to do.
Senator Mercer: Mr. Gravel, thank you very much. I want to recommend to the chair and to the clerk, as we write our report, that your analogy with firefighters is a darned good one. We perhaps might want to use that analogy as we write our report because it brings home very pointedly — to me, at least — the need to have a CFIA properly funded, properly staffed and properly supported by government.
The Chairman: Thank you, senators, and most particularly, thank you, genntlemen. You have been generous with your time. You come back whenever we ask you to do so, and we will undoubtedly be asking you again. We wish you all the best. You are working in a very difficult and ever-changing area, and we appreciate your work.
The committee adjourned.