Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 11 - Evidence - Meeting of April 29, 2008
OTTAWA, Tuesday, April 29, 2008
The Standing Senate Committee on Agriculture and Forestry met this day at 7:02 p.m. to study the present state and future of agriculture and forestry in Canada.
Senator Joyce Fairbairn (Chair) in the chair.
[English]
The Chair: Good evening, honourable senators, witnesses and all who are watching our Standing Senate Committee on Agriculture and Forestry. Today the committee continues looking into the issue of farm input prices in Canada. Canadian farmers have been facing significant input price increases in recent years. For example, Statistics Canada's farm input price index shows that fertilizer and fuel prices have increased on average by 7.6 per cent and 13.9 per cent annually between 2002 and 2006. Although grain prices have been on the rise since last year, higher input prices have had a direct impact on farmers' profitability.
In addition to the reasons behind those higher input prices, the committee will be paying particular attention to input prices in Canada relative to those prevailing in the United States. Regulatory measures in Canada play a role in the availability and the prices of inputs. At the same time, regulations must ensure the safety of products and enable access to innovative products so that Canadian producers remain competitive.
This evening we will hear from Siddika Mithani and Ian Alexander, from Health Canada; and Paul Mayers and Glyn Chancey, from the Canadian Food Inspection Agency. We will cover a wide range of issues, so I encourage honourable senators to keep their questions succinct so that our witnesses have an opportunity to respond fully.
Paul Mayers, Acting Associate Vice-President, Programs, Canadian Food Inspection Agency: Thank you, Madam Chair. Allow me to express my appreciation for the opportunity to appear before the committee.
[Translation]
I appear today to discuss CFIA's responsability in assessing the safety and efficacy of new farm products.
In general, the word ``new'' designates products which are not yet sold in Canada and whose safety and efficacy have not yet been confirmed. The precise meaning varies according to the product and its intended use. I will speak today about three groups of products: livestock feed, veterinary biologics, as well as fertilizers and plant supplements.
My comments must be interpreted in the context of the mandate of the CFIA which is to ensure the safety and the well-being of Canadians, to protect the environment and the economy by ensuring the safety of feeds, the health of animal and by protecting plants.
CFIA reviews test results and scientific evidence to determine what are the effects of these products on human and animal health, as well as on the environment and to assess their efficacy.
[English]
I will discuss livestock feed in terms of these products. The CFIA administers a national livestock feed control program to verify that livestock feeds manufactured and sold in Canada or imported into Canada are safe, effective and appropriately labelled. Feed program control activities include evaluating and approving certain feed products, including new and novel ingredients destined for use in livestock feeds. This process is in place to protect Canadians, as safe feeds contribute to the safety of meat, milk, eggs and other animal products used for human consumption. The system also benefits producers, as effective feeds contribute to the production and maintenance of healthy livestock. The verification of effectiveness of the product gives Canadian farmers assurance that the product will do what it claims to do.
A service standard for the evaluation process of feeds has been in place for many years, such that 90 per cent of evaluations are to be completed within 90 days. The CFIA strives to make steady process improvements in order to meet or exceed that service standard to enable prompt market access for new livestock feed products. Industry and government share responsibility for the safety and effectiveness of feeds, feed ingredients and, ultimately, our food.
Veterinary biologics, the second group of products that I will address today, include products such as animal vaccines, toxoids, antisera and diagnostic kits. These products must also be assessed for safety and efficacy as well as their purity and potency through laboratory testing and limited field trials on the feces of target animals. Each novel vaccine is also subject to an environmental assessment.
We previously had a backlog of new product submissions in this area, but that backlog has now been nearly eliminated. To further streamline our system, we will be accepting submissions from U.S. manufacturers at the stage where our U.S. government counterparts are allowing field safety testing of the new product.
We believe that this change will enable us to provide input and comments into the product data package prior to the time that licensing is finalized in the U.S. This will also allow us to conclude our review not long after the product is available in the U.S. Therefore, there will be more rapid access to new products from the U.S. for Canadian veterinarians and animal producers. This will contribute to both competitiveness and potential animal welfare outcomes.
The last group of products includes new fertilizers and plant supplements, including those with micro-organisms. Products requiring pre-market assessment are subject to a detailed, science-based evaluation of product safety information, efficacy and labelling. In addition to evaluating the safety and desired effect of the product, the CFIA also examines unintended and potentially-adverse effects on human health and the environment.
To improve the waiting time for product approvals, the fertilizer program has developed a short-term action plan to reduce the current backlog of 900 active submissions to a sustainable baseline level of 300. The action plan combines additional resources with policy changes designed to streamline the review and assessment process without compromising its integrity.
In all of these areas — feed, biologics and fertilizers — the CFIA is actively engaged with our regulatory counterparts in the United States, Europe and other countries to build on best practices and to pursue international harmonization where possible. Getting safe and efficacious products to the marketplace is recognized to be important in order to facilitate innovation and to benefit both producers and society.
[Translation]
Thank you for your interest for this issue. I will be very happy to answer your questions. I will now let my colleague, Ms. Mithani, start her presentation.
[English]
Siddika Mithani, Associate Assistant Deputy Minister, Health Products and Food Branch, Health Canada: I would like to thank the committee for inviting Health Canada to discuss the approval process for veterinary drugs. I want to begin by emphasizing the important role that Health Canada plays in protecting human and animal health and ensuring the safety of Canada's food supply.
Health Canada evaluates and monitors the safety, quality and efficacy of veterinary drugs. The department also promotes the prudent use of veterinary drugs administered to food producing animals as well as companion animals.
[Translation]
For a drug to be marketed in Canada, a manufacturer must submit data to substantiate the safety, efficacy and quality of their product under the proposed conditions of use. A new drug submission that is filed by a manufacturer must satisfy all the requirements under the Food and Drugs Act and regulations, administered by Health Canada.
[English]
A new drug submission must contain the following information: chemistry and manufacturing information about the drug product; pharmacology and toxicology studies; clinical animal studies; and tissue residue studies if the drug is intended to be used in food-producing animals.
A new veterinary drug is approved for sale in Canada only if Health Canada is satisfied that the drug is safe for the animals to be treated and effective for the purpose it is being marketed; it does not leave potentially harmful residues that could pose undue risks to humans eating food products from treated animals; and the product is of consistent and high quality and appropriately packaged and labelled.
[Translation]
Health Canada plays a critical role in establishing maximum residue limits together with an appropriate withdrawal period to ensure that the levels of residues can safely be ingested daily over a lifetime and will not pose undue risk to human health.
[English]
I have reviewed some of the testimony that your committee has received on the approval system for veterinary drugs, and I would like to take this opportunity to highlight that the department has taken several steps to develop efficiencies and improve the timeliness of the regulatory approval process.
A new drug submission tracking system has recently been introduced to better coordinate the regulatory process for drug evaluation. This system enables manufacturers to monitor the status of their submissions throughout the review process.
[Translation]
Health Canada continues to work with industry to develop processes and guidance documents to help them in filing complete and high quality submissions.
[English]
The department also continues to encourage pre-submission meetings in order to inform industry of Health Canada's drug submission expectations.
[Translation]
I am pleased to inform the committee that Health Canada is anticipating the elimination of the backlog for veterinary drugs by early 2009.
[English]
In addition, it is important for the committee to know that Health Canada is working with its international partners in the sharing of information on approval and post-market surveillance of veterinary drugs.
Health Canada continues to participate in international committees, such as the VICH, which is the International Cooperation on the Harmonisation of Technical Requirements for Registration of Veterinary Products, and the Codex Alimentarius Commission, to move forward on international harmonization issues.
Together with the Canadian Food Inspection Agency, Health Canada has recently established an external advisory committee that will assist in improving efficiency, capacity, responsiveness, cost effectiveness and timely availability of veterinary health products.
[Translation]
The department is aware of the desire from livestock producers to increase regulatory cooperation and we are working toward increasing our efforts in developing standards and regulatory requirements with international bodies.
[English]
It has also been noted that Organic Product Regulations has been raised as an issue that will limit access to natural health products for use in organic livestock production. Health Canada is working with both the CFIA and the Canadian General Standards Board to ensure the continued availability of safe products on the market.
In addition, we are working with the CFIA and the Canadian Animal Health Institute on classification criteria to differentiate drugs versus feed additives and to identify which regulatory framework would be applicable to the product. This is particularly important with respect to natural health products.
In conclusion, Health Canada is committed to ensuring timely access to safe and effective veterinary drugs; working internationally to develop standards for veterinary drugs; continuing to work with its stakeholders to improve efficiencies and provide clear and transparent guidance; and ensuring the continued protection of the health and safety of Canadians and Canada's food supply.
Dr. Alexander and I will be pleased to answer any questions you may have.
The Chair: Dr. Alexander, will you wait for the questions or would you like to say a few words now?
Ian Alexander, Acting Director General, Veterinary Drugs Directorate, Health Products and Food Branch, Health Canada: I will wait for questions.
Glyn Chancey, Acting Executive Director, Plant Products Directorate, Canadian Food Inspection Agency: I would also be happy to simply answer questions.
The Chair: That is good news for the ones who will ask them because they really do get into it.
Senator Segal: First, thank you all for making time and for providing your expertise and the benefit of your experience for the committee's work. It is very much appreciated.
As professionals — if I can make a distinction between that, your area of discipline, and folks who are governed by a statute working in a department that has rules — have any of you had significant experience that would lead you to believe that American regulatory authorities are lax, inefficient, less concerned about safety or less concerned about the clarity of product labelling? During your time in the various agencies you have served on behalf of all Canadians, have you ever come across a circumstance where that would have been a logical conclusion? You might not have expressed it for diplomatic reasons but you might have been troubled because they were being a little lax, unfocused or a little too driven by commercial interests. I would not ask you to give a specific context since that is confidential. However, have you ever been troubled by that in your professional work on our behalf?
Mr. Mayers: We have enjoyed a tremendous amount of collaboration with our colleagues in the United States. The regulators in the U.S. are indeed professional and capable. We enjoy working with them. They operate in a different system that occasionally takes a different approach toward the same outcomes. The outcomes they pursue are those that we share: the protection of human health, the protection of animal health and the protection of the environment.
Senator Segal: Would that be a view colleagues would share?
If you meet with the horticultural industry or the beef industry they will all say, while being generally complimentary of the work you do, that their major competitors are the Americans. For example, we will not allow animal parts to be part of a feed process for good and important reasons. However, we allow the importation of cattle coming from an American system that may not necessarily have rules as strict as ours. Canadian producers may be deeply troubled by the fact that it is not a fair playing field.
I am not suggesting we should be any less strict than we are being. It is unrelated in a sense because it is plant based. However, you often hear from the horticultural industry that Canada will ban a particular chemical the Americans use on cherries to make those cherries look brighter and shinier in the supermarket. Our growers cannot do that. Yet American cherries can be imported into our supermarkets and they actually look better than our cherries. Our farmers are in a competitive battle trying to survive.
I understand that there is by definition a series of unintended consequences that can develop event by event or situation by situation. However, setting aside the fundamental issue of whether we regulate because we have to or because we can, would it not be better for Canadian farmers if there were a system across North America that imposed the same standards and that was, from the point of view of the consumer, the farmer and the producer of the various chemicals and products, largely the same?
There are costs in replicating the process. I do not suggest for one minute that you and your colleagues do not work tirelessly to make it as efficient and appropriate as possible. You also want to make it safe; that is your primary focus, and I respect that. However, you can understand why a farmer trying to survive, given the input costs referenced by our chair, would be anxious about some of the unavoidable, but by statute necessary, duplication we now have.
I think about our European friends and others who have tried phytosanitary and other measures to create a larger market. You are regulators on the safety side. It is not your job to address the broad scope and size of the agricultural market. That is not your obligation. However, can you share your reflections in that context from the farmer's point of view?
Mr. Mayers: The issue of seeking harmonization is always very close to us in recognizing the close relationship that we have with our neighbours to the south. We work closely with our U.S. counterparts, taking careful note of any differences that exist and seeking to understand the scientific underpinning for those differences. We are also working, as you have suggested, to reduce any potential differences and to seek ultimately a single approach to resolving a particular issue.
That is why we also work to seek harmonization through standardization through the multilateral mechanisms that exist: OIE, the World Organisation for Animal Health; Codex Alimentarius for food safety; and the International Plant Protection Convention in the area of plant health. Occasionally we end up with different interpretations around the science.
Both Dr. Mithani and I worked closely with our American counterparts this last year around the issue of a drug that is permitted for use in the U.S. that is not permitted in Canada and several other countries as a result of some concerns related to its safety. We recognized that our approaches may differ to addressing the human health interests in products. The CFIA has its enforcement responsibility and Health Canada has its human health standardization perspective. Dr. Mithani can speak more elegantly than I about that. We wanted the same outcomes, recognizing that the U.S. was taking a different approach. Therefore, we worked with the U.S. to obtain assurances that the product coming to Canada would not contain residues of that drug.
There are occasions where the approach employed differs. It may be different because of varying interpretations around the science or because the legislative framework within which we work is not the same. The outcomes remain the same in terms of our interest. We seek to minimize the implications and impact on the industry of those differences, recognizing that those differences can have the potential to introduce challenges in competitiveness of which we must be cognizant.
Ms. Mithani: I would like to echo what Mr. Mayers has said. It is important to understand that we strive to work with our international partners and that there may be differences in interpretation of the science. We work in a different regulatory framework.
In some instances, when we look at veterinary drugs, in particular, Health Canada cannot compel companies to submit or file an application. Therefore, we are at the mercy of companies to do that. There are differences, but we truly strive to move forward in ensuring international harmonization and standards.
Senator Segal: With respect to goods that might come in from China, South America or other parts of the world, I have heard farmers express concern that the level of our own testing and stringency with respect to standards around health, safety and related matters is substantially higher on what we produce here than on goods imported from other places. That sets up a less-than-fair regulatory balance.
If you walk into a supermarket and you see Canada No. 1 or European fresh fancy strawberries, turn the package over and it says made in China. I understand that it is not your job to deal with product labelling in that sense. However, whatever the regulatory process was, you wonder who checked the residues and the other factors that may be on that fast frozen product. Was it done the same way that Canadians producers are held accountable to the highest possible standards? It is a legitimate question for farmers to have when they are being beaten on a price basis and they want to be able to compete.
Mr. Mayers: It is absolutely a legitimate question. Products that come into Canada from offshore are held to the same standard. The Food and Drugs Act and its regulations establish that the products are held to the same standard.
However, there is an important difference. We have the opportunity in Canada in working with domestic producers to employ a whole chain approach in terms of those controls. We do not have that same luxury in our interaction with foreign producers. Therefore, our focus, in terms of imports, is largely on the end product and simply using a testing approach. In Canada we can interact with farmers, from working with producers' associations to develop on-farm food safety programs all the way through to the end product.
We recognize that this interaction is an effective interaction and oversight. For our producers, it means they see us more than they would imagine our engagement is with the foreign producer, because our engagement is with their product, not with the producer.
It is a different relationship. However, the outcome and the rules around it are the same. It simply means that the foreign producer and the importer here in Canada take on the vulnerability and risk of product rejection, because that is our only mechanism once the product arrives if it does not meet Canadian standards. In the case of the Canadian producer, we have the opportunity to work with a producer to bring about compliance.
It is different. I would not characterize that difference as meaning that Canadian producers are subjected to a more stringent level of oversight. It is simply a different type of oversight.
Senator Mercer: Politics is a funny game. Senator Segal asks that question and he sounds pro-American. If I asked the question, I would be accused of being anti-American.
I am very interested in the approval process for veterinary drugs. We have heard testimony before about the problem, but I want to get to that in a moment.
In your presentation, you said that in general the word ``new'' refers to products not currently on the market in Canada. Does that mean that these products are being used elsewhere, or are they brand new products that have not been used anywhere?
Ms. Mithani: It could be that they are marketed in other countries, so they are being used elsewhere. As I mentioned earlier, we cannot compel a company to file an application for a new drug.
Senator Mercer: Should we be able to do that?
Ms. Mithani: It is a very good question.
Senator Mercer: I have learned to interpret that remark from a bureaucrat — it tells me a lot. I understand you may not be able to say exactly what you mean. I will cut you off to keep you from getting into trouble, but I have understood what you have said.
You also said that the feed program control activities include evaluating and improving certain feed products, including ``new and novel ingredients.'' It is unusual to see the word ``novel.'' Can you elaborate on that?
Mr. Mayers: Certainly. We use the term ``novel'' to refer to a particular category of product. Here, that includes products of biotechnology. The novelty, in terms of products of biotechnology, refers to the fact that these products have been subjected to a process of genetic modification that introduces traits that would not previously have been present in that particular plant, for example.
The novelty context, in that case, distinguishes from new — as in not previously marketed — by also characterizing the fact that the product has undergone some change that merits the demonstration of both its safety and its efficacy.
Senator Mercer: Mr. Mayers, you said that the backlog of new product submissions has nearly been eliminated in the area of veterinary biologics. Then Ms. Mithani said the department has taken several steps to develop efficiencies and improve the timelines of the regulatory approval process.
When the people from the industry were before the committee, they made a specific comment about the backlog; they were concerned about it. They also said nice things about the regulatory process for a short period of time.
I drew a conclusion that night, and I wonder whether you could substantiate my conclusion or refute it. Is this a personnel situation or a systems problem? Is it that the right people are not in the right place — or that the right person was in the right place when the program sped up as fast as it did — or is it the structure that you are working under?
Ms. Mithani: I think what has brought us forward is being able to change the culture within the organization. Having someone come in with a new vision, with a goal to eliminate the backlog, to work with people to make sure that culture change occurs, was very important. I am confident that the elimination of the backlog will continue — and not just continue but be sustained. We will be able to sustain review on time.
It is not a question of capacity but rather of being able to implement process improvements within the system, to work with industry to help them come in with submissions of high quality, and to be able to articulate what the submission requirements are so that they are able to understand what they need to file when they come in. There have been many process improvements, and we have been able to change the culture, to shift the paradigm to recognize that having drugs on the market that are safe, efficacious and of high quality is good public policy.
Senator Mercer: It seems to me that the ability of industry to articulate their message is also dependent on Health Canada's and the CFIA's ability to comprehend it and react quickly. I have come back to my conclusion from the previous meeting that we are not talking systems, we are talking people.
Ms. Mithani: I think it really has been process improvements. Also, we have nurtured a very good relationship and partnership with industry. Again, we have been able to articulate what our requirements are; we have worked with them and have set target times for the review of submissions, and we have been able to respond to them in a timely manner. That has all created an environment that is more conducive to having that relationship.
Senator Mercer: Mr. Mayers, under the heading of fertilizers and plant supplements, you said that there is a plan to reduce the current backlog of 900 active submissions to a sustainable baseline level of 300. I like that.
Should whatever worked for the veterinary biologics not work here? Can we not implement the process that worked on the one side to speed up things on the other side? We have had good news on the veterinary biologics. Can we not do the same on plant fertilizers and supplements?
Mr. Mayers: The elements of progress in veterinary biologics are also elements in the action plan. My colleague Glyn Chancey could speak more about the fertilizer action plan.
The Chair: Do not hesitate, Dr. Alexander or Mr. Chancey, to hop in when you feel like it.
Mr. Chancey: We are essentially moving in the same direction. I think we see the same variables or factors that Dr. Mithani referred to as being the ones we are focusing on in achieving those targets.
Through an extensive series of engagements with the stakeholders, we concluded that the action plan we have now is the right course. By stakeholders, I do not mean just the regulated parties; I mean the consumers of the products as well. We laid ourselves bare, to a certain extent, as part of that process. This began in 2005. We realized that simply injecting new resources into the program would not take us where we need to go. We needed to redesign and modernize the regulatory framework to address the challenges of today, not the challenges of the 1950s and 1960s when the current regulations were developed. We had a great deal of success when we opened ourselves to our stakeholders and admitted the kinds of challenges that we were facing. They became a part of identifying the path forward.
That path forward is comprised of some changes in the policies to ease the regulatory burden where it is unnecessarily excessive at present, some system modifications, and bringing in the right new people. We are well on our way to achieving the targets we set for ourselves.
Senator Mercer: I draw the committee's attention to a line on page 5 of Dr. Mithani's statement. I have highlighted it to remind all of us. I quote:
I am pleased to inform the Committee that Health Canada is anticipating the elimination of the backlog for veterinary drugs by early 2009.
Perhaps we should visit again in early 2009 to see how that is progressing. I will even say March 2009 to give them a few months' grace.
The Chair: We will make note of that.
Senator Callbeck: Mr. Mayers, you talked about making improvements to livestock feed, but you did not mention the Feeds Act. I would like your comments on that. We heard witnesses from the Animal Nutrition Association of Canada who were critical of the Feeds Act. They indicated that the Feeds Act and its supporting regulations were outdated. Do you share their concerns? If so, is the government considering reviewing the Feeds Act?
Mr. Mayers: The Feeds Act provides a reasonable oversight framework. The regulations under the act should be under routine review, as should all regulations. In that respect, as we review and update regulations, we seek to shift regulations from a prescriptive model to a more outcome-based model.
For example, we have been working closely with stakeholders — those who produce feed as well as those who use the products — to elaborate a new regulatory framework around the use of feeds as the delivery mechanism for medications. In that context, we have been highly focused with stakeholders around a more outcome-based approach. We recognize that regulations can stipulate what one must do to achieve an outcome, or, conversely and beneficially, they can clearly articulate the outcome being sought and provide the industry with a certain amount of flexibility in aligning how that outcome is achieved with their particular business practices.
Moving to a more outcome-based approach is entirely possible within the existing legislative framework of the Feeds Act. Reviewing the regulations and modernizing, as we recognize in the context of other areas of programming, is an important part in reducing the prescriptive, more narrow interpretations that might constrain modern industry mechanisms.
Senator Callbeck: I would like to know whether the government is reviewing the Feeds Act. In the first part of your answer, you talked about regulations and said that you were relatively satisfied with the oversight framework, I believe you called it, under the act.
Mr. Mayers: That is correct.
Senator Callbeck: You are not looking at making changes to the Feeds Act.
Mr. Mayers: Our current focus is the regulatory framework under the legislation because it provides the necessary authorities to address the safety and efficacy issues related to feeds.
Senator Callbeck: The regulatory regime under the Feeds Act is missing out on many novel feed ingredients that would enhance an animal's ability to transform the feeds consumed. That problem will be taken care of under the regulations.
Mr. Mayers: That is correct. We have regulations that provide for the review and the inclusion to the list of permitted feed ingredients of novel products, which we had discussed. We have the authority to assess, approve and facilitate the market entry of novel feed ingredients. The example I used earlier, and will continue to use, is products of biotechnology.
We have that mechanism, and we recognize that there continues to be an interest in early access to innovative feed products. We want to facilitate that process while assuring producers that those feeds, if they choose to buy them, are safe and efficacious. The effectiveness and safety of feeds have a direct impact on the livelihood of producers in terms of the health of their animals.
We have in place service standards related to the review of these products so that we can provide predictability to those who introduce novel feeds into the marketplace. We are making real progress in meeting those service standards so that new feed ingredients can be approved and available to producers.
Senator Callbeck: My other question is on generic drugs. Under the personal use program, farmers can import generic drugs from the United States, but they cannot buy them in Canada. Why is that?
Ms. Mithani: In response to that question, the Canadian Animal Health Institute would say that it is because the regulatory environment has not been conducive for companies to file applications in Canada, given the existing timelines. We anticipate eliminating the backlog by March 2009. This fiscal year we are hoping to develop the guidelines on generic submissions. That will streamline the process for bringing generic submissions into Canada, again, as a mechanism to get companies to bring their products across the border.
We are not involved in the pricing of the drugs. However, we now have an opportunity to create an environment that will allow for timely regulatory approval of products.
Senator Callbeck: What about the cost? We hear complaints about the regulatory cost, whether it is from the producers, the pharmaceutical manufacturers or whoever. Will streamlining and eliminating the backlog bring down the costs?
Ms. Mithani: If you are talking about drug costs as in what it would cost a farmer to purchase a drug, that is not in the purview of Health Canada. However, are you talking about the costs of filing a submission?
Senator Callbeck: Right.
Ms. Mithani: In our cost recovery system right now, the costs of filing submissions and regulatory review are far less than those of our international partners.
Senator Callbeck: They are?
Ms. Mithani: Absolutely.
Senator Callbeck: That is good news. Thank you.
Senator Peterson: You have probably gone through some of this stuff and have addressed it. However, I want to clarify it again.
We have been told that the Canadian regulatory frameworkis an obstacle to innovation. In Europe, the risk management analysis can take less than two years. It takes five to eight years in Canada. When you talk about removing the backlog, is this what you are referring to, dropping the time to less than two years?
Ms. Mithani: Yes.
Senator Peterson: That is excellent.
Canadian producers have told us that the regulatory requirements vis-à-vis their counterparts in the United States have put them at a competitive disadvantage. Is that a fair statement?
Ms. Mithani: In what way? Can you please clarify?
Senator Peterson: It costs Canadians more than it does their American counterparts to access certain things required under our regulations. Are we doing anything to close that gap, or is it something we have to live with?
Ms. Mithani: There are international collaboration and international standards setting, and Canada participates in international forums, such as Codex and VICH, that come up with international standards. As we move forward, there is a real opportunity to have standardized requirements across the world. One would hope that in years to come a company would file a virtual submission across the world and be able to get the same timely approval or rejection probably at the same time.
Senator Peterson: Since 80 per cent of our trade is done in the United States, I would hope that we start there and then expand to the rest of the world.
Senator Gustafson: I am very interested in the welfare of farmers and how all this relates to them. I will use a couple of examples, but one is the rusty grain beetle. You are all familiar with that, I am sure. It is found in wheat.
A farmer takes a load of grain into the grain company, and if there is a rusty grain beetle there, he is told to take that load home and treat it at home with Phostoxin or whatever chemical he wants to use. That is a very costly operation. If he is 50 miles from his elevator, he has to load that grain up, take it home, auger it into another bin and let it sit for 10 days. Then he can bring it back.
I have contended for a long time that the grain company should bear some responsibility. They could do it much easier. All it would take is regulations. I have taken it up with the grain companies, but they do not want to hear about it because it is extra work for them. On the other hand, they have the facility to do it much more simply; they have the handling system. It would be much safer, too.
I am wondering, when you negotiate with the people out in the field, do you negotiate with the grain companies or do you bring farmers into consideration?
Mr. Chancey: We bring them all into consideration. However, we would normally be negotiating with the foreign country or the plant health authorities from the foreign country who have imposed the import requirement in the first place.
Senator Gustafson: That is understandable.
Mr. Chancey: That is usually the focal point for these kinds of discussions.
For example, we are presently involved in a negotiation with India on the entry of pulses — lentils and chickpeas and so on. They have fumigation requirements, or certification requirements if you can demonstrate that you have freedom from certain pests. Unfortunately, we do not have freedom from all the pests of concern. Currently, we have several options. One is to test the grain and certify it. However, the results from the tests do not come back until the boat is on the water because the grain companies and the farmers collectively do not have the ability to trace back their contributions to those shipments.
What is the relevance of that to your question? It comes down to accountability and who should bear the cost for the crop management. We often hear that if those costs were imposed at the terminal — at the grain head — they would essentially be borne by the farmers delivering the grain anyway because they would become a cost of the intermediary. The intermediary, in this case, will derive its revenue from the export market that it ships to and it will not have any influence over the price there. The farmer will end up paying.
Senator Gustafson: He always does.
Mr. Chancey: The question is whether all the farmers should pay or whether only the farmers who happen to have the pest should pay. In the absence of systems that allow you to trace right back to the farm, we are rather stuck with the problem we have now. If you look at where the government's efforts — in particular Agriculture and Agri-Food Canada through their traceability projects — are moving, five or ten years from now that may not be the case.
Senator Gustafson: It is very simple to trace it. They probe the truck. If they come up with one grain beetle, that truckload is going back even though you could probably find grain beetles in every elevator in the country. I believe you could.
Do not make it any harder for the farmer than it already is. If there are negotiations on these kinds of things, I would hope that you would sit down with people who are in the know, those who handle it, and come up with the best regulations.
Mr. Chancey: As our first priority, we try to have the restrictions removed or reduced. At the end of the day, the most cost-effective way to do so is to focus our attention internationally on ensuring that those import requirements are, in fact, necessary.
Quite often, in many of the export markets we are dealing with, the degree of protection imposed, if you like, is not always necessary, in our view. That is why we take a scientific, risk-based approach to engagement.
Again, in the case of India, we are focused on the risk assessment that we have asked them to provide. We increasingly take this route. It does not offer a quick response, but in the long haul, it is probably the best way to deal with these problems.
Senator Gustafson: When you licence a chemical, for instance, do you deal with the farmer as well as the grain company or the chemical company?
Mr. Chancey: I cannot speak for the Pest Management Regulatory Agency, who would be responsible in the case of pesticide products.
In the case of fertilizers, the focal point for communication around approval is the applicant. We are bound by certain confidential business information requirements in that regard. However, the policies applied to the assessment are subject to broader input.
The modernization initiative that I referred to a few minutes ago involved all the major farm organizations as well as the industry associations and individual companies and farmers. It is an ongoing dialogue.
Senator Gustafson: I have one more question in regard to pricing. I ran into a farmer a couple of weeks ago. At this time of year they delouse the animals and pour a chemical down their backs. It may be for warbles or other mites and bugs. In Canada, the product would cost $400, but it costs only $80 if you bring it in from the United States. That is quite a difference in cost. Why can we not get our prices down even close to that?
Mr. Mayers: Dr. Mithani already noted that the issue of product pricing does not fall within the authority of the CFIA as it relates to veterinary biologics nor in the case of Health Canada for veterinary drugs. Therefore, I would only be speculating if I were to engage in any discussion of the issues that play into pricing. The Canadian providers who produce the products and the association that represents them might be able to provide greater insight.
We pay significant attention to the issue of backlog reduction because our focus is on the product once it reaches the market. We recognize that the longer it takes for a product to make its way through the regulatory system, the more the ability of the applicant to recoup costs by having that product in the marketplace is impacted. That in turn may have an impact on price, as it does on availability. Therefore, our interest is to minimize backlog and minimize that time in the process to align it as much as possible with other markets where similar products are seeking market approval. The other issues that play into the decision of how to price a particular product are beyond our particular authority.
Senator Gustafson: You would have to say then that the company coming to you with a product for licensing really has the clout. If a farmer wants to buy their product, that is up to him. If the price is out of line, that is up to the company. In other words, the companies have a lot more lobbying power than the farmers do.
Mr. Mayers: We neither have the ability to force them to bring submissions to us for market entry, nor do we have any authority to direct them in relation to the pricing of the product. In that context, you are absolutely right. In that interaction with the companies, we have no ability to take into account the views of the consumers of the products — that is, the farmers — as they relate to the costing of the products.
Senator Segal: Do you have anywhere, on a spread sheet or in a big chart in your offices, side-by-side comparisons of veterinary drugs approved for use in Canada and those approved for use in the United States? Do you maintain that kind of watching brief?
Ms. Mithani: No, we do not. The reason for that is that companies may make business decisions to market their products only in one country and not in another. Therefore, if a product is available on the market in the U.S. or even in Europe, it does not mean that the company has also decided to file the same application in Canada.
However, when products are in the U.S. market and we have submissions made in Canada, we have a memorandum of understanding with the U.S., and a lot of information sharing happens in order to facilitate the review process.
Senator Segal: Let me ask you about changing the onus. I gather the onus now is that someone applies and you begin the assessment process based on established technical criteria. What if we reversed the onus in this way: A company applies and is deemed to be approved unless you come back within 60 days and say there is a problem. What if we created the notion that it was your job to find the problem and the company's job to provide the product, particularly if it has been licensed somewhere else in a legitimate jurisdiction like the United States or Europe? Would that cause chaos? Would the population be at great toxic risk instantaneously if we were to impose that kind of real- time reality test on this process? Would that be intrinsically unfair to you and your scientific colleagues?
Ms. Mithani: Every submission is reviewed on the basis of sound science. The evaluators at Health Canada look at the risk-benefit analysis for a particular drug that is used in the Canadian context. There is a risk-benefit assessment, and only when the risk profile is favourable is a drug placed on the market.
Based on sound science, it is very difficult to speculate about whether or not this would cause chaos. However, I would say that it would be very unsound scientifically. In order to ensure the safety, efficacy and quality of products, the information that is submitted needs to be reviewed.
Senator Segal: I understand why safety is a primary concern. Why do you care about efficacy?
If a drug is being used in the United States, has been approved by American authorities and is broadly used by the farming community, there is evidence of efficacy in another jurisdiction. Why do we have to replicate the whole process and proceed as if nothing had happened and take the amount of time necessary to do that?
I do not question the sound science, the technical acuity and the professionalism. All of that is outstanding in Canada and probably better than can be found anywhere else in the world. That is not my concern.
My concern is that time is money and money is survival to our farming community. I am wondering what we can do together to achieve economies here to protect the farmers' rights, assuming they do not want to produce or use an unsafe product. They would not use the products unless they saw their American colleagues, in various cattle and other associations, speaking positively about the their outcomes.
I know you are talking about working through the backlog, and we will all gather in March and celebrate that success. However, there is the larger question of whether the intrinsic process of the burden of proof that is on them is one that the farmer can never win if timeliness is also important.
Ms. Mithani: Timeliness is very important to us, which is why our focus now is on the elimination of the backlog, but that is not the only goal for the Veterinary Drugs Directorate. We also are working to ensure that there is integration and interaction between drug companies and the Veterinary Drugs Directorate during the development of particular drugs.
Key points are being able to look at drugs based on a product life cycle and getting industry in early on in the process, so that we can look at what data we would require in order to proceed forward. There is an advantage to having companies come into the process earlier on: then we have experience with a newer drug, and when it does eventually come as a new drug submission, there is a lot more comfort because we have followed the drug and there has been appropriate intervention at many times during the product life cycle in order for us to improve the efficiency within the process. It is not just about eliminating the backlog; it is about being able to work smartly and effectively with industry to move this forward.
We also have interactions with other regulators around setting standards, exchanging information and joint reviews. We are looking at the reviews from the U.S. in order to facilitate the elimination of the backlog. Those are some elements of the process we have put in place.
Senator Segal: Could I ask about your interaction with your colleagues at Agriculture and Agri-Food Canada? They have a different mandate, mission and statutory base. Your statutory base and requirements are precise and direct. It is a prophylactic proposition with respect to public safety, and I respect that. However, while the farmers might respect that, they are being encouraged by Agriculture Canada to do certain things, change certain practices and improve activities around the research mechanisms of Agriculture Canada.
We all have an interest around this table, without regard to profession or partisan distinction, in the viability of the farming community. Are you able to link up with Agriculture Canada? Are you integrated fully with their programs with respect to imports and exports and the sorts of production they encourage, or do you have to keep at arm's length because you do what you do and they do what they do and it is important that you do not get unduly contaminated by their mission, which is different from yours?
Ms. Mithani: We work collaboratively with Agriculture Canada as well, so we are aware of their programs. They also are aware of some of the issues and the challenges that we have as we move forward with the reduction of the backlog. These include looking at how we encourage industry to bring generic submissions into Canada; how we need to work with our stakeholders; what types of drugs are important that need to be available here in Canada; what mechanisms we have in place to ensure availability of those products that are critical for farmers. We do work with Agriculture Canada; we are aware of their programs and they are also aware of some of the challenges. Together, we look at a path forward.
Senator Segal: You talked about good science and, of course, good science is about peer-reviewed analysis. Aside from the work that the Auditor General does across all government departments from time to time on the core questions of probity and value for money, can you share with me what your processes are to ensure that your internal processes and the good science are externally reviewed by people who have no stake in your success or in the structure of your operation? Rather, they just have a stake in providing a third party analysis from time to time that assists you in making improvements or changes, as might be necessary.
Ms. Mithani: We explore many avenues during the review and evaluation of submissions. For example, in some cases we will look for external reviewers. Health Canada does not always have the expertise in-house. In the last little while, we have really gone out to look for experts. We have had expert reviews and also expert advisory panels.
In a situation where the science might be controversial, being able to get the experts, the veterinarians, together to help us to put forward recommendations will help us move forward. We have explored various avenues. We have looked at peer reviews; we do engage veterinarians; we do engage experts and have a relationship with the Canadian Veterinary Medical Association. We are aware of some of their challenges and they are aware of ours. There is a great interaction between us.
Senator Segal: In these various advisory bodies, do you ever involve any of the graduates of universities like Guelph, who have degrees in soil science and animal husbandry and who may also be farmers? Do any of those folks ever get invited into the advisory process in some substantive way?
Ms. Mithani: As you probably know, we have a process that identifies people within advisory groups. There is a formal process: a call letter will go out to the Canadian Veterinary Medical Association or other stakeholders, and they will provide certain people for representation on expert advisory panels. We have not looked at that right now, but we will.
Mr. Mayers: I would like to add one thing to what my colleague has said in the context of the overall review, and that is the international dimension. In addition to all of those practices, also important in the context of the approaches that we apply is consistency — not only in terms of the rules, but also in terms of the evaluation practices.
We rely on our work in international forums like Codex Alimentarius to validate what we do by aligning our approaches with those that have been elaborated through the consensus-based processes among many countries who undertake similar evaluations. We have a high degree of confidence that the science we are employing to reach decisions is appropriate and valid for the purpose that is intended, which is to support effective decision making.
The Chair: Colleagues, the clock is ticking away and we have three more senators who wish to ask questions on the second round, which is just fine. If you could be as crisp as you possibly could, then we can make sure that our guests will be able to have enough time to answer.
Senator Mercer: Senator Segal has confused me because he talked about legitimate jurisdictions, and I wondered what he considered to be illegitimate jurisdictions. I did not want to put the panellists on the hot seat and have several illegitimate jurisdictions. It does bring to mind the argument we have heard in other areas — not just in this committee but many other committees of Canada — that Canadians always agree to play by the rules and do play by the rules, where others throughout the world perhaps not so much.
Is this the case in this area of veterinary medicine and fertilizer? Is this what we are crying about — Canadians being the good guy? Are we saying we are following the rules that we have agreed to internationally, and others are acting perhaps not outside the rules but are stretching the rules to the limits to their own advantage and to the advantage of their farmers?
Mr. Mayers: In terms of the CFIA's responsibilities for enforcement and compliance related to the rules, we operate a program, and earlier we discussed the issue of imports. In our programming, we have occasionally identified concern related to the inappropriate use of certain veterinary drugs in a particular commodity, for example. I will use the example of aquaculture. When we identify that a residue from a drug not permitted in Canada in a specific aquaculture commodity is being routinely exceeded, we will work with the exporting country to seek to resolve the situation, while at the same time increasing the level of our oversight on the imports. We will move products to 100 per cent inspection, which means that each lot of the product arriving in Canada is subject to testing before it can be released. We work with the exporting country to reduce the potential inappropriate use of a veterinary drug in aquaculture.
We have gone through this process more than once. We worked with our colleagues at Health Canada to determine the risk. Health Canada undertakes the risk assessment and advises the CFIA. We share that information with the exporting country and work with their authorities on the oversight that they will employ before their products are exported to Canada. We will validate that with up to 100 per cent testing here if necessary. If it appears that producers are not being as careful as they should be in the use of these kinds of inputs, then steps are taken to return the situation to compliance.
Senator Mercer: Do we deny entry to the products in such cases?
Mr. Mayers: Absolutely. In that example, any product that does not meet Canadian standards will be subject to rejection.
Senator Mercer: How often does that happen?
Mr. Mayers: I do not have the data on rejections at hand. Of course, as you can imagine, those rejections rates vary from commodity to commodity. In some cases, the rejection rates were sufficiently significant at 25 per cent of shipments, so we took these steps quickly to regain appropriate compliance levels to above 95 per cent.
Senator Mercer: I am reassured by your previous answer to Senator Segal's questions when the word ``safety'' arose a few times; and I applaud you for that.
Senator Peterson: I will follow up on Senator Gustafson's question for treating livestock for warbles. The drug costs $400 in Canada and $80 in the U.S. The discrepancy cannot be due to foreign currency exchange because we have parity. It cannot be market forces at work because the spread is too great. Where can we examine this inequity further?
Ms. Mithani: You would need to contact the Canadian Animal Health Institute because they determine the pricing of commodity drugs.
Senator Gustafson: My question is on genetically modified grains. The grain business has its internal politics; no question about that. Genetically modified grains are on the market and companies like Monsanto want the product moved ahead fast. At the same time, we have organic food and grains. Do your scientists deal with genetically modified grains, because more than consumers' health has to be considered? Every day, we read in the newspapers that the world is short of food. I believe that we will have to embrace some of these genetically modified grains in an effort to produce greater yields. I would like your comments on that.
Mr. Mayers: Both the Canadian Food Inspection Agency and Health Canada have roles in respect of the market entry of new plant varieties. The responsibility of the CFIA is a focus on both the use of such products as livestock feeds and the seeds in terms of their market entry. The focus for Health Canada is the human safety of foods derived from those products. Our approach to the pre-market authorization of these products is similar to the approach we spoke about regarding inputs in the example of livestock feed. We have regulatory authority to authorize the market entry of those products. We conduct safety assessments to provide assurance that the products are safe for human consumption, safe for animal consumption and safe for the Canadian environment.
Senator Gustafson: Some people indicate, rightly or wrongly, that if you use too many sprays that deal with genetically modified grains, eventually you will have soil that will not produce anything. Some hold to that doctrine, if you will. Do you have fears of that happening? We do not have genetically modified wheat. At least it is not public.
Mr. Mayers: We do not have authorized varieties of genetically modified wheat in Canada, although we have authorized varieties of other crops.
Senator Gustafson: How will we come to focus on this situation? Internal politics exist in the grain business. I am not talking about political parties but about those who have an interest in the production of grains.
Mr. Mayers: Perhaps it would be useful if Mr. Chancey gave a brief overview of our program.
Mr. Chancey: I can speak to your point, senator, which is certainly valid. I have worked with producers, handlers and some consumers in the grain industry, in particular over the last five years. I will speak of a well-publicized case where one of the technology providers submitted for regulatory consideration a genetically altered wheat variety in Canada and in the U.S. Ultimately, it was not the safety of the product that was the determining factor; the company withdrew its submission in light of market resistance. By that I mean concerns in Canada and the United States that export markets would be lost because of the inability at the time of the system to provide assurances to those markets that the product of concern would be segregated.
At that time, it was a very polarized discussion, as you will recall. What I notice now is a completely different approach. The protagonists are actively collaborating, but they are doing it in a very responsible way. New products that are well-known could be introduced and would very likely gain approvals for the safety of the product.
It is also recognized that before those new products are introduced, particularly in crops — wheat is one, but any grain where there is not currently a genetically altered variety in commercialization — they must resolve international approvals and acceptance issues. That is really the limiting factor right now.
I think the Canadian industry, our colleagues at Agriculture and Agri-Food Canada in the research branch, the Canadian Grain Commission and our own scientists are aware of new plant health threats. In particular, a very virulent threat present in Africa is black stem rust. The assumption is that sooner or later that particular pest will arrive in North America. The view is that the only expeditious way to protect our resource base is to develop these new resistant varieties using modern biotechnology. Again, I think the increasing reality of those threats — which are not limited to North America — will probably be the determining factor.
Senator Gustafson: It is interesting that, five years ago, Canada was faced with losing all our sales on canola because it was genetically modified. Europe, Asia and so on would not buy any. That has all evaporated, it seems.
I have one other question. The problem with organic will be to keep it separate in the grain movement, unless that could be handled by containers or some other way. I see that as a big challenge.
Mr. Mayers: The value addition in organic, because there is a price premium, has resulted in segregation systems for products of organic agriculture in order to maintain that price premium throughout their production and distribution chain.
The Chair: Thank you, honourable senators and witnesses here tonight. This has been an extremely interesting discussion and it takes us back to all sorts of patterns that we were on in the past.
If you ever run into your friend, George Luterbach, give him our best. He did a great job with the Canadian Food Inspection Agency during the so-called mad cow crisis. He is not forgotten.
We thank you for taking the time to come here. It is a tough issue, a difficult one to understand. You have done well tonight and we appreciate it.
The committee adjourned.