Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 13 - Evidence - Meeting of March 15, 2012
OTTAWA, Thursday, March 15, 2012
The Standing Senate Committee on Agriculture and Forestry met this day at 8:31 a.m. to examine and report on research and innovation efforts in the agricultural sector (topic: innovation in the agriculture sector from the perspective of food and beverage processing firms); and for the consideration of a draft budget.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Good morning. Today we have appearing before us Carla Ventin, Vice President, Federal Government Affairs from Food & Consumer Products of Canada.
Thank you for accepting our invitation to share with the Standing Senate Committee on Agriculture and Forestry your expertise, comments and recommendations.
Honourable senators, I would ask you to introduce yourselves and then we will ask the witness to make her presentation to be followed by a question session.
Senator Mercer: I am Senator Terry Mercer from Nova Scotia.
Senator Merchant: I am Pana Merchant from Saskatchewan.
[Translation]
Senator Nolin: I am Pierre Claude Nolin from Quebec.
[English]
Senator Plett: I am Don Plett from Manitoba.
Senator Buth: I am JoAnne Buth from Manitoba.
[Translation]
Senator Maltais: Ghislain Maltais, Quebec.
[English]
Senator Eaton: I am Nicole Eaton from Ontario.
The Chair: Thank you, honourable senators.
The mandate of this committee is to look at developing new markets domestically and internationally, to enhance agricultural sustainability and also to ensure ourselves of the improvement of the diversity of food security.
Today we are focusing on understanding how to support innovation with regulations, information and science from the perspective of the food and beverage processing firms.
Carla Ventin, Vice President, Federal Government Affairs, Food & Consumer Products of Canada: Thank you. Food & Consumer Products of Canada welcomes the opportunity to contribute to the study of the Standing Senate Committee on Agriculture and Forestry on innovation in the agri-food sector. Our industry association is the voice of Canada's leading food, beverage and consumer product companies. You will have before you a list of the logos of our member companies. That will give you a good understanding of the member companies that we represent on the food, beverage and consumer product side.
From an employment perspective, our industry provides high-paying jobs to approximately 300,000 Canadians in rural and urban areas in every region of the country. We are in fact the largest employer in manufacturing in Canada. We are larger than the forestry and automotive sectors. Our members represent about 80 per cent of products sold on grocery store shelves in Canada.
The Canadian food processing industry is a key component of the value chain. We depend on Canadian farmers across the country to grow crops for our 6,000 processing facilities located across the country. Likewise, Canadian farmers depend on us to purchase the crops that they grow. We work together to ensure safe and sustainable food production in Canada. FCPC member companies are committed to government policies and programs that contribute to a competitive, profitable and sustainable agri-food industry in Canada.
My presentation discusses industry innovation in the manufacturing and development of new products and, in addition, I will discuss the role that government can play in supporting efforts for modernizing Canada's food regulations.
Our industry understands the importance of manufacturing food in an environmentally responsible way to ensure the sustainability of the entire value chain. Enormous investments have been made by our member companies to make their manufacturing processes more environmentally sustainable. We recently conducted a survey with our member companies to identify their environmental policies in order to showcase our industry's collective achievements in environmental sustainability. Through the survey we found that a majority of our members have environmental sustainable strategies in place focused on waste reduction, sustainable packaging, water and energy conservation, and greenhouse gas emission reduction.
Our industry has made great strides in the development of new products in response to consumer demand. Product innovation in the food industry is the only way to remain relevant to consumers and to continue growing our business. Consumer preferences guide the direction of innovation in the food sector. Consumers are increasingly interested in a wide selection of healthier food and niche products as they become more proactive in managing their health through diet. In response, our industry has invested in the reformulation and development of new products.
A recent FCPC survey with our member companies revealed that 92 per cent of our member companies have launched or reformulated products to make them healthier. For example, we have reduced sodium and transfat in many of our products and we continue efforts in this area. Consumers are also increasingly demanding products with health attributes. Functional foods have an added component that enhances the nutritional value of food. An example of functional food is calcium enriched fruit juice in which the calcium is not naturally present, but is added.
The global functional food market is growing at a rate that is outpacing the traditional processed food market and the Canadian functional food industry has a potential to grow US$50 billion. Innovation in functional foods represents an enormous opportunity and is the future of the Canadian food industry.
Food processors in Canada, however, are discouraged from bringing new value-added healthier food products to market. That is because current food regulations in Canada are outdated and unable to accommodate the new innovative products demanded by consumers.
Government support for innovation: It is our view that the most important way that the government can support innovation in our industry is to rapidly modernize Canada's food regulations. Our food regulatory framework to provide some context has not been updated since the 1950s. It is time.
Health Canada's regulatory system that governs food additives, health claims, infant formula and novel foods is outdated and lacks transparency, timeliness and accountability. Food regulations in Canada have not kept pace with changing technologies in the development of new products. While our members develop innovative products that consumers demands for introduction to the Canadian marketplace, they are not being approved by regulators in a timely manner. Canada's outdated food regulations have a negative impact on the choice of Canadians. Consumers in Canada are denied access to a variety of innovative and healthier-for-you foods available in other modern industrialized countries.
From a business perspective, our member companies increasingly question future investments and manufacturing mandates in Canada because registering a product with Health Canada takes, on average, five years longer, for example, than in the U.S.
There is also an impact on farmers. Without a Canadian food processing industry to buy the food that Canadian farmers grow, farmers need to find markets that are farther away. In addition, food processors also contribute to the quality of rural life enjoyed by farmers and their families, as many processing facilities are located outside of major cities. We need both farmers and food processors to achieve food security in Canada. Food security depends on food that is both grown and processed in this country.
Despite numerous efforts to fix the system, regulatory delays persist. For example, food additives: Calcium lactate, which is a firming agent, can be added to canned peas. If you want to add calcium lactate to canned beans, you require a regulatory amendment. Regulatory amendments in Canada are very lengthy and require cabinet approval. The average time to obtain regulatory approval for a food additive is three years, but there are applications currently in the system that has been in the queue for 10 years. We do not think it is necessary for cabinet to approve the addition of calcium lactate in beans.
We are pleased with the work currently under way in Health Canada under the leadership of Assistant Deputy Minister Paul Glover and Director General of the Food Directorate, Samuel Godefroy. We are aware that past modernization efforts in Health Canada have failed to deliver. This time around, we need political will to obtain meaningful and lasting results. We therefore encourage all committee members here today to support Health Canada's efforts to modernize food regulations.
In addition to modernizing Canada's food regulations, another way the government can support our industry is by ensuring the continuation of the Scientific Research and Experimental Development Program, otherwise known as SR&ED. while we agree that the program can be improved, we hope that the government's announced overhaul of SR&ED will not affect its continuation.
I hope this presentation has provided a sense of how our industry is stepping up to the plate in terms of innovation. In summary, the most important way that the government can support our innovation efforts is to prioritize the modernization of Canada's food regulation.
Senator Mercer: I was impressed by the list of companies that are members of your association. Not all of them, of course, are in the food business, as we note. The example that you gave of calcium lactate in beans is a good one but probably not the only one. My understanding is that as we have tried to modernize this in the past, we have been bogged down in bureaucrat problems of Health Canada dealing with other branches of government, whether it is Agriculture and Agri-Food Canada or the Canadian Food Inspection Agency. Pardon the pun: Everybody has a little piece of the pie but no one is in charge of the recipe.
With which agency and/or department do you and your association think that the responsibility should lie ultimately, hopefully when we fix the system?
Ms. Ventin: Thank you for your question. The food industry is very interesting. As I mentioned, we are the number one employer in manufacturing in Canada. We are housed with Agriculture and Agri-food Canada and our regulations lie with Health Canada. The CFIA enforces our regulations and does the inspections. Yet, going back to our economic footprint in Canada, we deal with Industry Canada, which makes it four agencies and/or departments. Not only are we the number one employer of manufacturing in this country, but also we have the potential to continue to be the number one employer and to grow, given Canada's fresh water, land and technical expertise; that is where we are. I call it ping-pong politics. I visit all four and one says go there and the others say go there and go there and go there.
If we were to be housed in one place, we would need to have an economic lens looking at our industry. Industry Canada, to us, makes the most sense where we would be housed because of our economic footprint. This is no disrespect to Agriculture and Agri-Food Canada but the policies within that department tend to be more focused on the farmers. We understand that and work closely with the farmers and they work closely with us. We work together to ensure a profitable and sustainable food system in this country. We need an economic lens for our industry. Thank you for identifying that too many departments are involved in our industry, but not one, as you say, holds the recipe.
Senator Mercer: You said that it takes five years longer to register a product here than it takes in the U.S. What is the process in the U.S.? If one of your companies operating in the United States wanted to get approval to put calcium lactate in beans, how long would it take and where would they go?
Ms. Ventin: They would determine whether calcium lactate is a safe agent, and it is, so it can be put in all the food you want. In Canada, it is very prescriptive, so we need permission each time we want to put it in any canned vegetables. In order to get permission, we need to go through cabinet. They have a system in the United States called, Generally Recognized as Safe, GRAS. They determine if the additive is safe and, if so, the food industry can add it to various products as they see fit.
Senator Mercer: It does not seem that complicated to me, but of course government gets hold of it and complicates the hell out of it.
Senator Buth: It is clearly an incredibly large and important industry in Canada. You made the comment that there are 6,000 processing facilities in Canada. We often hear about the loss of processing facilities, especially in the food industry, to other countries.
Can you comment on where we were at five years ago, or do you have numbers on what is happening in terms of processing in Canada? What are the risks of losing more of that component of your industry?
Ms. Ventin: Yes, we do have 6,000 processing facilities in every region of the country, and there have been closures. We are seeing that.
In the small town where I come from in Southwestern Ontario, for example, in the centre of the town is a processing facility for canned vegetables. We come from a very rich and warm agricultural area, so it made sense that the farmers lived close by and they would send their products to the canning facility, which paid high wages and was appreciated in the town. Ever since I can remember, that processing facility has been abandoned. That is an interesting example.
There have been closures. I do not have specific statistics on the where they have taken place, but the fact remains that we are the number one employer in manufacturing in Canada and we remain so. Also, we are in an industry in which everybody needs to eat, so that helps.
In addition, we have the potential to grow in this country, as I mentioned. As a result of the fresh water, the land and the resources, we have great potential, and we should be a global superpower in the production of food. I am talking about across the entire value chain, for everyone to benefit, from farmers to processors and exporters. I see the potential.
However, going back to your question, we do not have specific statistics on how much has been lost. We do hear of specific examples when we find out about plant closures and relocations, which take place when a few of the older facilities close but a brand-new facility opens in a neighbouring region or town.
Senator Buth: With the potential to grow the industry, I would assume we would be looking at more exports. Are there export issues that your industry faces?
Ms. Ventin: Specifically with respect to export issues, we agree with the government's focus right now on trade, and we are very supportive of that. We want market access all over the world, whether it is with the Canada-EU trade negotiations or in Latin America or the TPP in the Trans-Pacific region. I do not have any specific export issues that I can think of right now, but we want an open competitive market and market access.
Senator Buth: Clearly, though, your number one issue is Health Canada modernization?
Ms. Ventin: Yes, it is our number one issue because do not forget, business is business. When we have companies here that may be headquartered in other areas, they have to fight for manufacturing mandates in this country. It is very hard to do when discussing business details, whether it is a small- or medium-sized enterprise, to invest millions of dollars in a product and wonder how long it will take to get the product registered with Health Canada. You cannot give the answer of three to ten years; that is a crazy. You cannot launch a product. What would be the point, then, of investing in innovation and new products if you cannot provide a reasonable time frame of when that product can be registered with Health Canada?
Just to be clear here, we are not talking about products that have been declared unsafe in other countries. We are talking about products that have been registered and approved and are completely safe in other modern, industrialized countries.
Senator Merchant: Thank you very much for being here this morning.
A couple years ago, Maple Leaf Foods had a problem with their processed meats; I think 29 people died and over 5,000 people became ill. About a year later, I believe Siena Foods had a similar problem. No one died at that time, but the company has gone bankrupt since then. A couple of months ago, I think there was an issue again with Maple Leaf Foods — maybe you can refresh my memory — where there was a certain dangerous additive in more expensive specialty meats. Mothers were concerned because they were buying these foods thinking they were somehow better and Maple Leaf said they were not adding this particular additive, but it turned out they were.
You have spoken about food security, and I want to know how the proposals you are making before us today are going to help in these types of situations. How are you involved in these situations?
Ms. Ventin: First, with respect to food safety, I was actually at the Standing Committee on Agriculture yesterday evening in which CFIA was there and spoke specifically on food safety issues.
We are involved very closely on food safety issues. It is a shared responsibility with the federal and provincial levels as well as industry. We take this very seriously. We are very proud that Canada has some of the safest food in the world.
I do not have details on the specific additive you mentioned, nor do I have the scientific background to discuss that in any detail, but I can tell you that if there are additives that have been approved in Canada, they are approved because they are safe and there is no question about it. We have a lot of confidence in that, and I think CFIA does a great job with that.
Concerning your second point on food security, yes, it is an important issue. Much of the focus is on farmers and how we need to grow our food in Canada, yes. However, we need to grow our food in Canada, but do not forget that we do not want to necessarily send it abroad to get it processed; we would like to keep the food grown and processed in Canada along the whole value chain. I am always trying to insert that the food processors have an important role to play in this. We have discussed this on several occasions with the farm groups, with whom we are very close.
We have been involved in several initiatives concerning what has been termed the National Food Strategy. We participated in the Canadian Federation of Agriculture's efforts in this area. We were on the steering committee, and last summer I presented to the federal and provincial territorial Ministers of Agriculture specifically on our role as food processors. That is the first initiative we have participated in, the Canadian Federation of Agriculture.
The second is CAPI, the Canadian Agri-Food Policy Institute. We are very closely involved with this organization as well and in their efforts in moving toward and developing a national food strategy and achieving food security in this country. In addition, the Conference Board of Canada has done several research papers and is also moving towards a concept.
From our perspective, there are a lot of ideas out there on how to achieve food security in this country. We welcome all of these ideas and like to be involved in them, but do not forget about the processors. We absolutely understand that the farmers have to be there, and we also understand the food processors have to be there. We want to get that message across, but we work closely with all of these groups.
Senator Merchant: Another thing you mentioned is environmentally friendly packaging. There is a cost to everything we do. I always say that there are many roads in this country, and if we were to twin a highway, we would save lives. Then we make a decision based on costs.
When you speak about environmentally friendly packaging, for instance, have you given thought to what the costs would be? What does that do for competition? When I go to the supermarket, I frequently look at the price of things, but I do not too often look at the fine print or what the packaging says.
How receptive are companies? Everything, of course, as I say, depends on cost. How do you get the companies to buy into your ideas? How do you get the consumer to buy their products in order to stay competitive?
Ms. Ventin: Like I said, consumers are driving this and industry wants to do the right thing. Our industry is absolutely reducing packaging. Increasingly, I think you are seeing consumers in grocery stores looking at packaging. There is smaller packaging and efforts towards that. I personally look at packaging and whether it is reduced rather than something larger and bulky.
I think consumers are looking at that and that is an issue. The consumers are the ones driving this. Our industry always has to keep up with what the consumers want, whether it is the taste of food or the environmentally sustainable approach they are taking.
As per specific cost, I do not have those details and we do not discuss the different pricing strategies amongst our members on whether they do that. However, I think it is the way of the future, and our industry understands that, and that is why they are making great developments in that area.
Senator Eaton: Thank you very much for your presentation. At our last meeting we talked about free trade and trade and exports, which is part of the mandate of this study. Are there any non-tariff barriers to our processed food?
Ms. Ventin: Are there specific trade agreements you are asking about?
Senator Eaton: I can ask a more general question. Should we reach an agreement with the EU on free trade, should we reach an agreement with Korea — the Prime Minister is going there next week — we are opening free trade talks with Japan and China is interested, is this a opportunity for food for your base?
Ms. Ventin: Absolutely. This goes back to the regulations. If you are allowed to have a wider selection of food additives in different countries than you are in Canada, it affects the way we work.
Senator Eaton: Does the EU have a wider selection of additives?
Ms. Ventin: I cannot give you specifics on that; I do not know. I know with the Canada-EU free trade agreement we are pushing for open market access.
Senator Eaton: You do not know whether there will be non-tariff barriers, though?
Ms. Ventin: I am not involved in that in any detail to that extent.
Senator Eaton: Would you not have to be eventually? If we get free trade with the EU, your companies will have to know whether they are behind the curve or ahead of it or what they are allowed to ship or not allowed to ship, correct?
Ms. Ventin: Absolutely. There are many details, and it would depend on product by product, category by category and really getting into the weeds.
What we see with the member companies that I have engaged on the Canada-EU trade agreement, for example, is that they have by-passed the idea of trade and have decided in the past, because of trade barriers and many trade barriers, to set up the facility in the EU. They would work with the local farmers there and have their processing facility there, and they would then register their product there and sell it to the consumers there. They would not rely on the trade relationship quite as much. That is some of the feedback I have received from some of our member companies.
Senator Eaton: You do not foresee, as you have not done the data or there has been no need to collect data, whether it will be an advantage or not to your group to export to Japan or to Korea?
Ms. Ventin: There is definitely interest there with our member companies. Exporting is an important growth area for our member companies, but no, we have not collected specific data per member company or gotten into that detail. We continually push for market access in countries all over the world, which is a lengthy process. I know the trade negotiations, and I think once those doors are open you will see increasingly our members developing new markets in those areas, if they have not already. It will facilitate it.
Senator Eaton: It is none of my business, but would it not be useful — if we are entering into negotiations with those countries and we hope to sign with the EU quickly, the Prime Minister is hoping that Korea will sign on quickly — to start collecting the data now so you would be ready at the onset?
Ms. Ventin: We have collected member feedback and we have submitted that to Agriculture and Agri-Food Canada. We are regularly in consultation and briefing calls with the government on this and pass this information on to our member companies, and that is the role we have been doing.
Senator Eaton: Does your organization work with the universities at all? Do you have a relationship with universities like Guelph or do you just leave that to your independent companies?
Ms. Ventin: We do not have any formal working relationships with universities, but we will seek their advice or collaborate with them as necessary.
Senator Eaton: In terms of innovation, have you set out priorities? Would you have five priorities? If you have to lobby Health Canada — and Deputy Minister Glover has been a witness often on this committee — what would your five or three priorities be?
Ms. Ventin: With Health Canada?
Senator Eaton: Yes.
Ms. Ventin: Specifically to modernize Canada's food regulations.
Senator Eaton: Are there specific things? Is it more things like more vitamin D in milk, and so on? Could you give us examples is what I am trying to say.
Ms. Ventin: Sure, and we have been in close contact with Mr. Glover as well. He met with our board of directors on February 27, and previous to that we had a meeting again with him in Ottawa. He is well aware of our issues and understands them. Specifically within the regulations that are a real problem for us are food additives, health claims, infant formula, novel foods, and fortification, as well as what you were referring to, being able to add specific vitamins and minerals to food products.
Senator Eaton: Thank you very much.
Senator Mahovlich: When this calcium lactate is applied to beans, will the consumer have a choice or will they just push it on to them? Will these beans be labelled? Do you label your additives to products?
Ms. Ventin: Sure.
Senator Mahovlich: Certain people are set in their old ways, you know. They do not want to change, and they should have a choice I believe.
Ms. Ventin: From what I understand, and I do not have the scientific expertise, calcium lactate is just a firming agent. It would make the product essentially more firm.
Senator Mahovlich: I like it crisp, yes.
Ms. Ventin: I think the idea behind it is to be able to add it to certain vegetables in cans so that the vegetables are more firm and do not look like they have been cooked on your kitchen stove for four hours. From my non-scientific expertise, I think that is it.
These types of food additives are extremely safe and would never be approved in Canada if they were not, nor would they be used by our member companies, who have extremely good reputations. They do those things because these technologies are great and make our products better in the sense that they discuss these things with consumers. I think probably what they discussed was that people like their vegetables to look more like fresh vegetables, and so perhaps this calcium lactate can help with that.
Having a choice, maybe there are member companies that would choose to use this and member companies that will not. Whether they are actually labelled or not, I do not know whether that would be specifically on the label, but I understand it probably should be.
Senator Mahovlich: Thank you. I notice that a lot of these corporations you sponsor here are American. I bought Post Bran Flakes for years, and my children did as well. All of a sudden they are off the shelves. I have to go to Buffalo to buy my Post Bran Flakes. Can you explain that?
Ms. Ventin: Sure. There are a few things. You have the member company logos in front of you. Yes, there are a number of companies that you would recognize that are based not just in Canada but all over the world. There are some other logos that you might not recognize because we represent small- and medium-sized companies as well, which is important. You might not recognize their brand but you would recognize their product. For example, one of our companies supplies the coffee for Tim Horton's or the dessert for McDonalds. We represent both large and small, which is important, both multinational and Canadian owned. As for specific products, that is interesting. It is not fun when you realize that your favourite product is no longer on the shelf.
Senator Mahovlich: It is not available here in Canada. Did they have an argument?
Ms. Ventin: I do not know the specifics of that. What I specifically do know is that perhaps there was not a large uptake here in Canada. I do not know the specific example but I understand that it is not fun when you realize that your favourite product is no longer available.
[Translation]
Senator Maltais: In your brief, you are going back almost 40 or 50 years, saying that consumers have changed. It has actually been 40 years since we used to get Campbell tomato soup ads, during Hockey Night, between two of Frank Mahovlich's goals. Today, between two of Steve Stamkos's goals, we no longer get food products. Consumers are now universal, on the lookout for new products. Their criteria are known. They want good-quality products. They want healthy products, whose packaging is supposed to be greener than 40 or 50 years ago. Those are the basic criteria.
Unfortunately, distributors have not followed suit. I can tell you that I conducted my own humble test. In supermarkets, they no longer give bags; they sell them so that we can carry our products. So I kept the packaging from what I bought at IGA and I took it back the following week. They did not take it, saying that the packaging belonged to me, and they never wanted to take it back.
Consumers are caught in the crossfire. Think of shelves in supermarkets; all the products have little logos saying that they are green, good and amazing for your health. How do you expect consumers to make sense of it all?
First off, in the leaflet that you gave us, we see that Heenan Blaikie, a well-known law firm, is interested in peas, which I did not know. How do you expect consumers to make sense of that?
You are representing food companies. You are looking for innovation and fast approvals for new products. Last week, the committee went to see the research centres that companies often contact for new technologies and new food products. No one mentioned delays. I understand that there are some. Getting approval is a real hassle. It is up to the government to try to reduce the time it takes.
How can consumers, who are not aware of this mess or of your problems, be assured that your products meet these three basic requirements: good quality, healthy and green?
[English]
Ms. Ventin: You are focused on consumers and so are we. We know that consumers, over the last decade, are very resourceful. They seek out this information. They go to the Internet. You will recognize a lot of our member companies' logos. They have well respected and established brands in Canada and around the world. They work very hard. That is important. You recognize a brand and you trust it as safe. You trust the packaging as well to say that; and it is regulated. If they are communicating specific information, such as reduced sodium or reduced packaging or that sort of thing, it is on the label and on the packaging.
We have been focused on consumers as well. One thing that we have worked on over the last couple of years specifically with Health Canada is to give consumers more tools to understand our products. It is called the Nutrition Facts Education Campaign. We studied with Health Canada and found that consumers do not understand the per cent daily value portion of the nutrition facts table. The nutrition facts table is government regulated and required on every food product in Canada. We invested a lot of money and worked with Health Canada collaboratively with our member companies to promote awareness and education with consumers. This has been a great initiative; and we are already on phase 2. It is a multimedia effort to provide consumers with the tools to better understand what they are eating.
[Translation]
Senator Maltais: Given that your industry feeds consumers, if the government decided to improve or reduce red tape or the number of people involved in approvals, would you agree to have the food products that you put on the market inspected in order to prevent products from being recalled every month?
Someone mentioned ham. The Hi-Grade sausage also comes to mind. Once the recipe was out, they immediately took it off the market. So do consumers have the assurance that your products are good?
[English]
Ms. Ventin: On your last point, absolutely, consumers have the assurance that our products are good, safe and of high quality.
We are not discussing getting rid of approvals. We are talking about is streamlining them so they make sense. We are asking for basic and reasonable things. We want approvals to be accountable, timely and transparent. That is a fair request on behalf of our industry to the federal government.
In terms of food safety, Canadians can be assured that the products are safe. We have a lot of confidence in the food safety system in Canada. As I said, it is a joint responsibility. It only takes one food safety incident — the stakes are so high that they do not want to take risks, and they should not take risks. It is good for all of us that they do not take risks.
[Translation]
Senator Maltais: You are right. Thank you.
Senator Nolin: Madam, thank you for accepting our invitation. In terms of product approval, if you look at products as Canadian products versus non-Canadian products, is there a difference?
[English]
Ms. Ventin: One product in Canada, for example, can cross the border many times. It is difficult to determine what a "Canadian product" is. Is it a product that is grown here, processed here, packaged here, or sold here? Is there a difference? I would say, no, because each of our member companies has strict quality control measures in place to ensure that wherever they source their ingredients, in Canada or abroad, they adhere to strict food safety regulations. That is really important. I would say there is no difference in the quality of products, whether they are "Canadian," even though I do not know necessarily what that means, or from somewhere else.
[Translation]
Senator Nolin: In terms of American products, we were talking about cereal earlier. For a product that is accepted in the United States to be marketed in Canada, is the process faster, slower or the same compared to our process? If a product comes from abroad, does it have to go through the whole regulatory process to end up on the shelves of Canadian stores?
[English]
Ms. Ventin: Yes. Let us think about the U.S. here. One of our big issues is that there are products sold in the U.S. and, if we want to have them sold in Canada, we have to go through the whole registration system here. Some products are not allowed to be sold in Canada because of the food additive, as in the U.S. The government put forth a good opportunity in the form of the Regulatory Cooperation Council, which is key for our industry to let us rely on each other's science, and international science more. If calcium lactate is safe, for example, let it be safe here. We have to go through our due diligence, and we understand that. Our number one priority is food safety, and we would never compromise that. However, there are ways in which we do not need to recreate the wheel. It is important that we rely on the international science taking place around the world in modern industrialized countries.
[Translation]
Senator Nolin: Given the financial importance of investments in innovation, as you have so well explained in your remarks, your members invest in innovation because Canadians are demanding new products. In those studies, have Canadians demonstrated a preference for so-called Canadian products? If so, what type of strategy are your members using to provide Canadians with products labelled made in Canada?
[English]
Ms. Ventin: Agriculture and Agri-Food Canada has done pilot projects across the country called Canada Brand. They have done them in three grocery stores across the country, East Coast, West Coast and Central Canada. There is a Canadian maple leaf and says that the product is grown and/or processed in Canada. Their studies have shown that Canadians do want to support local farmers and local food processors.
Senator Nolin: "Local" being Canadian.
Ms. Ventin: Yes, local being Canadian.
Using a Canadian maple leaf in this brand has been used extensively in export markets and works well. The world recognizes that if it has a maple leaf, it is Canadian and high quality. As I said, the recent pilot projects that Agriculture and Agri-Food Canada has undertaken have also demonstrated that Canadians want to support Canadian-grown and Canadian-processed food.
Whether our specific member companies will use the brand and the branding guidelines developed by the government will be up to the individual member company. Labeling and packaging can be costly. For example, if a company relies on the tomatoes down the street but one year it does not have a great season and they have to import some tomatoes, they have to change their labels, which can be difficult to do quickly, to say that the tomatoes that year are not Canadian. You have to either change the labels or segregate within the processing facility. It can become complicated for our member companies, but it is a company's individual decision on how to market its product according to government guidelines.
[Translation]
Senator Nolin: So your members are interested, but they have to see if it is in their interest to do so, given the costs involved.
What happens now with a product that was grown and processed in Canada, but that cannot be identified as a Canadian product? What are the challenges for your members? Do you see what I am getting at?
[English]
Ms. Ventin: I think I understand. You are asking about products that are both grown and processed in Canada.
Senator Nolin: Some products are Canadian but because you add sugar or salt or more than 1.5 per cent non- Canadian product, they are no longer Canadian products. What is the comment from your association on that?
Ms. Ventin: That is frustrating for our member companies.
Senator Nolin: To what extent? Are you losing money?
Ms. Ventin: I have received some feedback over the last few years. Food processors find it difficult to keep up with this or that label. Although we understand the government is trying to help by providing these labels to us "product of Canada," et cetera, as you mentioned the sugar and salt, it is frustrating. Right now the food processors have to develop a bit more confidence in government branding strategies that are available in order for them to actually start to use them consistently and broadly.
Senator Nolin: To a certain extent, a product can be almost Canadian but because of our regulations cannot be labeled "made in Canada" for sale in Canada but can be exported as a Canadian product.
Ms. Ventin: Yes. That is absolutely right. That is very confusing.
The Chair: Thank you, Senator Nolin.
Senator Plett: I was hoping that by now I would have a complete understanding of what your organization does, but I do not, I am sorry.
I know that you advocate on behalf of Food & Consumer Products of Canada. You shared with us, in response to Senator Mercer's question about how many levels of bureaucracy you have to go through, and you told us there are four. He asked a question about what goes on in the United States and you said, "They do this," meaning the United States.
Your company being what it is, if companies like McCain's, Maple Leaf Foods, Kellogg's or others want permission to put additives in their foods, I assume they have to go through your organization. I guess that McCain's would say there are five levels of bureaucracy because they have to go through you as well. Not wanting to do away with your organization at all, would McCain's be better off going directly to Health Canada versus going to you? Would that circumvent one level of bureaucracy for them?
I would like you to explain to me exactly what your organization does. Maybe you did it in your opening comments.
I am sorry if I did not catch on to that. I would like it explained. You made mention in your opening presentation about farmers having to go abroad and go away too far to be able to sell their products. Yet, we hear over and over and over again how we want to export, and that trade is a thing of the future. I am not sure whether you are disagreeing with that or not.
In summary, I would also like to know — and would appreciate if you could send us information through the clerk on what Senator Buth asked — how many manufacturing facilities have closed and have opened in the last five years.
You shared with us that the one in your town had closed, but some simply relocate because you said they needed more modern facilities. I think that is positive. I do not think it is negative if they relocate because they need better facilities. That is a good thing. Your concern was the slowness of Health Canada giving approval of products. The wheels of government unfortunately always turn far too slowly for all of us, but it does give me a level of comfort because I know they are doing their due diligence. It goes through their levels of government and their research. We do not just have an organization out there that can get the additives put through quickly and you did not seem to have a handle on what the additives did. I would like someone in charge to know exactly what these additives do and if that takes three years, God bless them. I hope they take three years. I do not want my beans to have something in them which I am not comfortable with, either. Other than having the process become faster, tell us how we can speed up the process and where is it being bogged down?
Ms. Ventin: We are an industry association. The member company logos in front of you are our member companies, so they join our industry association. For example McCain does not have to go through us to do regulations. We are not a regulator. However, companies like McCain and all the others on the list — through a formal governance structure — would put forth their priorities over a three-year period. They would say, "FCPC, you, industry association, can you help communicate these issues to government and can you help fix these concerns?" That is what we do. We help them. We are not another layer of government. We help facilitate because McCain and all the other companies are busy running their businesses and it is pretty complicated dealing with the media, other policies issues and the federal and provincial governments across the country. We are an industry association. That is the first thing.
The second thing is that yes, we absolutely do support exports and open market access on a global level. We would provide value to a product. Whether it is buying the tomatoes and making ketchup or buying potatoes and making french fries, it is the value-added component. The value-added component provides high quality jobs in this country, high paying jobs in this country, and employs more Canadians than any other manufacturing sector in this country. It is a very important part of the value chain.
We do not have specific statistics on how many facilities have opened and closed. I will take a look and try to find some. To clarify, no, in my town, it was just an example of how the industry has changed. In my town they did not close because of a modern facility nearby. I said here were farmers nearby who grew vegetables and fruit and sent it to the processing facility, and it closed down. There are food processing closures across the country, which has happened over the last several decades. You can say it is cyclical or that there are problems with why were they not able to add value to food and employ Canadians in high-paying jobs.
Senator Plett: Would it have anything to do at all with the fact that your jobs are the highest paying — or among the highest paying jobs — in the industry that we are having food processed more economically, whether it be out of the country or whatever the case may be? Would that be part of it?
Ms. Ventin: Actually, we have the reverse problem. We need highly skilled Canadians to work in food processing facilities and we have a lot of difficulty getting Canadians with those skills to work in our facilities. In general, manufacturing jobs are value-added jobs which pay above the Canadian average. They are highly technical and require a lot of expertise.
To your fourth point on Health Canada and the regulations, we are not asking for anything except a very reasonable request. The request is to have transparent, accountable and predictable regulations in place. We are not asking to bypass the system. We are not asking for food safety to be number two. We are asking for due diligence to occur in a timely manner.
Senator Plett: What is that?
Ms. Ventin: A timely manner for food additives, for example, would not be 10 years.
Senator Plett: What would be it be, one or two years?
Ms. Ventin: I know Health Canada is working on service delivery standards, so they would have a range maybe from a year to three years, or a year to two years. I am not sure. They are not meeting those time lines. Going to a specific example, like a food additive that is declared safe, there is nothing that we would put in the food that has not been declared safe and absolutely safe with no question. Those member companies listed on that sheet have developed a solid reputation for Canada in the world. They would never add things into their food that have not been properly regulated and thoroughly reviewed by both government and industry.
Senator Plett: Why do we have recalls then?
Ms. Ventin: Recalls would relate to reasons that occur throughout the whole value chain, whether it is the growing side of things, through the processing side or the shelf life of certain foods.
The additives, or anything that Health Canada approves, is regulated, has been thoroughly studied and regulated safe. We are not asking to bypass that system. For food additives, I would say that cabinet should not be involved in the approval of a food additive. They do not have technical expertise or scientific background to look at that. Health Canada are the regulators and there are many scientists who have more than adequate knowledge to approve that without getting cabinet approval and it taking up to 10 years. That is a specific example of how the system could work better. That is a reasonable request and would benefit everyone in the value chain. We would have more innovative products on the shelves, consumers would have access to that and it would work generally better.
We are not asking for Health Canada to ever put food safety second or to bypass any of the specific due diligence that they do. We are asking for it to be done in a timely, predictable and accountable way.
Senator Plett: Thank you. If the clerk at least could follow up, I am really interested in the processing plants. Whether this organization can provide it or someone else, I think we should follow up on that.
The Chair: Honourable senators, Senator Mahovlich has a supplementary question.
Senator Mahovlich: I want to go back to something. If Health Canada found a problem, all you want to know is what that problem is, right? They should not take 10 years to find out the problem. They probably have the problem already, but you want to know why; what is the problem with this substance?
Ms. Ventin: This specific substance has been approved in canned peas, but in order to get it approved in canned beans, we require cabinet approval.
It would not have been approved in peas if it had not been declared safe. It is not a safety issue.
Senator Mahovlich: Health Canada says it safe; cabinet says it is not.
Ms. Ventin: No, no, no. Health Canada says it is safe; calcium lactate is safe.
Senator Mahovlich: And cabinet says —
Ms. Ventin: The issue is that the regulations are very prescriptive. It says, written: "Calcium lactate can be added to canned peas." Therefore we ask, "Can we add it to canned beans?" No, we need a regulatory amendment for that, which involves cabinet approval in Canada.
It has already been approved as safe. It is in canned peas, and I eat canned peas. It has already been approved safe. That is just an example of how the system is not responsive. It does not make sense for cabinet to approve the adding of calcium lactate to beans.
The Chair: We will have Health Canada here, and some of the questions will be redirected to representatives from Health Canada when they come.
Senator Merchant: You have advertising about certain adverse effects of, let us say, sodium in food. The intake of salt is an issue now that seems to be constantly warned against, and I imagine it is also costing the health system. There are other things that come into play.
How do we get that changed? Is it up to the processor to reduce the salt in their foods? I know you said certain foods are labelled "low sodium." Is that the choice of the processor because it sees a need in responding to consumer demands? Is Health Canada warning about the salt intake, too, or does that need regulation?
Ms. Ventin: We are working closely with Health Canada on the issue of sodium. There are three components here. The first is the reduction of sodium in food products. That is occurring. You choose your favourite product and go on the grocery store shelves and you will see a sodium-reduced version of that product, whether it is crackers, bacon, or whatever. Consumer choice is there. Do we need to do more work? Absolutely. We are working close with Health Canada and the minister's office on this. That is the reduction taking place now.
Specific labels of when you can say "sodium-reduced product" is regulated by CFIA. I do not know the specifics, but I believe it is something like "you cannot put reduced sodium unless it is 20 or 25 per cent reduced." That is number one.
Second, there is research taking place that you cannot take all sodium out of a product without compromising food safety. It is not that simple. Without a scientific background, I personally cannot take it out and expect this food will be healthy for my family. That is a research component.
Third, there is an absolute need for consumer education. People need to be able to choose, whether it is regarding sodium or other products. A marathon runner has different nutritional requirements versus someone who is elderly, someone suffering from heart disease, or a two-year-old child, and everyone needs to understand what is in their food.
That is why we collaborated closely with Health Canada on the nutrition facts education campaign. It allows consumers to better understand the nutrition facts table so that they understand it and can choose what products to buy.
To reiterate, it is really three components: The reductions taking place in our products with sodium, the research required that is under way, and consumer education that we are working on and will continue to work on with Health Canada. It is definitely an issue, and we are very consumed in sodium reduction now.
Senator Merchant: I am looking for a yes or no answer: Does the processor reduce salt or do they have to get the approval from Health Canada to reduce it?
Ms. Ventin: No, our member companies are reducing sodium in products. They are allowed to do it. Allow me to lay out a time frame for you. After the research is done to understand how much sodium will be reduced — because sodium is a preservative, as well — it takes an average of 18 months to reduce the sodium. I can almost guarantee you there is a sodium-reduced version of your favourite product on the grocery store shelf.
Senator Mahovlich: What about sugar? I did not realize this but ketchup is full of sugar. I saw that yesterday on TV.
Ms. Ventin: That's right. Consumers are constantly guiding the food industry on what they want, whether it is reduced sodium, fat or sugar. We are always changing, reformulating and trying to keep up with demand.
The Chair: Thank you for sharing your information and comments with us. We have a few other questions that we would like to send to you in writing, so you could response. You can also be assured that, when we do have the witnesses from Health Canada, we will link to what Senator Plett and Senator Mercer have called the process, and we will get back to you.
In view of that, since we do have a red tape reduction committee, I would probably invite you and your association to send a letter to the minister, directly linking in order to bring to his or the government's attention the concern on the length of time in this process.
Honourable senators, before we adjourn, I would like to take two minutes to permit the witness to leave. I would also accept a motion for a short in camera meeting to look at the budget of 2012-13, as per the regulations of our rules. It is so moved by Senator Mercer, seconded by Senator Plett, that we do have a short in camera meeting to accept the budget of 2012-13.
(The committee continued in camera.)
(The committee resumed in public.)
The Chair: Honourable senators we will now return to the public meeting.
Senator Plett: Okay. I will move that we adopt the budget, with the priority No. 1 being the two Canadian trips, priority No. 2 being Europe, and No. 3 being the trip to Mexico.
Senator Mercer: I will second that motion.
The Chair: Therefore, it is moved by Senator Plett, seconded by Senator Mercer, that the fact-finding trip for 2012- 13 for the Standing Senate Committee on Agriculture and Forestry be adopted and presented to the Senate chamber.
The total amount of the budget will be $505,658. This will be itemized by the following three columns: Professional services at $12,600; transport and communications in the amount of $478,988; and other expenses, unforeseen, at $14,070. That is a total of $505,658."
Senator Plett moved the motion, seconded by Senator Mercer. Is it adopted, honourable senators?
Hon. Senators: Agreed.
The Chair: Carried.
(The committee adjourned.)