Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 32 - Evidence - Meeting of April 18, 2013
OTTAWA, Thursday, April 18, 2013
The Standing Senate Committee on Agriculture and Forestry met this day at
8:02 a.m. to examine and report on research and innovation efforts in the
agricultural sector (topic: traceability).
Senator Percy Mockler (Chair) in the chair.
The Chair: Welcome you to this meeting of the Standing Senate
Committee on Agriculture and Forestry. My name is Percy Mockler, and I am a
senator for New Brunswick and chair of the committee. I would like to say on
behalf of the committee a sincere thank you to the witnesses for accepting
our invitation to share your vision and your professionalism with us. At
this time I would like to ask senators to introduce themselves, please.
Senator Mercer: I am Senator Terry Mercer from Nova Scotia.
Senator Tardif: I am Senator Claudette Tardif from Alberta.
Senator Merchant: Pana Merchant from Regina.
Senator Plett: Good morning. I am Don Plett from Manitoba.
Senator Buth: JoAnne Buth, from Manitoba.
Senator Maltais: Ghislain Maltais from Quebec.
Senator Dagenais: Senator Jean-Dagenais from Quebec.
Senator Rivard: Michel Rivard, The Laurentides, Quebec.
Senator Callbeck: Catherine Callbeck, Prince Edward Island.
The Chair: The committee is continuing its examination of research
and innovation efforts in the agricultural sector. The topic of today's
meeting is traceability.
We have two witnesses, Mr. James M. Laws, Executive Director of the
Canadian Meat Council; and Mr. Jeff Clark, Manager of PigTrace Canada,
Canadian Pork Council.
Thank you for accepting our invitation to appear. I am informed by the
clerk that Mr. Clark will make the first presentation, to be followed by Mr.
Laws. Questions will then be asked by senators.
The floor is yours, Mr. Clark.
Jeff Clark, Manager, PigTrace Canada, Canadian Pork Council: Thank
you for the opportunity to present to you this morning. I have prepared two
different pieces for you: One is a written submission and the other is a
series of slides. I will be referencing both as we go through.
I manage the PigTrace Canada program, which is the swine traceability
program designed and being built by the Canadian Pork Council. Our Canadian
Pork Council board of directors has targeted traceability as a priority for
the past 10 years. Through that time, we have gone through a series of
design phases, some pilot projects and a negotiation with Canadian Food
Inspection Agency on regulations.
It has been developed to provide protection, prosperity and peace of mind
to the Canadian pork industry by providing traceability tools that enhance
the ability to contain and eliminate potential issues affecting animal
health, food safety and human issues. First and foremost, the goal of swine
traceability is to mitigate foreign animal disease and ensure food safety.
We recognize there are certain market access, product attributes and
information that could be relayed using a traceability system. I look at
traceability as an information infrastructure.
We have traceability today; it is just not very good. It is paper-based.
It is phone calls and going to farms. It is very labour intensive. We do not
have a lot of people within animal health departments anymore, so we need to
make use of technology and information sharing.
Also, the structure of the industry in Canada is very diverse and there
are a lot of different ownership groups; it is not just one integrated
owner, like they have in Denmark, where it is very small, integrated and
easy to share information within the country. Canada is very diverse.
The big challenge is how to get all that information centralized so it is
quickly referenced. How do we get that information into a centralized system
in as quick a manner as possible so that we are avoiding unnecessary phone
calls and delays if there is an issue, whether it be food safety or foreign
From the industry perspective, timeliness mitigates financial losses. The
quicker a trace-back can happen, the quicker we can help the CFIA or a
provincial chief veterinary officer — whoever it might be — do their job to
help us, and the fewer financial losses the industry experiences, which
affects the rest of the Canadian economy. We view it as a Canadian public
As many of you know, the pork industry is heavily export dependent;
almost 70 per cent of our production is exported, either as live animal or
pork. I have some numbers here. The pork industry contributes $9.28 billion
annually to the Canadian economy. Again, improved response to crisis events
— and they can be many, including agro- terrorism — can minimize costly
market disruptions and financial losses, as I said.
PigTrace aims to offer improved financial sustainability by maintaining
or quickly regaining market access if something does happen. We recognize
there may be a market disruption. How long that market disruption will be
really depends on the quality of information we have and the response
efforts by our animal health and food safety officials. That is really the
target of what PigTrace is all about.
We do recognize some of the marketing parts of it, as I mentioned
earlier, such as source verification and product attributes. As I mentioned,
traceability can be an information infrastructure, much like the Internet.
What you put on there is up to the user. If you are the Canadian Meat
Council, maybe you care about meat attributes. How do you verify that for
the consumer? You can use a traceability system, which is an information
We do recognize some of those values, but they are not in any way the
primary focus right now; the primary focus is building a quality disease and
food safety control system that will help our country in the event of a
crisis. If we build that standard, all of those other criteria and market
access will be satisfied. I believe in that.
I will give you a status update of what PigTrace is today and where we
are. We have completed the Canadian Pork Council and our provincial member
associations across Canada. We have completed the development of our
traceability database, which has been a critical step forward and has taken
a long time. We have been working closely with industry stakeholders
throughout the pork value chain to really assess the needs and the ability
to comply with the program that we are putting together. We have incurred
about two years of delays, unfortunately, and that kind of got back on track
February 2012. Today, we are poised for full implementation of the Canadian
pork value chain. It is an exciting time for me to really see this get off
the ground after being involved with it for eight years.
With that, we definitely look forward to the very generous Growing
Forward 2 funding that has been announced. I have put in a funding
application to Growing Forward 2. We are still trying to leave the
development stage behind us and get into implementation and get going, so it
is still a very immature program and we need assistance. I believe that once
we are up and running, things will move smoothly.
I have talked with many producers across the country and the rest of the
industry. People understand the need for a traceability system. I think
people are concerned about potential costs. They are concerned about a
potential burden on them. Therefore, my first goal is to develop a system
that is as least burdensome as possible. At the very least, we can make this
an easy thing to do for our industry.
Key priorities moving ahead this year involve a national awareness
campaign that we are ready to launch. We are quite excited about it. It will
go out to all of our industry stakeholders across Canada. With that, there
will be an industry outreach effort to properly train and educate our
industry, to get everyone onto the program, to become aware of what the
requirements are and to understand what future requirements will be mandated
under amendments to the Health of Animals Regulations, which we expect
within the next year or so.
A high level of compliance needs to be attained well in advance of a
mandatory environment. Timeliness is critical. We have less than a year left
before this program is mandatory, so we really do need to get out in the
field and get this program implemented. We need support staff out in the
field, something for which I have applied for federal funding to support.
We have heard from producers that the only way we will succeed in
implementing this program is people out and about in the field talking to
producers. I can do it from a telephone, but it is not the same as being on
the farm or meeting in a local district office.
Another big priority is preparing for the regulations that we expect to
come. The Canadian Pork Council will be named the national program
administrator under the regulations, which comes with quite a bit of
responsibility as an organization. We will continue working very closely
with the Canadian Food Inspection Agency on compliance and enforcement as we
move forward with that. The message I leave you with is that PigTrace is an
exciting vision. It is still a program in its infancy and it needs time and
support to mature.
As a parting comment, there are five key messages on the back of our
written submission, and this is part of our awareness campaign. First and
foremost are emergency preparedness, financial stability, market access,
business protection — and the last one I think really captures the essence
of traceability — food security, value chain security and business
We view PigTrace as giving the Canadian pork industry a competitive edge
globally by offering pork buyers and importing countries improved production
security that is resilient to market disruptions resulting from disease or
food safety programs. That is still a philosophy right now, but my vision,
even if we did have a crisis in this country, is that PigTrace can
demonstrate that a value chain is free of that crisis and that value train
could potentially continue to trade even though there is an issue in part of
the country. I think if we have a good quality traceability system,
geography will not matter: It is value chains that matter.
I leave you with that. An underlying theme is value-chain protection and
eventually value-chain enhancement in terms of improved market access and
James M. Laws, Executive Director, Canadian Meat Council: Good
morning, everyone. My name is Jim Laws and I am Executive Director of the
Canadian Meat Council here in Ottawa. I am pleased to speak to you today
about traceability in the Canadian meat industry and to tell you about the
many things we have been doing for years.
As you may recall, the meat industry is the second largest component of
Canada's food processing sector, with annual revenues valued at over $24
billion and total employment of almost 70,000 people. The meat-processing
industry includes over 400 establishments, providing valued jobs and
economic activity in both rural and urban settings, with major
concentrations of firms located in Alberta, Manitoba, Ontario and Quebec.
Canada's meat- processing industry adds value to the live animals born and
raised on Canadian farms, providing a critical market outlet and supporting
the viability of thousands of livestock farmers.
I met with you last on June 28, 2012, when you were seeking our views on
Bill S-11, the Safe Food for Canadians Act, which received Royal Assent in
November 2012. The new act will replace Canada's Meat Inspection Act,
Canada's Fish Inspection Act, Canada's Agricultural Products Act, and the
food provisions of the Consumer Packaging and Labelling Act. The new act
will come into effect when the new regulations have been written and put in
The new Safe Food for Canadians Act, Bill S-11, addresses traceability
from two different perspectives: animal health and food safety. Moreover,
the Safe Food for Canadians Act covers all food commodities. I cannot speak
for all foods, but I can tell you that Canada's meat industry has strong
traceability systems and has had them for many years.
The Safe Food for Canadians Act will amend section 94 of the Health of
Animals Act, requiring persons to provide to the minister information in
relation to animals or things to which this act or the regulations apply,
including information in respect of their movements, events in relation to
them and places where they are or were located.
The industry has very good systems for identification of live animals
such as hogs, cattle and poultry back to the farm of origin. Animals
received at the slaughter establishment must have identification. Live
animals received at the processing establishment are inspected by
veterinarians and inspectors. After slaughter, all carcasses are inspected.
All meat in a federally inspected plant is inspected and deemed safe to eat.
Section 51 of the Safe Food for Canadians Act addresses the main pillars
of traceability from a food-safety perspective. It states that the
Governor-in-Council may make regulations for carrying out the purposes and
provisions of this act into effect, including regulations respecting the
traceability of any food commodity, regulations requiring persons to
establish systems to identify the food commodity, determine its places of
departure and destination and its location as it moves between those places,
or provide information to persons who could be affected by it.
The Codex Alimentarius Commission, established by the Food and
Agriculture Organization of the United Nations and the World Health
Organization, develops harmonized international standards, guidelines and
codes of practice to protect the health of consumers and ensure fair
practices in food trade. Codex defines traceability or product tracing as:
. . . the ability to follow the movement of a food through specified
stage(s) of production, processing and distribution.
The globalization of our food supply adds to the complexity of
traceability systems. Our customers, such as retailers, have increasing
demands of the meat industry, including the adoption of private standards,
such as the Global Food Safety Initiative, or GFSI, which require
What is absolutely critical from a meat industry perspective is the
ability to ensure traceability from the perspective of a recall and having
good supply-chain management and records and electronic systems. This is
achieved in the interest of food safety and has been required for a long
time already by section 60.2 of Canada's Meat Inspection Regulations. Those
regulations specify that every operator or importer shall develop, implement
and maintain written procedures for the recall of meat products that shall
meet the requirements set out in the food safety enhancement manual and the
manual of procedures. As well:
The operator or importer shall develop and maintain any product
distribution records that are necessary to facilitate the location of
products in the event of a product recall.
It also requires that:
The operator or importer shall review the product recall procedures
and shall conduct a product recall simulation at least once a year.
On the request of an inspector, the operator or importer shall make
available to the inspector, in a readily accessible location, a copy of
the product recall procedures, the results of the product recall
simulations for the previous year and the product distribution records.
. . .
There is a requirement for how long that must be maintained.
The Global Food Safety Initiative also requires that its auditors verify
that a food processor have in place strong recall procedures. They must
prove that they have records of exactly to whom they sold which products.
Meat processors in Canada code all of their products, permitting
effective identification and facilitating the recall of a specific product
or lots. All ready-to-eat meat products are identified with a production
date or production code identifying the lot. I brought with me some meat
samples to show you. I brought shelf-stable ones, pepperoni. There is a lot
of information on the package. You can see the best-before date, the
establishment number, the time and the date, so there is a lot of
information on that. I will pass one this way, and I have a couple more I
will pass this way.
An Hon. Senator: Can we open them?
Mr. Laws: You certainly can. I had trouble getting through
security, so I do not want to carry them back.
Members also maintain product distribution records to facilitate the
location of products that need to be recalled. Records are maintained for a
period of time exceeding shelf life and expected use of the product.
All Canadian packaged meat also has the Canadian Meat Inspection Legend
on it, showing the establishment number. I believe you have a copy of this
document that I passed around. The top one is the current Canadian Meat
Inspection Legend applied by the Canadian Food Inspection Agency. The logo
is a crown with a number on it. If you go on the Canadian Food Inspection
Agency website and search that particular establishment number, you will
know exactly where that product was manufactured. The logo below, which I
like better, is the one used by the fish industry. There will be an
opportunity when we combine the regulations for all food sectors to merge
the inspection logo. That is interesting. There are not a lot of foods that
have the identification of the plant number applied. They are able to inkjet
the establishment number on the crown logo on the package.
Canada's meat processing industry is big business with total sales last
year exceeding $24 billion. Companies maintain very advanced computerized
process and inventory control systems. Mainframe computers with business
enterprise software such as IBM's AS/400 operating system or SAP software
are typically used to run their large business control systems.
They have very sophisticated equipment that can print out a unique
multi-digit bar code on each individual box. I have handed out as well
several examples of bar codes that are used. One of them has the explanation
of how this particular company manages. As you can see, it is a very long
bar code, much longer than a standard UPC that you will see just to identify
a product. They can customize the information that they put into their
computers. I have had it translated on the back as well for you. That is one
example of a bar code and there are others that I passed around today. It is
a very powerful tool that they use. They have the ability to code each
individual box. Wireless, hand-held bar code readers enable forklift
operators to place and find specific boxes in huge cold storage facilities.
In the event of a product recall for food safety reasons, tracking the
product back to the meat processing plant of origin is performed readily
thanks to the records kept.
Businesses within Canada's meat industry need to determine the level of
food traceability that is best suited to their operations. This means
limiting the risk to human health by developing economically viable systems
that can respond quickly and efficiently to food safety emergencies through
recalls if required. If a meat company fails to demonstrate effective food
safety and recall controls, it could well mean the end of their business.
Meat processors keep records on more than just their meat. They know where
they source their packaging and their ingredients, such as spices and salt.
We at the Canadian Meat Counsel support the ability to track meat from
the carcass in the cooler to the farm of origin for all meat products.
However, we believe that it is not practical, necessary or economically
feasible to regulate a system to track meat from retail package all the way
back to the animal or the farm of origin. This would be particularly true
for a company that is manufacturing processed meat products, like the ones
we passed around or sausages, because such products come from many animals
that were mixed together. We cannot imagine how people in other sectors of
the food industry, such as milk, cooking oil, bread or frozen pizzas, could
possibly be expected to trace a product back to the animal or farm of origin
without imposing unaffordable and unsustainable regulations on all food
All meat in a federally inspected plant is inspected by the Canadian Food
Inspection Agency and is deemed safe to eat. In the event of a product
recall, tracking the product back to the meat processing plant of origin is
sufficient, we believe. We cannot lose sight of the fact that the meat
industry is but one component of the entire food supply chain. As such, our
investment in traceability, which is very substantial, must offer maximum
benefits while yielding net value to ensure that food safety and animal
disease outbreaks can be detected and addressed quickly and accurately.
We also support the adoption of 100 per cent on-farm food safety programs
where hazards, such as pesticides and farm fuels, are kept safely away from
animal consumption. More work is being done on farms to control pathogens
such as E. coli 0157:H7 in cattle, salmonella in pigs, and campylobacter and
salmonella in chickens. Moreover, when antibiotics and other veterinary
drugs are used on farms to keep animals healthy, records are kept to provide
proof that proper withdrawal times are followed prior to sending animals to
I have mentioned that I passed around several products. I have also
passed one example of one company — but there are many of them — that
manufactures sophisticated, expensive and highly automated equipment that
weighs and labels individual products. It is very fascinating. I understand
that committee members have visited a meat processing facility, but if they
have not seen one that has highly advanced labeling equipment, we would be
happy to arrange a visit when it suits.
I would be happy to respond to any questions.
The Chair: Thank you very much, Mr. Laws.
Senator Plett: Thank you, gentlemen, for being here this morning.
You gave us a slightly different perspective with your feelings on how far
we should trace our products. I am not in any way suggesting that I disagree
with you, but as Mr. Clark pointed out, we are very dependent on export.
European countries are demanding more traceability from farm to fork, if you
will. Denmark, which was mentioned, has a system, but perhaps it is a lot
easier to do it in a smaller country.
I understand some of the ways that we trace pork. To trace it from birth
to the slaughterhouse is not that difficult because of our pyramid system —
a sow and her weanlings are shipped in the same group. With the demands from
European countries, will we not need to go further and trace from birth to
the fork? If we are not doing it, is it because of the economics? As I
suggested, we heard from your colleague here the other day. He painted a bit
of a bleak picture of the hog market and could not afford to do more
traceability than is being done.
Where do we go from here in order to keep up our exports? I would like
both of you to respond.
Mr. Clark: There is a very important distinction between Mr. Laws'
angle on this and my angle. I spoke to live animal traceability and Mr. Laws
spoke to meat traceability. The bridging of those two is done at the
processing plants. I would agree with Mr. Laws that true birth to
consumption traceability should be consumer-driven. I would question how it
improves our core infrastructure. I do live animal traceability as part of
our critical infrastructure protection in Canada — food security, foreign
animal disease, food safety issues. That should be standard across the
country. Give us a very effective but bare bones response to foreign animal
disease and food safety. Consumer-driven things, such as the EU wanting
meat-to-birth traceability, do not give us any value in terms of emergency
response. I cannot think of a situation where a meat product would have to
be traced back to where the animal was born in terms of food safety or
disease issues. I cannot envision that. From the plant, from the carcass to
the birthplace, I can see that. That is critical; that is important. We need
to be able to do that. Similarly, the meat product back to the processor is
important because there is certainly secondary processing that happens to
the meat product.
Again, I want to stress the distinction between live animal trade
traceability that takes us up to the plant. The meat traceability that Mr.
Laws spoke to goes further. It is a two-step traceability system. If the
consumer globally cares about product-to-birth traceability, then let them
pay for it. The whole country should not be regulated and forced to do that.
We do not gain; industry does not gain. If a specific company or processor
sees a small niche market — and I think it is a niche market — that wants
that, let them go through their own pains to develop that and market it that
way; all the power to them. We will do our part on live animal traceability
to help them do that.
Mr. Laws: I certainly must agree. In fact, the label from this
particular company in Alberta, for instance, is a smaller facility. It is a
nice, new facility in Lacombe, Alberta, and they can do it. They can track
the meat back to the live animal. People can do it, but it does add a lot of
cost to the system. If you look at a country like Japan, it a very important
market for Canadian pork products and hopefully will become more so for beef
also. They have a great confidence in the Canadian system. They do not
require it. We send a lot of pork to Japan, but what they are most impressed
with is our on-farm food safety control systems, our in-plant sanitation
systems and our ability to get fresh, chilled meat to Japan and still
compete with meat sold in Japan because it is of such high quality. That is
what is really important.
I agree with Mr. Clark. I have been trying to think of a reason one would
need to track all the way back to the farm. If you were not confident in the
farm sector's ability to keep animals away from dangerous materials like
pesticides, et cetera, then maybe you would feel the need to do that. We are
very confident and we have controls in place to check for antibiotics and
for other residues. We know that is under control and that it is improving
all the time.
Traceability is part of a food safety goal, but food safety, where you
will get the most bang for your buck, is a whole other story. Traceability
is certainly dependent on what customers are asking for. It is very
sophisticated at the meat level. I was quite impressed. I go to members'
facilities. You are in this very large warehouse and they have these
wireless hand-held devices and laptops. They are given the order that they
have to fill; they know exactly where they need to go to pick the boxes to
fill that specific order. It is highly automated.
Senator Mercer: I think we are talking about two different tracks
of traceability now, if I am hearing you correctly. We are talking from
birth to the plant and then from the plant to the plate. Is that what you
are suggesting, that there are two different tracks here?
Mr. Laws: Yes.
Mr. Clark: Yes.
Senator Plett: I certainly agree with the comment about it being
consumer-driven. You talked about Japan, Mr. Laws. We had the occasion — and
I know them well; they are from my home area — to tour the HyLife facility
in Neepawa. They ship the majority of their product to Japan. Japan pays a
premium for dealing with HyLife and getting that product. In that case their
requirements are consumer-driven.
My concern, even though I do agree, is that if we are as dependent on the
export as you suggested we are — and I believe we are — then we will have to
find a way to meet their demands because they will just say, ``Well, we will
buy from Korea because they have the traceability we want.'' Is that not the
Mr. Clark: In terms of global traceability in the pork industry —
and Mr. Laws would be more familiar with multi- products — what we are
proposing to do in Canada is world class. We do not want to outcompete
ourselves. If we are going to take a monumental leap forward with a national
traceability system, the U.S. is building a system that is quite different
from ours, but it will get the job done. In the marketplace, though, ours is
Why would we have to take too many steps forward? Let us say we charge
the end buyer a premium because we have to. Will they go to Brazil or to a
different country? We have to be careful how far we go.
Senator Tardif: This question may have already been answered in
your responses to Senator Plett's questions, but I wanted to get back to it.
In your statement, Mr. Clark, you indicated that the current state of the
traceability system for the pork industry was not where it should be, that
it was labour intensive and that there was still a lot of work to be done.
It was dependent on phone calls and though it could be a major information
infrastructure system, it was not there yet.
However, Mr. Laws, you indicated that the state of the traceability
system in the meat processing industry is state- of-the-art. Why these
divergent views? Is it because we are dealing with two traceability systems?
Mr. Laws: Yes; I think that is the case. In the case of the hogs
that come to the meat processing facility, there are tattoos on the animals
that come from certain barns. We know exactly where they come from and now
there is a different number for every farmer across the country, so that is
not a problem. Cattle have radio frequency devices in their ear tags. We are
able to read those electronically. When they ship loads of chickens, they
have to arrive with a bill of lading that shows the flock. The farmer has to
fill out that they have met all the veterinary drug withdrawal periods, et
cetera, schedules. That would have to be the case; otherwise, farmers would
not get paid for their animals.
Yes, we have improvements to make, but we know where those animals are
coming from. We can get back to the farm very quickly.
I will let Mr. Clark speak about the farm level.
Mr. Clark: To clarify, there are multiple dimensions to this
issue. Mr. Laws explained perfectly well that a given processing plant in
this country will have a relationship with the producer. They can do
one-step traceability. This notion of one-step traceability is probably
something we have had for 50 years. Slapping tattoos on pigs going to plants
has been a practice since the 1950s, I believe. There has been traceability.
The issue is that Canada is such a big and a diverse country. We have a
great number of processing plants and a great number of farms. That one-step
traceability, as a country, quickly becomes a web, a network, and no one can
pull that together in a readily accessible way. That is where the phone
calls come in. If there is a foreign animal disease issue, yes, the HyLifes
of the world will have very good traceability information, as will Maple
Leaf, and the smaller provincial plants throughout Canada, of which there
are many. There are all these nodes of information across the country, which
are not integrated at this point in terms of information. How do you access
that information? You are making phone calls or you go on site to look at a
company's records or you go to farms looking at producer records. One-step
traceability has been in place for a long time, but bringing that together
as a country is the next big step.
In addition, the meat traceability side of it — Mr. Laws would speak
better to this — is driven by food safety and how meat is processed in the
plant. I think the need for plant-to-consumer food safety probably came
before this additional need we are seeing, whether it is for on-farm
contaminants like fertilizers or drug residues, foreign animal disease
issues or what have you.
Senator Tardif: When you say that Canada's meat processing
traceability is state-of-the-art, are you just referring to it from the meat
processing point of view from the plant to the table and not from the farm
to the plant?
Mr. Laws: Again, I do speak for the meat industry, but we will get
better at tracking animals for animal health purposes. You are right that we
are a very large country, but we are still able to get information very
quickly. We are probably not the best in the world, but companies are
getting new equipment all the time. Another company has developed a product
that would print a QR code on each package of which you can take a picture
with your smartphone. That would be linked to a system on the Internet that
would contain a lot of information. That is probably the next big step that
will be coming.
Senator Merchant: Who is the best in the world, then?
Mr. Laws: I really do not know who is the best in the world for
traceability. I can tell you that Canada exported some $4.5 billion worth of
meat to over 150 countries last year. The world sees Canada's meat as very
desirable. Traceability in and of itself is not something that one sells as
a fantastic attribute. Taste, shelf life and food safety are very important
attributes. Traceability is just a function of what is needed in the event
of a recall. Some may like to know where their meat comes from, and that is
fine. Certain very small players can meet that need.
There is no way that you can trace the milk you buy back to a cow, unless
it came from a very small processing facility. How would you trace peanut
butter back to a farm? You would never be able to trace a loaf of bread back
to a wheat farm in Manitoba. Do you want to do that? I do not hear anyone
saying they want to do that, so I do not understand why some think we should
be able to trace meat back to a farm.
Senator Rivard: Thank you, Mr. Chair. You answered Senator
Mercer's question regarding the two traceability systems, one from the birth
of the animal until its slaughter, and the other from the retailer to the
plate; I would say up to when the consumer purchases the meat, because after
that he is responsible for its preservation and for respecting the best
before dates, and so on. Did I understand correctly that traceability in
Canada is voluntary? It is not mandatory?
Mr. Laws: Firstly, regarding meat, federal meat regulations in
Canada are very clear and state that each plant must have a system proving
that it knows where its product is going. Yes, it is absolutely mandatory.
Senator Rivard: That means that if we conclude a free trade
agreement with the European Union, we must have the same traceability
standards as the countries that will be competing with us. So it will be a
matter of quality, price, markets, et cetera. Traceability will not be used
to discriminate against Canadian products?
Mr. Laws: I think that is correct. As it happens, the last time I
was in Europe, I took the time to go into the stores to have a look. I did
not see any evidence of traceability that would necessarily be better than
ours. You saw on television that they had a lot of problems because of horse
meat being mixed in with beef. Canada does not have that problem. In fact,
we sell horse meat to the Europeans and we are proud to designate it as a
Canadian product. When we hear that the Europeans are not even able to
ensure that these products are kept separate, we feel quite confident in our
abilities in this area.
Senator Rivard: We know that the pork industry in Denmark is not
subsidized, as opposed to ours. The subsidies help us to be competitive and
to get close to world market prices, and also provide income for our
producers. How then can you explain that people say that we are not
producing enough because the market is not big enough? Can you explain why
Canada purchased 12.6 million dollars' worth of pork from Denmark in 2011?
Mr. Laws: That is a very good question. Indeed, the Europeans have
a very high tariff on pork imports and that is why Canada is attempting to
conclude a free trade agreement with the Europeans. The Danes have a
protected market where they can sell their products. They are protected by
these very high tariffs.
There may be a cut of the animal that they sell for less in Canada than
Senator Rivard: It is a type of dumping, then; sales that involve
a product that is less in demand and that we produce less. I see a rationale
behind that. Right from the outset, all producers that we meet complain
about production costs and would like to have higher subsidies. They tell us
that the panacea is free trade with Europe, and then with China, Japan, and
other countries. If we are as good as we claim to be, we have to wonder why
we cannot produce enough to meet our own needs and also enough to export:
statistics show that we purchased product from a producer country.
Your answer makes sense to me. I think we are indeed talking about a pork
cut that is not marketed here. We are talking about twelve million, not
billions, but it is surprising that Canada had to import pork from Denmark.
Mr. Laws: We do not really have to. Canada is a free trade zone
for pork. We have no tariffs on pork imports from any country. This means
that we sell almost as much meat to the Americans as we import from them.
The Europeans do not function the same way. We are competing in the Japanese
market, but at the same time, we cannot sell our products in Europe because
their tariffs are too high. We are told that is not fair, but my father told
me that life is not necessarily always fair.
Senator Mercer: Mr. Clark, you talked about two years of
development and said it was an immature program, but on page 5 of the slides
that you provided you show us a database and reporting tools which look
pretty sophisticated. You show a hand-held device that is not unlike the one
that we all have, a good Canadian product like this BlackBerry. This tool is
supposed to be ready by May 2013. Perhaps you can also tell us how this
hand-held device will work.
Mr. Clark: We have our core infrastructure such as these reporting
tools. I am happy that you referenced them, because I skipped over them. It
has taken a long time to develop them to this stage for multiple reasons —
operational, legal and contractual. We finally got it to a stable position
in late 2012. When I say ``immature program,'' it is the deployment of these
tools. My target audience is about 8,000 stakeholders in Canada, which is a
pretty wide web of people to hit. To date, we have been right across Canada
through our provincial pork associations and talking to producers, assembly
yards and abattoirs; but we have not truly deployed these tools.
Mr. Laws referenced some of the animal identification in the industry,
such as the slap tattoo on a market hog, which has been in place for years.
However, having it reported to a centralized database, such as the screen
shots you see here, has not happened yet. When I get back home, probably
starting next week and the week after, this will begin to happen. We are
truly right at the cusp.
As for a mobile device, I am sorry, I do not have a BlackBerry; but we
are very excited about this functionality. It is a simple interface. We are
asking for the key elements of information. It is mobile-accessible as not
everyone has network coverage. Without going into the technical details, it
is a really nice interface; and I am quite happy with it. It is an
infrastructure that we will be able to build on and we are looking forward
Senator Mercer: Perhaps at some future date we might find out how
it is working.
Mr. Laws, you talked about the necessity of having simulated recalls once
a year, I believe you said.
Mr. Laws: Yes.
Senator Mercer: Are the results of the simulated recall made
public? What are the penalties for failing the test? What are the
Mr. Laws: The Canadian Food Inspection Agency reviews this with
every facility at least once a year. It is a requirement. They have to pass
the requirement or they have to prove that they can pass. Otherwise, the
Canadian Food Inspection Agency will issue them a corrective action request
and they have to fix it. If they do not fix it, their licence will be
pulled; it is as simple as that.
I do not believe that the results are made public because if they do not
pass, they will not be in business. Everyone passes because they have to
pass. If they do not pass, they have to rectify the problem until they pass.
Senator Mercer: I guess that goes back to whether the information
is accessible from the CFIA through some kind of access to information,
which may not be in your purview to answer.
It is very useful to see some of these packaging logos that you spoke
about earlier. I question this label because it simply says ``inspected''
and has the Canadian Maple Leaf on it but nothing else. You cannot trace
anything with that. I am curious as to why we would have a label like that
if it will not help us with traceability, whereas the others have numbers
Mr. Laws: That is a good question. Those two labels are for fish.
They will have the option of putting the establishment number somewhere else
on the package. For instance, this package does not have a number on it,
which allows a company that manufactures this product at several facilities
to use the same packaging for all their facilities. The information on the
side of the packaging to identify the facility is applied by ink jet — for
example ``establishment 522A.'' They use that simple label provided the
establishment number is marked elsewhere on the package.
Senator Mercer: We are at the early stages in all of this, even
though someone wisely pointed out to me that we have been able to trace
cattle for a long time because they have been branded. Would it not be wise
to come up with a standard format for the traceability of all products, not
just meat, including fish?
Mr. Laws: That is a very good question and I believe that is
absolutely right. The regulations and the identification that we have to
have are very advanced, whereas other industries and food sectors do not
have to apply the establishment number.
One of the things that really bothers me is that for certain imported
products, such as peanut butter, a company can write ``imported for'' on the
label, which tells you nothing. You do not know where it was made, but you
know only who it was imported for. That is the case as well with certain
frozen pizzas. If the pizza has meat on it, it must say ``product of'' and
the country's name. Many of them come from Germany. If that frozen pizza
made in Germany does not have meat on it, they can put ``imported for'' and
that is all the consumer knows.
If you are trying to determine what type of information Canadians would
like to know, that is a whole different story. In Canada we have a lot of
work to do because there is a lot of discrepancy between the food sectors.
The meat industry is way up here compared to other sectors of food, in
particular Canada's federally regulated meat inspection. As well, there are
provincially registered meat establishments in some provinces that are
rarely inspected; but that is another issue that is of overall concern to us
that goes beyond traceability.
Senator Mercer: My final question goes directly to your last
Mr. Clark: Your question is more directed to the meat side, but I
want to add something on the live animal side. There is a great amount of
harmony and synergy among the many livestock groups and the federal and
provincial governments through the Industry Government Advisory Committee on
Canadian traceability. We have a very good national framework that we are
building on. There is a great amount of similarity and synergy on the live
Senator Mercer: If I understand, pork is tattooed and beef is
electronically ear-tagged. The system for beef is a little more
technologically advanced than it is for pork.
Mr. Clark: The form of identification kind of suits the industry.
Traceability is not identification, and the cattle system is an
identification system to date. They have the ability, if they moved in that
direction, to do true traceability, which is ``show me all the different
farms and places this animal has visited.'' That has not happened to date in
Canada, other than in the province of Quebec.
You are right that we have different modes of identification. The pork
industry also sells an electronic tag voluntarily. We do not mandate it for
the entire industry. We have the same international standard identification
system as the cattle industry has. That same core infrastructure is there
for all species, including dairy, bison and others.
Senator Mercer: Mr. Laws, we have heard over the last couple of
years on this extremely important subject of food safety that CFIA has hired
a large number of people. Without commenting on the numbers, because I will
get into political trouble with some of my colleagues, are there enough
people in the field doing the work, in your estimation?
Mr. Clark: I can respond first because I can attest to my
experience with the new people that have been hired to head up this live
animal traceability file. They are very well equipped and qualified.
When it comes to deployment, compliance and enforcement in the field, I
have concerns about the number of inspectors. If we are going to do
traceability in Canada under a federally regulated system, both taxpayers
and industry will have to pay for it. It needs to be reputable. However, we
do not have the number of enforcement agents and inspectors to truly audit,
much like on the meat side. I worry that we will do all this work and not
have the third party government-certified CFIA human resources to truly
verify our live animal traceability system. I have to admit that when I hear
about budget cuts to the CFIA I worry that we will not have a reputable
enforcement agency to verify it for us.
Mr. Laws: The answer is yes if you have good people who are well
equipped with good BlackBerrys, better electronics and good training. If any
food facility has a system that is well designed and working perfectly, you
should never need to have any inspectors or any testing for that matter —
that is, if it is working perfectly. That is the goal we are trying to get
to, namely, food safety programs at the farm, at the feed mill and at all
the suppliers so that everything goes along well.
We have seen a lot of changes over the last 20 years. The shelf life of
all kinds of food products is getting better, and I think Canada's track
record is very good. Despite a couple of very high visibility media events
that happened, we still have very few people in this country who have
trouble eating the food.
Senator Buth: I have a couple of technical questions. We heard
from Alberta Pork on Tuesday that they have developed their own system; you
also referenced the system in Quebec in terms of traceability. Will PigTrace
integrate with those two systems?
Mr. Clark: Certainly. I should clarify — it is a very important
distinction — that Quebec as a province has done live animal traceability on
other species. Years ago, when they saw that the Canadian Pork Council was
moving in the direction of having a federal regulation, their provincial
ministry backed away from doing a provincial regulation and a provincial
system for pigs and fully supported doing a national federal system.
On the other hand, quite by surprise, about 2008 or so was at a period of
time where on the national side of things we had stepped back because we
were in negotiation with CFIA. I will not get into the specifics, but the
appearance was that we stepped back. The Alberta government leadership as
well as Alberta Pork was quite new. They stepped in. There was not a lot
happening on live animal traceability on pigs at that time. They decided to
forge ahead and do their own provincial system.
Now, that is a legacy piece that I have to deal with in terms of making
sure that we bridge the gap in terms of what they are doing provincially and
what we are doing nationally. Western Canada is very integrated on the pork
side of things.
I will have to admit that communications is an asterisk. How do we
communicate the program nationally when a province does something
differently? Will they carry the same communication pieces and the
stakeholder materials that will be going out nationally? I do not know. I
work very closely with Mr. Fitzgerald and his staff at Alberta Pork; we have
a good working relationship.
To clarify, Quebec with other species such as pork is fully part of our
Senator Buth: There is less than a year left before the system
becomes mandatory. Have you done analysis in terms of what the costs will be
once you are up and running? I understand there are development costs, but
what will the costs be for PigTrace? Who will pay, essentially?
Mr. Clark: First, I want to address something that Senator Mercer
referenced earlier in terms of costs. Mr. Laws referenced information
technology and good flow of information.
When I look at the U.S. system, there are a great number of human
resources there. They have 10 times the population we have in Canada. The
National Pork Board in the U. S. has designed their system to be more human
resource intensive, so they are treating each state as an international
boundary. Within the state they feel they have the human resource capacity
to go on-farm, to make phone calls, to do those things. That is what they
On the Canadian side of things, we are putting our faith in technology.
Technology can really reduce the amount of human resource needs involved.
With cost to the industry, we have a great amount of faith in that same
philosophy. The cost comes at the front end in terms of developing good,
quality tools, and they will need to be maintained over time as technology
changes. The way we have structured the live animal pig system, it is not as
identification heavy as the cattle system, for example. Every beef cattle in
Canada has to have an identification tag by regulation. It will not be that
way in the pig industry. There are certain types of animals and certain
types of movements that will require identification, so that is a lower cost
I truly believe the real cost will come up front within the time span of
Growing Forward 2 in terms of our industry partners such as packing plants
modifying their information technology so it can dovetail into PigTrace so
we are not duplicating workload.
Educating producers, taking the time to train them and inform them how to
forward information, is where I believe the cost will come. Once we are
fully implemented and people understand what they have to do, what the
requirements are and what the benefits are, I think the costs will be quite
minimal. I do have actual numbers based on today's figures. What they will
be in five years, there will be some inflation, but I am confident it will
be quite a manageable amount. The true cost now is with development,
deployment, education and innovation.
Senator Buth: You said you have current costs. Are you referring
to cost per farmer, what it will cost on a farm basis?
Mr. Clark: I do not know if this is the forum to say numbers, but
I am an honest person. If I look at what I need — and this is projecting
forward — every farmer, assembly yard, slaughter facility, rendering plant,
research facility, live animal fair grounds in Canada is on the PigTrace
program, understands what they have to do, agrees with doing it and is fully
compliant. If we are in that position, when I look at core maintenance costs
to run a database, pay for all the software licences I need, the hardware,
the disaster recovery that CFIA and the regulations require us to have, half
a million dollars a year for all of Canada would be more than enough. Time
wise, that is seven years from now. That is not what we need now to develop
and grow this program, but long term, certainly industry and the public can
Senator Callbeck: When you say half a million, that is to maintain
it, right? You said the big costs would be at the front, setting it up. How
many dollars are we talking about there?
Mr. Clark: I should clarify. We are working together; that is, the
provincial agency or service provider in Quebec, Agri-traceability Quebec;
our service provider, the Canadian Pork Council; and also the Canadian
Cattle Identification Agency, which is an administrator for cattle
throughout Canada. Those two entities have an information infrastructure.
They both have databases; they both have staff. It is not an efficient way
to move forward. For a long time the Canadian Pork Council has been a big
proponent of bringing those two together, having a truly Canadian
multi-livestock species service provider — ``centre of excellence'' is the
term I like to use. That will really reinforce our Canadian brand.
When I give these numbers, we are looking at cost-sharing multi-species.
No one knows what that looks like right now. Those cost-benefit analyses are
being done right now, multi-species. However, that is the way to go and this
committee should know that. The need and the drive to move this forward
cross-commodity is critical. None of us have enough resources, both human
and financial, to go it alone.
In terms of costs now, I have put in a funding application for the next
two years. A lot of that is for deploying our education campaign, having
extension staff out in the field in each province or region, and also
maintenance and continued deployment costs for our tools. Off the top of my
head, I think I have requested about $1.5 million for each of next two years
to continue to grow this program. This is a critical step. I have heard it
loud and clear from our leadership both provincially and nationally, our
producer board of directors, that if we do not have actual people out in the
field pushing this program, traceability will be lost in the fog of other
issues that this industry has to deal with. It is not that people are
opposed to it, but we need to be out there with extension staff helping grow
Senator Callbeck: If you have put in a request for the money for
the awareness campaign and the outreach initiative, you will be out there
talking to producers who will be asking you how much will this cost. What
are you telling them?
Mr. Clark: I tell them it will cost their time. How long does it
take you to pay bills to hydro? It is your time. That is how I see it. You
are submitting information. Getting set up to submit that information in an
efficient way is what we are doing right now. That is what takes time. Once
that is happening in a seamless way, I view it as nothing different than
paying a bill online or ordering an airline ticket. You are submitting
information each time you do that. We have good information tools to do that
in a quick way, and that is what we are building right now.
Senator Callbeck: When you talked about your awareness campaign,
you said that before the regulations came into effect you would like to see
total compliance, and I wondered what the percentage of compliance is right
now. Do you have any idea?
Mr. Clark: I could answer that in a number of different ways
depending on how you perceive compliance. Mr. Laws spoke to what I call the
one-step traceability. People have been compliant with that for a great
number of years. Most good production managers in Canada have traceability
within their systems. HyLife Foods was mentioned. They know where all their
pigs are. They have 80 farms in Manitoba and Saskatchewan. They know the
flows. They know what is connected.
In terms of compliance to get that information into a centralized system,
it is zero compliance. We do not have information in PigTrace from farms.
That will happen and would have happened this week if I were not travelling,
but that will happen immediately. We have producers ready to do this. Yes,
they need to be nudged a little bit because they do not have to do it right
now, and I sure do not want them to be waiting until they have to do it come
Senator Callbeck: If it comes in and is mandatory, what will this
traceability system mean for the consumer in terms of price? Do we have any
idea what percentage or how much might be added to a pound of pork?
Mr. Clark: Mr. Laws referenced earlier that traceability in and of
itself is not a product attribute. It is an information infrastructure. I
used the mental image of a railway track, and Senator Mercer said he likes
pictures. Traceability is a train track. The trains and cars you put on
there is up to the marketplace. If Mr. Laws' meat representatives want to
advertise a certain product attribute, a traceability system could help do
that, but first and foremost it is a public good for emergency response.
There is financial mitigation. If there is a large-scale foreign animal
disease issue, the government is paying to respond to that issue. If we have
poor quality information, we will be like the United Kingdom 13 years ago,
with no information, animals moving all over the countryside, diseases
moving everywhere, and the cost to eradicate that disease skyrockets.
The real focus for me is giving our animal health officials, government
officials, good quality information so they can eradicate that disease issue
or food safety issue on-farm as quickly as possible so we are not spending
taxpayer dollars fighting it and we are not losing private sector dollars in
The Chair: Honourable senators, we have a second panel. The chair
would like to recognize that we also have three other senators with
questions. If each one can ask a single question so that we can then move on
to the second panel, I would appreciate it.
Senator Merchant: I am from Saskatchewan. Alberta and Manitoba
were mentioned, and we have a vibrant pork industry in Saskatchewan.
Mr. Laws, you said that some things had happened that maybe give a
negative impression of our industry in Canada. You did not specify what they
were. Suddenly I was reminded of some of the images I have seen recently on
television of the inhumane treatment of pigs. Is that an issue that you have
to worry about?
Mr. Laws: That is an example of one single incident that happens
in Canada that affects everyone, and that is just a really good example.
Similarly, if there is one bad food safety event somewhere, it affects the
whole industry. That is why it is so important that everyone have a really
good food safety system in place. You are absolutely right.
Mr. Clark: I would add, Senator Merchant, that animal welfare,
animal care, much like food safety and other product attributes, is just
that. How do we verify that for the consumer? Right now, it is through word
of mouth. It is through contractual obligations: ``I promise you I will do
this.'' How do we know that? If you are a live animal buyer, a slaughter
facility, if Japan asks you to prove it, how do you prove that?
A traceability system can prove that. You can say these are the farms we
source from. You can visit them, or we have an animal care assessment
program through the Canadian Pork Council. We could show Japan all of these
farms that a given abattoir sources from and are all on animal care
assessment. The have annual visits to verify animal handling. That is one
example of us being able to verify something that the marketplace cares
about. Using good quality information and traceability, PigTrace gives us
that infrastructure to be able to build on that, much like the train track I
Senator Maltais: Welcome, Mr. Laws. I think that our fathers had
the same philosophy regarding the world not being fair. And mine used to
add: ``and justice is blind.''
Regarding Canadian consumption, let us talk about the 30 per cent we did
not discuss, and the export of seafood products.
We know that in Canada we have A1 quality aquaculture products. There is
a twofold inspection for seafood, a federal one and a provincial one, in New
Brunswick, Quebec, Nova Scotia, British Columbia — and I do not know about
Prince Edward Island.
And so the product we export is recognized as being at the A1 quality
level. In fact, Canada was one of the first countries to have signed on to
the FAO charter concerning the quality of its fish exports.
I am intrigued by one thing. A lots of efforts are made in the fishery in
Canada to ensure that, first, Canadians have excellent products; secondly,
that our export products are recognized internationally. What is the
situation with imported seafood? Who guarantees that when I go to the
supermarket, the fish from this or that country is good, that it was fed
properly, that its provenance or producer can be identified?
Mr. Laws: That is a good question, and I think that
representatives from the Canadian Food Inspection Agency would be the best
people to answer it.
Senator Maltais: I put the question to them and they referred me
back to you.
Mr. Laws: Oh! I think that if you were to ask them, they would
tell you that they visited the country and that they verified their system.
But, again, this is not my area of expertise.
Senator Maltais: After all, we are talking about 30 per cent of
the food Canadians consume, that is not negligible. It is not a spoonful of
I would like to add — and very few people in Canada or abroad know this —
that for seafood from Nova Scotia, New Brunswick, Quebec, Prince Edward
Island and British Columbia, purchasers have their own inspectors on site.
That is quite unusual. We do not see that for poultry products.
The provincial governments carry out an inspection, the federal
government does so as well, but when we import products, we do not know what
we are eating. It is a problem because it means unfair competition for our
fishermen, and it is unfair to consumers who do not know what they are
eating; traceability is impossible. We can track back to the grandmother of
the piglet, but we cannot know the origin of the fish product, nor its
One of these days, someone, some Canadian agency or other, is going to
have to provide an answer. Canadians have to know what they are buying from
supermarket shelves. Having said that, I thank you.
The Chair: Thank you; I am going to ask our clerk to follow up on
that matter with the committee on fisheries, Senator Maltais.
Senator Dagenais: Thank you to our two witnesses. Mr. Laws
answered one of our two questions on horse meat that wound up in spaghetti
sauce in Europe.
To what extent are Canada's traceability criteria harmonized with those
of the United States, so as to facilitate trade between the two countries?
Can you answer that?
Mr. Laws: That is a good question. There are probably some very
stringent requirements as to the information we have to produce before the
truck arrives at the U.S. border. Both governments are making efforts
through the Regulatory Cooperation Council. Serious efforts are made at the
border to ensure that the information is passed on and that things go
smoothly. We had hoped that more work would be done on that. We made efforts
to urge the Americans, who have inspection stations at the border, to do
what we do in Canada; here the product is allowed to go to the clients, to
the facilities, where they are inspected again. We are still working on
that. It is a big challenge because of the Americans' security priorities.
We understand that, especially in light of recent events.
The work is ongoing, but it is true that the information is well shared.
Moreover, we are waiting for the Canadian Food Inspection Agency, which
issues our documents, our export permits, to produce an electronic version;
it has been working on this for a long time. We are still using a paper
version today. We need this project to be completed, because Canada is not
world-class in terms of electronic exports. We hope that the project will
come to fruition soon.
The Chair: The witnesses have heard this morning that traceability
is an important subject matter for the committee. On this, you shared
information that Canada is working toward going forward with a world-class
traceability system. We thank you for your leadership.
Honourable senators, we now welcome Mr. Mike Sadiwnyk, Senior Vice
President of Global Relations and Chief Standards Officer, GS1 Canada.
Thank you very much, Mr. Sadiwnyk, for having accepted our invitation to
come and share your opinion and vision with us.
I invite you to make your presentation, followed by questions from
Mike Sadiwnyk, Senior Vice President, Global Relations and Chief
Standards Officer, GS1 Canada: Good morning. I am pleased to be with you
today to share GS1 Canada's perspective on traceability across Canada's food
industry and to highlight how the adoption of global supply chain standards
is fundamental to the industry's response to new challenges.
Allow me to begin by introducing the organization that I am with. GS1
Canada is hardly a household name, yet it is part of the lives of all
Canadians. GS1 Canada is not, however, a stranger to food retail, food
service and the chain of supply that serves consumers with a continuous flow
of product. GS1 Canada is one of 111 country or member organizations that
together form the GS1 organization. GS1 Canada and the global GS1
organization are not-for- profit entities. We serve multiple industries by
defining global best practices for how goods flow from raw materials
suppliers through the various stages of production and distribution, finally
GS1 standards are user-defined. That means they are not created by an
individual or an expert group but are defined through a process of industry
consensus on a global scale. You can think of GS1 standards as a suite of
standards that enable the globally unique identification of products of
companies and their locations. They enable those companies to express
information in standard bar codes, meaning they can be created in one place,
read anywhere in the chain of supply anywhere in the world.
We are familiar with the bar code that appears on consumer items and
drives the checkout process; but that is only one example of a GS1 standard.
Other GS1 standards simplify the process of data sharing with business
partners as goods are created, ordered, shipped and received.
I would like you to think of GS1 standards as the global language of
business. GS1 Canada's roles are to manage the assignment of bar codes in
Canada to help Canadian companies of all scale to integrate global best
practices into their supply chain operations and to ensure that unique
Canadian requirements become part of the global standard.
GS1 Canada is industry-driven and for this reason has a unique governance
structure. We have multiple boards representing the various industries using
GS1 standards. The food industry is one of those priority industries. Each
board defines the standards implementation priorities for that industry.
The conventional definition of ``traceability'' is, of course, a
company's ability to understand the origins and characteristics of the
inputs, the processes used to create those products and their further
distribution. We have used this definition for over a decade and have
consequently developed basic global supply chain standards to enable this
sequential sharing of information up and sometimes down the supply chain. To
realize farm-to-fork traceability requires that everyone is following the
same methods for identification and for the sharing of information across
the supply chain.
In 2003, GS1 Canada was invited by Agriculture and Agri-Food Canada to
head up a national food initiative called Can-Trace. The goal of Can-Trace
was to define the minimum information required for a one-up one-down
traceability standard for the entire Canadian food industry. Can-Trace was
unique in that to realize the goal, we brought together all major commodity
groups and all major players from production, distribution and retail to
collaboratively agree on a voluntary national traceability standard. That
standard was rooted in GS1 global standards.
Honourable senators, the conventional definition of ``traceability'' is
being replaced by the need for supply chain visibility. The difference is
that visibility refers to a capability that goes beyond any single trading
relationship in the chain of supply. Visibility is the ability for trading
partners to see where products are or where they were anywhere in the supply
chain and to understand why they are there. There is a greater emphasis on
understanding and sharing information about supply chain events with more
partners in the supply chain. Visibility is not a software solution. Rather,
it is a business capability that is enabled by common standards and
different technologies. What industry drivers are giving shape to the need
for supply chain visibility?
First, the empowered consumer: Today's consumer has access to a world of
information and demands accountability and a level of transparency that we
have never seen before. Consumers expect retailers and brand owners to
provide reliable and timely content about origin, production method,
nutritional content, allergens and whether the product is traceable. These
expectations require the entire food supply from one end to the other to be
interoperable and to seamlessly share information. Consumer trust is on the
Second, heightened concern for food safety and quality: While Canadians
are blessed with a dependable food industry, chains of supply are getting
longer and far more complex. This demands that every company along those
chains of supply have greater visibility of how products were created,
handled and stored. In the event of a product recall, they require the
capacity to identify products precisely and to act quickly. Those who are
able to do this earn the trust of commercial buyers and consumers.
Third, the need to introduce sustainable business practices: If Canada's
food industry is to brand itself sustainable, then along with this profile
come new demands for information. What is the product's origin? What
production methods were used? What resources were used? What journey did
that product take? Product claims will require information from across the
supply chain to substantiate them.
Fourth, the ongoing need to compete with other sources of supply that
continues to challenge all companies in the food supply chain to find new
efficiencies and lower operating costs: Supply chain costs are not exempt
from that. With visibility comes a more efficient method for information
sharing across all trading partners.
While there are success stories to be proud of and showcase, when we look
at the capacity of the food industry as a whole, we find that many companies
have only partially embraced global standards and many have not embraced
them at all. We are not leveraging common standards from the beginning of
the food supply chain all the way to the end. In other words, the entire
food industry is not necessarily speaking the same language of business.
What do we need to do? We need to capitalize on an existing culture of
collaboration within the Canadian food industry. This means bringing the
entire food industry together to define solutions that enable the entire
food industry to rethink how we share common information resources. Canada
did this with the Can-Trace initiative; so it can be done. We need to focus
on the needs of the smallest businesses. These enterprises typically do not
possess the wherewithal to understand how to leverage global standards
within their operations or how to find standards- compliant solutions. I can
assure you that no one is calling them because they are too small. Small
businesses need better access to both global standards and to enabling
We need to deploy visibility solutions on an industry-wide scale. GS1
Canada has engaged with Agriculture Canada's Industry Government Advisory
Committee, which is helping to shape the national agri-food traceability
system. We believe that visibility across the food industry is achievable
and requires stitching together existing sector investments so they are
truly interoperable across the entire food supply — that they speak the same
language of business.
This concludes my remarks. I welcome any questions.
The Chair: Mr. Sadiwnyk, thank you very much.
Senator Merchant: Is your company concerned about the traceability
of imports? On the previous panel, Mr. Laws pointed out that you cannot tell
where a jar of peanut butter comes from. What are you doing in that respect?
Mr. Sadiwnyk: The short answer is yes because global supply
chains, by definition, apply to the entire food chain; and that applies to
imported products. Certainly, we are seeing the leading retailers and
distributors applying global standards in the way they capture information
Senator Merchant: More and more the large chain stores have whole
sections dedicated to organic products, and Canadians are demanding more
organic products. How are things labelled for us to know whether something
is truly organic?
Someone called me this week who is very concerned that a new alfalfa will
be approved for use in Canada. He is saying that this alfalfa is a
perennial. It is genetically modified, and it will invade all of the organic
fields in Canada because it is transported by bees or birds or through the
air. Organic farmers are apparently very concerned because it will put
organics out of business. Are you concerned about that? What can you tell
Mr. Sadiwnyk: I would say that different commodity groups and
different products will make more claims, not just organics but also health
and wellness claims, traceability claims, many things. The issue to the
supply chain is not so much whether they are certified or not. The issue for
the supply chain is how we capture the information that has been recognized
and certified. How do we share and move that information along the supply
chain? Those buying those products are increasingly asking the question: How
do I know this to be true? Those are not questions for me to answer, but
certainly, for the supply chain, they are. How do we know that we have the
information that everyone along that chain of supply can at least validate,
saying, ``I have the information that I need, that I have to pass along and
that will, ultimately, get to consumers, who will ask their questions?''
Senator Buth: You are a global not-for-profit association, and you
have 20,000 Canadian members. How are you funded?
Mr. Sadiwnyk: We are funded by our members. GS1, globally, is a
member-driven organization and is funded by its members. In Canada, those
organizations that require a barcode to put on their products would come to
GS1 Canada, and we would provide that. That is our source of funding.
Senator Buth: You are responsible for allocating barcodes. What
about QR codes?
Mr. Sadiwnyk: The short answer is yes. What makes a barcode unique
is actually those numbers inside. If we were to hold a clinic on barcodes,
it is a bit like Mr. Laws explained. If you look inside it, there is a lot
of information in there. The part of that information that GS1 Canada
administers is to make sure that, when we assign the barcode, it is globally
unique; it points to a very specific company and brand owner. That is a
piece of the information there.
Senator Buth: What about QR codes, the little squares that you see
that you can take a picture of with your smartphone. Do you assign those
Mr. Sadiwnyk: Absolutely. There are really two types of QR codes
in the world. Not to hold a clinic on QR codes, but some, I would say, are
rather undisciplined and would give you a very bad answer. However, QR codes
issued through GS1 globally have the rigour that I just described. They do
have the capacity to point to a brand owner, to someone.
Senator Buth: You made the comment that you have been working with
the government, I assume Agriculture Canada.
Mr. Sadiwnyk: Yes.
Senator Buth: On Can-Trace, since 2003. Where are you at with that
Mr. Sadiwnyk: Can-Trace was tasked, in 2003, to really do two
things. The first task was to assemble the industry. As I described, it was
not a modest ambition. The ambition was to bring everyone to the table —
think of a matrix — all of those different commodity groups, through all of
those different stages of production, to seek an agreement on the second
deliverable, which was: Can we agree on what traceability has to look like
from end to end? Can we agree on what the minimum amount of information is?
That was achieved in 2006. I can tell you that some of those
accomplishments, some of the conclusions that were reached in Canada, were
actually put into global standards. Canada led. That work in 2006 ended
because we fulfilled our mandate.
Senator Buth: Is Can-Trace done, then?
Mr. Sadiwnyk: Can-Trace is done, but I can assure you that all of
the conclusions that were reached in Can-Trace in terms of a standard have
become part of the global traceability standard. The best kept secret is
that Canada really shaped what that global traceability standard looks like.
Senator Callbeck: You are a non-profit organization and are funded
by your members. What is your budget?
Mr. Sadiwnyk: Our budget, in Canada, is about $20 million, and
that budget is used to perform two major functions. The first is assignment
or allocation of barcodes to companies in Canada.
Second, the food industry in Canada has asked GS1 Canada to manage a
national registry of food products. It has a name. In the marketplace, it is
known as ECCnet. The industry, not GS1 Canada, collectively agreed that this
was necessary. We need a central repository for all products, and the
industry asked GS1 Canada to operate that registry, on a cost recovery
basis. The national product registry was created out of the need to pick up
Canada's game to improve the efficiency of the supply chain.
Senator Callbeck: How expensive is it to get a barcode?
Mr. Sadiwnyk: If you are a very small organization, the smallest
organization, $60. If you are a multinational organization, it is around
$1,500 per year.
Senator Callbeck: You say you have multiple boards. Comment a bit
about your structure.
Mr. Sadiwnyk: Absolutely. We have five sector boards. We have a
sector board for what we would call grocery, for food service, general
merchandise, apparel and hard lines — do it yourself — for pharmacy and for
health care, medical devices. Why five boards? These five boards are
concerned with the implementation issues in their own sectors. The pharmacy
people really do not want to spend a lot of time listening to the general
merchants. They want to have the ability to talk about their issues and to
determine how they will to act as an industry and will deploy global
Senator Callbeck: Are they all really independent, or is there an
Mr. Sadiwnyk: We have a board of governors that manages the
governance of the entire organization, absolutely.
Senator Callbeck: In your last paragraph, you recommend that the
government support the adoption of existing industry-developed global supply
chain standards by integrating these standards into government policy. Give
an example of what you are talking about there. Do you really want
government to encourage this or legislate it? What are you really asking
Mr. Sadiwnyk: Where we see the exposure and where we see a role
for government is really with the smallest organizations. Of course, some
industries are doing a much better job than others, so this is not a
broad-brush statement. We can say that what we have learned is that the
smaller the organization, the less wherewithal they have. They are really
disconnected. No one is talking to them, so we believe that there is a role
for government to help the smallest organizations to get connected, to
become visible. We think that is a role.
The second role that we see for government is in helping to bring all
parties to the table.
Senator Callbeck: Give an example of how this would help a smaller
Mr. Sadiwnyk: With a smaller organization today, if you ask them
what technology they are using in their industry, they will say ``I have a
home computer.'' If you ask, ``Are you using barcoding in any part of your
business so that those receiving and handling your product can more
efficiently understand what you are giving them?'' most of them will roll
their eyes, senator. It is not within their capacity. We are certainly not
saying that the government needs to go and buy all of this technology, but
they are not exposed. These organizations are outside the conversation
entirely, and we believe the government can help them get some visibility
and become visible to those who have solutions.
Senator Rivard: Thank you, Mr. Chair. Over the past few months we
had the opportunity to meet some eminent people in this area — researchers,
professors, senior officials, people in our field, and today, we have the
added opportunity of meeting with you.
I would like to go back to a statement made by renowned professor Sylvain
Charlebois from Guelph University; he said before this committee that in
order to be effective, a traceability system requires cooperation and
information sharing among the various stakeholders in the supply chain. Do
you agree with that perspective? Is such cooperation possible without
interfering with the competitiveness among the stakeholders in the supply
Mr. Sadiwnyk: Senator, my answer to your first question is yes.
Perhaps it is ironic that last week at the Conference Board of Canada's Food
Summit in Toronto, the professor and I both shared the stage on a panel
where we were talking about this very subject. We agreed that it absolutely
is possible and absolutely necessary that Canada step up its game to meet
some of those challenges that I talked about, and I think he shared some of
those views as well.
To your second question, there is always the issue of what is competitive
and non-competitive. This is not a traceability question, but it is a
question we face quite regularly. As you try to bring industry together —
and you try for all of us to agree on a way forward — we have seen time and
again that we have a culture of collaboration in this country. We can
separate non-competitive from competitive. How I uniquely identify products
anywhere in the world is not a competitive issue. How I execute my supply
chains, on execution, is very competitive and that is always off the table.
The Chair: I have a question following on Senator Maltais.
Mr. Sadiwnyk, you heard the question he asked to the previous panel and
you mentioned that you are responsible for five different bar codes within
your organization, right?
Mr. Sadiwnyk: No. We take our governance from five different
sector boards. The standard solutions are not different across sectors. The
implementation priorities of what may be in pharmacy would of course be
different from food and general merchandise.
The Chair: Have you ever had questions about looking at the
fishing industry or fish products?
Mr. Sadiwnyk: I would answer yes, in this way: We are certainly
hearing from the larger retailers and distributors. As they bring in product
— and they are not distinguishing whether it is from Canada or from other
locations — we hear that they are really expecting more. We are also hearing
this from some of the global companies out there. They are expecting more
information from companies everywhere and they are turning up the volume on
what they expect.
The Chair: As per information?
Mr. Sadiwnyk: Yes, as per information.
The Chair: I see that Senator Maltais wants to ask a question.
Senator Maltais: You stated that you work with a five-digit
barcode, if I understood your brief correctly? If some day you deal with
fish, and I hope that that day will come, are you going to have a problem
with the St. Lawrence striped bass?
Is it possible to work with barcodes on fish?
Mr. Sadiwnyk: I cannot see the day where we stamp a bar code on a
fish, but in other parts of the world we see that as fish are harvested and
caught, we are identifying where they were caught, the vessel, species and
recording that batch or lot information in a very standard way. We are
communicating that information in a very standard way. I have yet to see a
bar code stamped on a fish.
The Chair: Mr. Sadiwnyk, as we go forward before we close our
committee hearings, and during this evolution if there is something you
would like to add to the committee's process, please do not hesitate to
write to the clerk.