Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 26 - Evidence - Meeting of March 26, 2015


OTTAWA, Thursday, March 26, 2015

The Standing Senate Committee on Agriculture and Forestry met this day at 8:02 a.m. to study international market access priorities for the Canadian agricultural and agri-food sector.

Senator Percy Mockler (Chair) in the chair.

[English]

The Chair: I welcome you to this meeting, honourable senators and witness, of the Standing Senate Committee on Agriculture and Forestry. My name is Percy Mockler, a senator for New Brunswick. I'm the chair of the committee. I would like to ask the senators to introduce themselves to the witness.

Senator Beyak: Lynn Beyak from Ontario; welcome.

Senator Merchant: Welcome. I'm Pana Merchant from Saskatchewan.

Senator Tardif: Good morning. I'm Claudette Tardif from Alberta.

Senator McIntyre: Paul McIntyre, New Brunswick.

Senator Unger: Betty Unger from Alberta.

[Translation]

Senator Ogilvie: Good morning. I am Kelvin Ogilvie from Nova Scotia.

[English]

The Chair: Thank you, honourable senators.

Before we begin with our scheduled panel, I would like to inform senators that the deputy chair and I will be absent from the first part of our meeting on next Tuesday, March 31. This being the case, I would like to let you know that if we are in agreement, Senator Maltais will act as chair until our arrival from Internal Economy.

Thank you. Motion adopted.

To the witness, we will formally introduce you in a few minutes. The committee is continuing its study on international market access priorities for the Canadian agriculture and agri-food sector.

[Translation]

Canada's agriculture and agri-food sector is an important part of the country's economy.

[English]

In 2012, the sector accounted for one in eight jobs in Canada, employing over 2.1 million people and close to 6.7 per cent of Canada's gross domestic product. Internationally, Canada, the Canadian agriculture and agri-food sector, was responsible for 3.6 per cent of global exports of agri-food products in 2012. In 2012, Canada was also the fifth largest exporter of agri-food products globally.

Canada is engaged in several free trade agreements. To date, 12 FTAs are in force. The Canada-European Union Comprehensive Trade and Economic Agreement is concluded and 11 FTA negotiations are ongoing, including the negotiation to modernize the Canada-Costa Rica Free Trade Agreement. The federal government is also undertaking three exploratory trade discussions with Turkey, Thailand and the member states of Mercosur: Argentina, Brazil, Paraguay, Uruguay and Venezuela.

Honourable senators, we welcome this morning, from the Canadian International Grains Institute, the Honourable JoAnne Buth, former senator and member of this committee and now chief executive officer of the institute.

On behalf of the committee, the chair would like to recognize JoAnne Buth. You are at home in our Agriculture and Forestry Committee. On behalf of all members of the committee, I think we can say we have been looking forward to your return to this committee, and we now have you just where we want you.

That said, yes, with her knowledge we can grill her. I will ask the Honourable JoAnne Buth to make her presentation.

Hon. JoAnne Buth, Chief Executive Officer, Canadian International Grains Institute: Thank you very much, Mr. Chair. Let me tell you that I was a bit perturbed when I saw that I had an hour in this chair. I hope you won't be too hard on me this morning.

It is a real pleasure, honourable senators, to be here today to speak to you about the Canadian International Grains Institute in relation to your study on international market access priorities for the agriculture and agri-food sector.

The Canadian International Grains Institute, or Cigi as we're commonly known, is an independent organization founded in 1972. We used to be funded by the Canadian Wheat Board and Agriculture and Agri-Food Canada, AAFC. Now we are funded by Western Canadian farmers, with continuing funding from AAFC through the AgriMarketing Program and the AgriInnovation Program.

Our vision is the global recognition of Canadian grain and field crops as the preferred choice for end-use product application. Our mission is to increase utilization opportunities for grain and field crops around the world.

What does that really mean? It means that we want to see Canadian products and ingredients in food, grocery stores and homes throughout the world, and we want processors and end-users to specifically ask for Canadian grains and field crops. We want more comments like the one from a flour miller in Sri Lanka who said, "Regarding usage of Canadian wheat, we are happy to say that your wheat has become a must for us to keep up the product quality in most of our high-volume products." This miller, who was a participant in a Cigi program in 2014, also added, "We need to keep up the mutual knowledge exchanges to improve our volumes of business."

At Cigi, we deliver technical expertise, targeted training and innovative processing solutions for customers around the world — millers, bakers, pasta makers and noodle makers. We provide a unique Canadian experience in our one-of-a-kind facility in downtown Winnipeg where we have an analytical laboratory, a pilot flour mill, pilot bakery, pilot pasta plant and a pilot Asian noodle line, all of which replicate commercial processing conditions. Since 1972, we have welcomed over 40,000 participants from the 120 countries around the world. Most of our programming at Cigi is on wheat, with some additional work on food barley and pulses such as beans, peas, lentils and chickpeas.

Today I want to provide you with some background on why market access is so important for wheat.

Canadian farmers produce 25 million to 30 million tonnes of wheat every year. In 2013, we had a record crop of 37.5 million tonnes. Canada is the sixth largest wheat-producing country and the third largest wheat exporting country, exporting an average of 17.5 million metric tonnes each year. This is about half of the volume exported by the U.S. The value of Canadian wheat and durum exports in 2012 was over $6.1 billion. In the world market, Canada competes with the United States, the European Union, Australia and Russia.

Canadian wheat goes to over 70 countries around the world. There are two different kinds of wheat — one which we will call common wheat, because it is the wheat we typically think about; the other is durum wheat. Common wheat is used for various breads, including pan breads that are common in North America, baguettes, hearth breads, flat breads like tortillas, as well as other products such as instant and hokkien noodles in Asia. Major common wheat markets include the U.S., Japan, China and Indonesia.

Durum wheat is used for pasta, and couscous. Major durum markets are the U.S., Italy, Morocco, Algeria and Japan. Of course, our products go to many more markets, but those are the primary ones.

Senators, I have brought you a sample of a durum wheat product that has been made in our pilot mill. In that mill we can make all different types of pasta and noodles. We can also make extruded products like cheese puffs, but I thought the rotini would be a much healthier option for you today. That is made with Canadian durum, primarily from the province of Saskatchewan.

Each and every one of these markets is very important to the Canadian grain industry value chain. Here are just a few examples of some of the programs that we run to support the development and maintenance of markets for Canadian wheat.

We have an intensive training program for the millers from Saudi Arabia. We are increasing the capacity of Moroccan millers by helping them to establish a quality lab for training in Casablanca. We have extensive analysis of different varieties of wheat, on an annual basis, with one of the largest bakeries in the U.K. We are assisting Canadian plant breeders to quantify the quality characteristics that customers are looking for. We have an international grain industry program that brings together customers from key markets to learn about Canadian grain industry from farm to port.

One of our most important initiatives occurred last November and December, when the Canadian industry came together to provide customers around the world with technical information on the new crop of wheat. It was the first time we took a Team Canada-approach with the newly formed Cereals Canada, Cigi and the Canadian Grain Commission, or CGC, along with growers, to represent Canada on the world stage. Over a six-week period, we visited 20 countries and spoke to almost 1,000 buyers, millers, bakers, and noodle and pasta makers. The team presented them with information on changes in the industry, Canada's quality assurance programs and the quality characteristics of the new wheat crop. This was especially important to customers, given the difficult weather conditions that affected quality during the 2014 growing season.

Team Wheat Canada was very well received by customers and allowed us to answer their concerns and questions. One of the most common questions was: Can you assure us that you will be able to deliver your product on time, considering the transportation issues that occurred last year?

The reason I am speaking about Cigi programs is to impress upon you the importance of export markets for wheat and other field crops.

The work we do with customers on behalf of the Canadian industry value chain is very important, but in some countries our promotion of the Canada brand can be constrained by tariff and non-tariff trade barriers. These markets are not accessible for Canadian exports. The work that the Government of Canada does in market access is crucial to the value chain. These barriers can only be dealt with government to government, and so the work of the Government of Canada is critically important for the entire grain value chain in Canada.

In conclusion, our first ask is that the Government of Canada continue to vigorously pursue trade agreements with our major trading partners to ensure that Canadian farmers and the industry can provide our products freely around the world. We cannot be constrained by tariff and non-tariff trade barriers. The government should take a value-chain approach to reviewing market access issues and priorities.

We applaud the government for those agreements that have been negotiated and signed. We urge the government to continue in its current trade talks, through the Trans-Pacific Partnership and other negotiations. It is very important that agriculture be part of these discussions and negotiations.

In terms of sustainable improvements to the production capabilities of the supply chain and the competitiveness and profitability of Canada's agriculture and agri-food sector, which was a component that is listed in your study, one of the biggest challenges we face is transportation. We hear it from our end-use customers and the Canadian value chain. We must be able to provide our customers with the product they purchased when they expect it. We cannot risk having them go to a more reliable supplier.

The Government of Canada has taken some bold steps to deal with the transportation issue. I cannot comment on specifics because at Cigi we do not have a position on transportation, the policies, the system or the expertise, but I can pass on to you the comments we received from customers. They are very concerned.

I hope I have been able to provide you with some good reasons why market access is so critically important for our grain growers and the value chain in Canada. I applaud the initiative you have taken on this very important topic, and I look forward to any questions that you may have.

The Chair: Thank you.

Senator Tardif: Welcome once again and thank you for your excellent presentation of both the Cigi products and Cigi programs. Very impressive.

We heard from different witnesses about the issue of low-level presence and the fact that with new technological advances we can now find very low traces of a banned substance, which makes it practically impossible for Canadian producers to ship to countries that have a zero tolerance for such substances. What is the grain industry doing to help Canadian grain farmers deal with this new reality?

Ms. Buth: I agree with you that some countries have zero tolerance for any levels of a genetically engineered product. In some commodities, such as canola, the canola industry has taken a very proactive approach to ensure that in their major markets they have the approvals of those canola traits so that they can export to those countries.

Also, it means that a tolerance has essentially been set for the traits that have been approved in canola. For example, if you had canola in a wheat shipment going to those countries, it would not be an issue because the traits have been approved. However, in many countries where it hasn't been approved, low levels of something like canola or soy in a wheat shipment could create some serious issues.

The grain industry is a bulk handling system, so it is very difficult not to have low levels of another product within bulk shipments. But there has been quite a bit of discussion, as you have mentioned, Senator Tardif, about trying to develop a relationship with countries to get other countries on board for setting a low-level tolerance. It is similar to what you might do for a pesticide, where you would have a maximum residue limit, essentially.

There is considerable discussion, of course, about whether or not we would ever accept GMO wheat. Customers will ask us that question every year: Are you growing any GMO wheat? We say no and that the policy of the industry is that if we did, we would ensure customer choice so that customers could buy both GM and non-GM. Of course, that would be contingent upon your markets having a tolerance because we couldn't completely segregate the two crops, GM and non-GM wheat.

Senator Tardif: China and Japan are key markets for Canadian exports. What tolerance level do they have for GM crops?

Ms. Buth: If it was an unapproved trait, it would be zero. If it's an approved trait, then they allow a certain amount. As an example, the European Union is 0.9. That's the one I'm most familiar with for approved traits, and I'm not completely sure what Japan's tolerance limit is or China's. But, for China and Japan, of course, if it was unapproved, again it would be zero.

Senator Tardif: Does that pose challenges to your industry?

Ms. Buth: It does if, as an example, we had a canola trait that would be approved that wouldn't have approvals in those major markets.

Senator Tardif: Would that be an example of a non-trade barrier?

Ms. Buth: Non-tariff trade barrier, yes. So it is important that we don't focus solely on tariffs. Typically what happens, in my understanding, is that in trade negotiations the focus is primarily on tariffs. I think for the Canada-EU trade agreement there was a component on biotechnology, and it was not an easy negotiation. I'm not sure where we ended up with that negotiation, but the industry very specifically asked for biotechnology to be put on the table for discussions with the EU because of the zero tolerance policy.

Part of what comes out of those types of negotiations is the commitment to continue to talk, to have bilaterals, to look at whether or not there might be something that could be done in terms of shared reviews; that is, if a product comes into review in Canada, it has to be approved in Canada before it can be grown. It could be shared with the EU at the same time, whether it is reviews that are submitted at the same time. Also, there could be trust between the two systems so that countries could share the results of their reviews.

In terms of the canola traits that have been approved in the EU, their final recommendations were no different than the final recommendations that came out of the U.S., Canada and Australia.

Senator Tardif: Thank you.

[Translation]

Senator Maltais: Welcome, madam. We are happy to see a former colleague, especially a woman, in a position that is so important for our future exports. I have not changed my tune, Ms. Buth. We know that, because of our free trade agreements — as you have clearly explained as a result of your visits to a number of countries — in the next 20 or 30 years, Canada will be called upon to produce a lot more grain. Demand is great and a good number of countries need it in order to feed themselves.

Here is my question. Do you anticipate using new technology and will that be done with environmental respect for Canada's soils, meaning that our soil will not become infertile because of overproduction? In the quest for profit, it sometimes happens that we neglect some aspects of our production capacity. Is that one of your concerns in the long term?

[English]

Ms. Buth: Thank you very much, senator, for that question. I will start with your first comment. It is interesting that you say we will produce more cereals. I think that the goal is to increase yields, but the choice will be up to farmers because they will choose the crops that are most profitable and the crops that fit in with their rotations.

We have seen over the last 20 years a reduction in some crops and an increase in others. We have seen dramatic reductions in barley and oats, increases in canola, and slight decreases in wheat as well.

In terms of production of cereals, et cetera, we plan to produce more. The farmers will make those choices on the basis of what kind of returns they will get versus their input costs. If the world needs more wheat or more canola and they're prepared to pay for it, then there will be that shift.

When it comes to sustainability, especially sustainability on the farm, nobody is more concerned about sustainability than farmers because that's their livelihood. They need to ensure that their practices are not going to harm things over the long term. Most farms are passed down from generation to generation. It is becoming more difficult now, but farmers are very concerned about the practices that they use and the impact on soils.

We have made progress since the depression years, also called the dirty thirties, when there were tremendous amounts of soil erosion. It was actually a Canadian senator who drove the whole soil conservation movement in Canada. Tremendous changes were made to how farmers till their land. We have gone towards a system of zero tillage. There's very little summer fallow left in Western Canada, and most of the tillage is at minimum or zero. There is limited erosion of soils in Western Canada.

In terms of other practices, we have seen that the use of products like some herbicides will give farmers an advantage so that they can use them as a foliar product rather than a soil-applied product. We have really moved away from a soil-applied product where you would have to apply that product to the soil. Now it can be applied in fields where you know you have specific weeds.

Your comment is interesting. Of course, the world is demanding that we demonstrate that our practices are sustainable and that we are taking care of the environment. Quite a large sustainability initiative is being led by a joint industry/government group called the Grains Roundtable. It is looking at and documenting the practices that farmers use now and determining how they could do things better. It is a serious issue that farmers take seriously, and they're looking for improvements.

[Translation]

Senator Maltais: Thank you, Ms. Buth. I have one last question for you.

We know that, with free trade treaties, customs duties decrease over six or seven years on average. Is that a good thing or not, given the current weakness of the Canadian dollar? What advantages could our farmers get out of the current situation?

[English]

Ms. Buth: We would rather see them come off right away. Part of a negotiation is that perhaps we're not prepared to reduce tariffs right away. When you negotiate with somebody who isn't prepared to do that, there has got to be some give and take. We are not always aware of why we end up with a tariff being reduced over a period of time. It would be much more preferable to have the tariff disappear immediately.

[Translation]

Senator Maltais: I understand that, for you, the ideal situation would be to have none at all.

[English]

Senator Merchant: I was reading an article in the paper this morning about accurate labelling as a tool for consumers to make informed decisions. This was about a different product, but do you think that our labelling is adequate? When you are dealing with different countries, how specific do you have to be in your labelling? Do you think our Canada-EU agreement should or could influence our framework for GMO labelling?

Ms. Buth: In terms of labelling, we export primarily commodities. Something like a wheat shipment won't have a label on it, per se. You will have to provide assurances to customers that it doesn't contain certain things, and that's the role of the Canadian Grain Commission in terms of looking at what's in there, whether it's dockage or micro-toxins or something like that.

Labelling is important and is customer-driven. Hopefully, there won't be any issues in terms of shipments that cannot meet the customers' expectations.

One thing we need to do is constantly monitor customers to determine what is happening in their countries, what they are looking at, essentially getting market intelligence so we don't get caught unawares with something they might regulate in terms of a requirement.

Your comment on GMO labelling is interesting. I don't know if our free trade agreement with Europe would change any of that. Right now, Europe has specific conditions for the labelling of things on the shelf and for raw product going in as well.

I am of the view that you label when there's a health and safety issue or an allergen or where there's a material change in the product that the consumer needs to know about. I am not supportive of GMO labelling in end-use food products because there is no health and safety issue and no material change in the product because that's how things are approved. They're reviewed. So far the products that have been approved are essentially equivalent to the non-GM product, and they've been tested to ensure there are no allergens.

My response is that consumers have the right to know. If they're looking for non-GM products, they can purchase organic because organic has a limit. They say it's zero tolerance for GM products. If you want to say that the consumers need choice, well there is choice there. I think we need to stick to our principles in terms of labelling products on the basis of health, safety and equivalents.

Senator Merchant: This article was about the Arctic apple, and they were saying whether this will be a success or not will depend on the consumer. Are you saying, then, that everything is GMO other than organic?

Ms. Buth: Not everything is, but corn, wheat and canola, which are the three primary crops that have been genetically modified, are contained in a lot of different products. If we did put on a GMO label, you would essentially find that most products on the shelf would have contained GMOs because you get corn starch and soybean lecithin essentially in a lot of products.

Senator Merchant: There is a movement and consumers are very interested in gluten-free in Canada. Is that a world-wide phenomenon or is it more localized in certain countries?

Ms. Buth: There is some interest in Europe, but it's very North American.

Senator Merchant: What is it, exactly?

Ms. Buth: People will say that it's a fad of the rich. When you can afford to buy anything, you start to look at some of these fads that come out. It boggles my mind why the public is so driven to take what a celebrity says as essentially truth.

There was an interesting article in Maclean's recently that asked if Gwyneth Paltrow is ruining our health, because she has a quite a few health products and makes quite a few recommendations. It walks through why is it we're so fascinated with celebrities and why we are willing to take their word over another word.

Recently, "The Fifth Estate" did a good job of reviewing the book Wheat Belly and all of the fallacy and the incorrect information that's in Wheat Belly. The author starts off in the first paragraph or the first chapter of the book with a blatant error, saying that it's all because of GMO wheat. We have no GMO wheat. There is no GMO wheat on the market. When you know that, it puts into question the entire set of recommendations that comes out of there.

It goes back to the whole business of trying to provide consumers with good information, and it's difficult sometimes because you're trying to provide them with science information that's not always easy to describe.

Senator Ogilvie: Before I ask my question, I will comment on your last observations with regard to GMO. You handled it very well, of course.

I always find it fascinating that there isn't a plant harvested today that isn't genetically modified through the traditional breeding process, which is the wholesale transfer of genes across organisms. The so-called "genetically modified" involves often a single gene transfer, and in fact is far safer in terms of the change in structure of the organism than the hybridization of genetic character across various plants. That's just an observation.

The question I want to ask has to do with the concept of value-added products. I want to recognize that the wheat, grains and cereals we harvest are already a value-added product and that a great deal of knowledge and deliberate effort has gone into producing the plants and to harvest them and so on. For the purpose of my question, I'd like to consider harvested grain and wheat as the raw material. You've given us an example of a value-added product.

My questions to you are: First, what's the current percentage of our harvest in these areas that's being converted into higher value-added products in Canada? Second, what do you see as the likely growth in this area over the next decade?

Ms. Buth: I'm going to go back to the comment that you made first of all, Senator Ogilvie, that everything is genetically modified. I agree with you, and I think that it's too bad we didn't get the terms right, at the beginning, to talk about genetically modified and genetically engineered. You are so right that genetic engineering is so precise considering what we've done in terms of traditional plant breeding over the years which is not precise as all.

Thank you for your question on "value-added." It's a really tough one because we produce so much raw commodity product, essentially on the Prairies, that we're often searching for opportunities to add some value so that we can keep the jobs and processing at home.

I don't have the exact percentage in terms of what we currently add value to. Primarily what we do in Canada is — and my guess is that it's between 2 million to 3 million tonnes out of maybe a 20- to 25-million tonne crop — that it stays at home and is processed in flour. So that's our primary value-added, and that goes to flour millers across Canada. A lot of them are concentrated in Ontario and some in Quebec because it's closest to the population. We do have some value-added processing where that flour goes into bakeries and also into a pasta plant. We do a very good job in terms of value-added.

Especially when we are looking at exports, we have to get into those countries, understand what they're using the product for, and be able to produce it for their tastes, for cheaper than they would be able to produce the raw product or buy the raw product and process it there. Although we often look for value-added opportunities, it comes down to cost. In terms of exports, it's customer choice as well.

With some products, like canola, we crush quite a bit in Canada; about half the crop is crushed, so we're selling oil and meal, which is value-added.

To get back to the market access issues, we sell mostly canola seed to Japan because Japan has a very high tariff on oil and they're protecting their domestic crushing industry. Market access issues can come into some of the situations where we have a tough time selling a value-added product into a certain market.

We have a special project now on pulse milling. We're looking at milling chickpeas, lentils and also yellow peas into different flour products so that we can value-add and put those into specific products like a gluten-free bread or a pasta. With the rotini here, we actually produce a product with red lentil flour added in, so you get increased protein and fibre. The whole area of value-added and increasing food production is a difficult one.

Senator Ogilvie: Are you optimistic for the future in terms of potential increases?

Ms. Buth: I think there are some potential increases, but I wouldn't say they are dramatic or substantial.

Senator Ogilvie: Thank you very much.

Senator Unger: Again, welcome, JoAnne. It is great to see you. I very much know that you're enjoying your new role.

You talk about other countries being very concerned about Canada's ability to get our grains and exports to market. Given our situations in Alberta and, in particular, Saskatchewan, how do you provide assurances that we will be able to deliver on time and as expected?

Ms. Buth: Thank you for that question, senator. That question came up, as I said earlier, repeatedly on our new crop missions. The only thing that we could do was to indicate to our customers that the Government of Canada takes this very seriously and that there is a commitment to the grain industry to move product. Then we would describe the order-in-council requiring railways to move a certain amount of product and talk about the increasing capacity that the value chain has been working on in terms of the Port of Vancouver. Those were the types of assurances that we can provide.

You can't say there will never be a problem, because the problem last year was a combination of things: a huge crop, poor weather, competition with other commodities, et cetera. But we do tell customers that we're taking this very seriously and that, with the order-in-council, the government would be prepared to take action again if we did run into the same constraints.

Senator Unger: I guess that's all you can do.

In October 2014, the federal government announced an investment of $15 million to Cigi to support market development efforts and sales of Canadian field crops in global markets through customer education and training. Would you talk a bit about this initiative?

Ms. Buth: This is our bread and butter and the core of what we do.

Government funding through the AgriMarketing Program is very important. It matches the dollars that Canadian wheat farmers put into our programs.

We have a process that we go through when we're looking at market development. We're working primarily focused on what the customer is using for end-use products in their countries. We will first do an investigative mission where we will go into a country and meet with the millers, take a look at what the bakers and the noodle makers are doing and determine whether or not we think there are any opportunities there. If they are using, say, Australian wheat or U.S. wheat, we would like them to try some Canadian wheat. We arrange a technical exchange where they will come to Canada. With our pilot facilities, they're able to use Canadian wheat and see it go through the mill, maybe if they're from Asia making Asian noodles; if they're from North Africa making durum pasta products and couscous. It gives them an idea of the quality of Canadian products. We will then send a technical team back into the country — hopefully they have made a purchase — and work with them using the Canadian product there. We might include them on a new crop mission, and we continue to follow up back and forth, trying to make sure that they understand the benefits they will get from using Canadian products and that they continue to buy Canadian products.

That's what that government money is going towards, those types of missions that we do and the technical exchanges as well.

Senator Unger: Thank you.

Is there a way to measure your success, for example, if exports increase sharply? I know durum wheat is in great demand not only in the U.S. but also in other countries if you were to give examples, but how do you measure success?

Ms. Buth: Oh, Senator Unger, it's like you've turned the tables. That's one of the things we constantly try to do. Sitting on your side of the table, we need to make sure that government money is going toward valuable initiatives. It was always a question that I would ask as well. It's a question that we're going through right now in Cigi about how we measure our impact.

We can measure that in increased sales. What Cigi does is just one component, namely trying to influence a sale. We don't actually sell anything. So many other things can impact that sale, like the value of the Canadian dollar, transportation, what's happening in that country and competition with other countries.

Through a variety of means, we look at trends in exports. Are exports in a certain country trending up or down? Over a five-year period, is it continuing to trend up? We take a part of that "success," essentially.

We also look for anecdotal evidence. There's a philosophy out there in terms of measuring success that no measurement is perfect. We're looking for a body of evidence that we're having an impact, like developing a lawyer's body of evidence for a case. One of the things we're doing is collecting examples, like I mentioned in my presentation, from that Sri Lankan miller, that we want Canadian and we're buying Canadian. That's the type of evidence we're looking for.

At the end of the day, we want Canadian exports not only to continue to go up but also to be sold, if not at a premium, at a competitive amount to our competitors.

Senator Unger: I'm very supportive of the work you do, just for the record. I hope that we have other organizations selling other Canadian products worldwide, as you do. Thank you very much.

Ms. Buth: Thank you.

Senator McIntyre: Thank you for your presentation, JoAnne. As I understand, your institute provides services to the domestic and international field crop industry. In addition, as you mentioned in your presentation, its services include delivery of technical expertise, applied research and training programs. Could you elaborate further on the delivery of those services, please?

Ms. Buth: Certainly. In terms of technical expertise, we have remarkable staff with considerable training in food science and in analytical techniques, and also in practical areas like milling, baking and noodle making. One of the examples I like to use is we have a miller, Ashok Sarkar, who can go into a mill and, on the basis of the sound, can tell you where there might be problems in the mill. He has 35 years of experience and he's renowned around the world. When we go on technical missions, it's almost like having a hockey player on a Senate committee when you travel and everyone wants to talk to the hockey player. In this case, everyone wants to talk to our miller because he's the rock star, essentially, of Cigi and the industry.

Of course, we have other capable staff. Our staff often come to us with expertise in the industry. Our baker has commercial experience working in a very large bakery and they have the skills we need.

We really pride ourselves on our expertise because, at the end of the day, what are we selling? We're selling knowledge, and we need those people to have the knowledge and the expertise.

Our training programs are quite interesting. I mentioned the training of Saudi Arabian millers. We have had that program for four years and are heading into our fifth. It's through an association in Saudi Arabia. They see Cigi as an expert training area. It gives us the opportunity to train the millers using Canadian products so they will go back to their country and hopefully prefer Canadian.

We also have very specific training programs. We just finished what we call a combine-to-customer course with growers. Growers from across the Prairies will come in and take the course to learn about where their product is going. We take them through the mill and the bakery, and they see what's important in terms of the quality of the crop coming off the field. Those are examples of some of the programs we run.

Senator McIntyre: In your presentation, you were of the opinion that Canada continue to sign free trade agreements. As we know, there are currently 10 free trade agreements in force. We also know that negotiations are ongoing with several other countries or groups of countries. A lot of those agreements and negotiations concern activities related to the Canadian agriculture and agri-food sector. Do you have any countries in mind that Canada should sign a free trade agreement with? Have you targeted certain countries?

Ms. Buth: When we look at our export markets and where we need continued assurances so that we can continue to ship product, I think the TPP is a very important agreement that we need to be working on and we need to sign. We send a tremendous amount of product into Japan, China, Indonesia and other Southeast Asian countries, so the TPP is a priority.

If we can't go through the TPP and we're working on bilaterals, it should be Japan, China. We have some agreements in the South American countries; those have been important for us. The other market important to us is West Africa, North Africa and the Middle East.

Senator Moore: Senator Buth, it's nice to see you again.

I was looking at the briefing materials, and it talks about your institute having customers around the world. This follows up on Senator McIntyre's question. Is the institute that well known that similar bodies or countries come to Canada for your expertise and to try to solve an agricultural problem for them? Are we at that level?

Ms. Buth: They do come to us and we're probably better known outside the country than we are inside the country because we have these connections with customers around the world. They will come to us to help solve a problem that they might have with Canadian wheat.

As an example, they receive a shipment and it's gone through the mill; they've done the testing and they're having trouble in their bakeries. We will go to them or they will come to us in a case that's an issue where they're having trouble on the ground right there. They might send us samples. We will analyze those immediately and look at something like water absorption. Water absorption is really important in a bakery. They need to able to get the right amount of water absorption so the dough isn't too sticky.

Senator Moore: Would you send out your all-star miller to their location and make sure their equipment is functioning properly and see if it's not the Canadian wheat but perhaps they need to adjust other things? Do you do that kind of thing?

Ms. Buth: Yes, we do, but not on a regular basis. We try to target groups. For example, we had a request from a broker that sells a lot into West Africa, and the millers there were seeing inconsistencies from vessel to vessel or hold to hold and wanted to understand what was happening. He pulled together 30 millers from different countries within West Africa. We had a team go into Cameroon and spend two days with them and work through all of the analytical things, visit the mills and talk to them about what they were receiving and how best to use it.

Senator Moore: When your institute develops processes, do you have an inventory of intellectual property? Do you have patents on some of your systems or equipment? Is that something you do?

Ms. Buth: No, we're working with commercial equipment around the world, so we need to understand the equipment the customer is using. When we talk about innovative processing solutions, it might not sound so innovative, but it might be the way a mill is set up and perhaps an adjustment they haven't looked at.

Milling wheat is really complicated. Wheat's much more complicated than corn and soybeans and canola where the components are easy to just take apart.

Wheat has many layers. As you start to take the bran off and then you take the next layer off, you have to do something with the germ. Some countries will mill to a 60 per cent extraction rate, like Japan, because they want white, white flour; others will take it out to 75 per cent to get the maximum amount of flour from it. Some of the solutions we give them might seem very basic, but they're specifically designed for what they're doing.

Senator Moore: They are customized for them?

Ms. Buth: Yes.

Senator Moore: Thank you.

Senator Beyak: It's good to see you again JoAnne. The Senate's loss is Cigi's gain, and I know that the Canadians watching this at home have found your presentation exceptionally knowledgeable and informative.

I was impressed with your worldwide client list of people that you're training. Do you outreach to them? Is it word of mouth? Do you advertise? Could you elaborate a little more?

Ms. Buth: We do a lot of outreach. I talked about bringing them to Canada and having a uniquely Canadian experience. Unfortunately, sometimes that's February in Winnipeg, which they never forget.

When we do these investigative missions, we will work with, say, an association of millers within a country, and they will give us names. Our grain industry course is two weeks long. They spend a week in the Prairies, in Winnipeg and surrounding area, and then we take them through the Rockies and out to port to see the entire value chain. We will reach out to the companies we work with and ask them to nominate people.

We're quite well known. Once you've taken a Cigi course, when you come into our facility, all of the class pictures are along the hallways, like an honour hall of fame. Everybody that comes in that's never been there or comes from a company that has had somebody there will walk around and look to find their picture. I actually did that as well because I took at course at Cigi in 2001 on feed ingredients. When I came in, the staff were also looking to find my face in that class picture. We do quite a bit of outreach.

Senator Enverga: Thank you and welcome here. It's nice to see you again.

My question is more like a follow-up to Senator Unger's. It's about the support given by the federal government. Could you give us examples of the customer education and training initiative that Cigi has provided?

Ms. Buth: As an example, we would have a group of technical people come in from an analytical lab from a large company in China. The last group was six people who came in to learn about some of the technical capabilities of different pieces of equipment in other parts of the world. You can measure flour and its different qualities in different ways through three to four pieces of main equipment. I won't go into the names of the equipment, but in some countries around the world they prefer one type of equipment. We would train them on all pieces of equipment to show them there are other opportunities for them to look at the quality characteristics in different ways that they might be able to use in their end-use products.

Another example would be the Moroccan millers that we have right now. Beyond Agriculture and Agri-Food Canada funding, we have funding from the Department of Foreign Affairs and International Development. There is a development project in Morocco where we're working with training the millers in Morocco and in the quality control people in Morocco so that they can actually train other people within their country and within the region. We're helping them also set up an analytical laboratory. This last two weeks we had the analytical group in from Morocco, eight very talented women who run laboratories in different parts of the country, including the institution we are working in, and they are working through different projects within Cigi.

The group we had previous was very interesting because one of the projects we're trying to do is help them increase pulse ingredients to increase protein content in their products. They came in, were split into two groups and we asked them to develop a Moroccan product. One of them developed a pasta with a certain amount of red lentil flour in it, which increases the protein, and the other worked on pea flour going into a bakery mix, a bread mix that a homeowner could buy in Morocco and could then use in their traditional flatbread they were making. So they're going to take that knowledge back and try to start businesses in Morocco with those products.

Senator Enverga: As to providing all of this technical support, do you think technical support is enough to increase the productivity and marketability of our products? What else are we missing, from your point of view?

Ms. Buth: I think the technical support is really important. I could ask for more money, of course, because we are a small organization and compete with the U.S. Wheat Associates. They have 17 offices around the world, with over a hundred people in them. So for every country we go to, we are either following or ahead of U.S. Wheat Associates on our new crop missions, telling them about wheat.

It is very difficult for us to compete with that kind of outreach that is happening. In addition to their offices around the world, they have five different laboratories that support them in the U.S. The one in Portland, Oregon, tries to be like Cigi. We don't think they come close, but they do have that amount of support. You always hate to be asking for more money, but more money would be quite appreciated.

I just want to tell you, Senator Enverga, that we were very lucky to hire a miller from the Philippines. He came with his family to Winnipeg to have a better life and wanted his children, especially, to have a better education. He came and started in a low-paying job. When we advertised for a miller, he had run several large mills in the Philippines. We were very lucky to have him come to work for us. Actually, he's doing some additional training at the Swiss milling school so that he can continue his education and continue to do more work for Canadian wheat around the world.

Senator Enverga: Thank you very much.

The Chair: Honourable senators, as the clock is ticking, the chair will recognize one question from Senator Oh.

Senator Oh: Welcome back, Senator Buth. I am probably making more of a comment. I was travelling in China last year, and I went to the province of Shaanxi, where the diet consists mostly of dumplings and noodles. I was taken to this huge restaurant, a six-storey building that sold nothing but noodles and dumplings. I asked, "Where do you get your flour from?" Canada. They told me that, in the beginning, they had problems with the texture of the cut. In certain provinces, they love a certain texture of the flour. So I think you helped them to solve the problem.

Ms. Buth: Yes.

Senator Oh: They told me that now, everywhere in the province, they are all using Canadian flours, and the texture is right for the dumplings and the noodles. I want to thank you for that. You are helping Canada.

Ms. Buth: Thank you very much, Senator Oh. Actually, when I talked about the team, the analytical team that had come in from China, one of the things we worked with them on was how you measure the texture once you have a dumpling wrapper and the different methodologies that we can use to do that.

We all made dumplings together, with different classes of Canadian wheat, and sat down and had dumplings and rated the textures. One of the textures is Canadian hard red spring wheat, which is very strong wheat. If you think about biting into a perogy, it is very strong. That's not the texture they were looking for. We're looking at different classes of wheat for those uses.

The Chair: Senators, I listened, at the beginning, to Senator Buth saying one hour. With the second round, we could use the other hour, but we can't.

Do you have any closing comments on your side, Senator Buth?

Ms. Buth: Just that I think this is a very important study that the Senate is doing. The Senate has this remarkable ability to pull information from a wide variety of sources and witnesses, and the in-depth work that you do goes a long way to helping solve Canadian issues. I applaud you on this initiative and I look forward to seeing the report.

The Chair: Thank you.

As we conclude, I will always remember, as chair, when you brought to the committee the study on bee health. I would like to bring to your attention that the committee is looking forward, after Easter, to tabling it in the Senate of Canada. Thank you very much for appearing this morning.

[Translation]

Honourable senators, the committee will now hear from the second panel of witnesses.

[English]

For our second panel, honourable senators, we have, from the Consumers Council of Canada, Mr. Ken Whitehurst, Executive Director; and from the Consumers' Association of Canada, Mr. Myles Frosst, Advisor to President. Thank you for accepting our invitation to share your views, recommendations and opinions with the Senate Agriculture Committee.

I have been informed by Mr. Pittman, our clerk, that Mr. Whitehurst will make the first presentation to be followed by Mr. Frost, after which we'll have questions from senators.

Ken Whitehurst, Executive Director, Consumers Council of Canada: Thank you for inviting us here today. Normally, a volunteer member of our council, as we are a volunteer-driven organization, would be here. I'm the executive director. Being the time of year it is, there are a lot of people in motion, so I have been sent.

I'm pleased to provide some consumer perspectives gathered by the Consumers Council of Canada concerning your area of study. The council is one of Canada's most active consumer groups. As a national volunteer organization it brings consumer perspectives to public policy. For example, the council intervenes at the CRTC and the Ontario Energy Board. It represents consumers on the Consumer Association Roundtable of the Canadian Food Inspection Agency. Council members have been involved in informing decision makers and regulators around topics as diverse as payday loans, waste management, the condominium market, national building codes, energy labelling on appliances, home renovations and even online reputations. I think there might be some interest around this table about that.

All of us in the room are consumers, but we do not share the needs and experiences of every consumer. One of the challenges for a consumer representative is to set aside personal interest. They must try to try to help all consumers to better realize their rights and exercise their responsibilities in the marketplace, and that's what our members try to do.

Let me outline some of the expectations of today's consumers. Consumers value honest, complete and quickly accessible food information to support their decisions about health, safety and value. The council recommends to senators' attention the report of the Consumer Group Panel on Food Information, Labelling and Advertising available through the council's website. The report represents a rare collaboration of major consumer organizations on this topic.

Public views about what defines food safety are evolving faster than regulation. A well-educated public is engaged with science and new learning more than ever before. At the same time, they frequently receive biased information about food. Food communicators should avoid the temptation to complicate the situation with ambiguous marketing claims and acts of interpretive overreach of their own.

Consumers value the reliability of food supply and predictable fair pricing. Consumers have diverse views about the foods they should buy to meet what they consider their basic needs. Basic needs can be defined by health, lifestyle and values-based factors. Access to some foods may even be seen by some to carry Charter rights obligations.

The council sees strong reasons for makers of public policy to concern themselves with sustainability improvements to the domestic food supply chain. This will be especially important as consumers welcome food products from other countries into the marketplace. While a growing number of consumers, for a host of reasons, are concerned about Canada's ability to produce and supply its own food, others have not reflected upon the implications for themselves of Canada's dependence on foreign food. Most consumers accept on faith that Canadian supervision of the food supply will protect them. Safe, plentiful, affordable food is so central to national security expectations that we should expect that most consumers cannot comprehend a serious security breach.

The council believes that the introduction of licensing in the food sector is an essential step. Traceability of food is important to both food security and the ability to manage a food emergency fast to avoid public alarm and harm. Traceability and place-of-origin labelling may be a first line of defence for producers to void consumer shunning in a food safety crisis. Many consumers want to know supply chain information to support their right to choose, not just in an emergency but at all times. For example, consumer interest in the origins of food may represent a sales opportunity.

As our understanding grows of what it means to be human, ideas about what makes for a healthy and safe diet have become more personal and less generalizable. At the same time, consumers are discovering new foods as a result of Canada's cultural diversity, and they are excited to learn about, buy and eat them.

The agri-food industry could better respond to complex consumer needs with better, more complete and more accurate product information. Fortunately, the agri-food sector is adept, not inept, at using information technology to do its job, and we will get better at it of necessity to serve not only local consumers but also global markets. If a farmer can use an iPhone to run heavy equipment to plow, plant and fertilize, a concept demonstrated to me recently, farmers and others in the food supply chain can aggregate and communicate accurate food information.

There is cause for concern that most consumers don't understand the move to risk-based oversight and enforcement in the food sector. Even some in industry seem to be struggling to understand their new responsibilities. The language of risk management is counterintuitive to Canadians' understanding of individual rights as fundamental to citizenship. Even 99 per cent success in protecting Canadians will not remove the responsibility for failing to serve and protect every person. Also, the council is concerned that the models for risk-based regulatory oversight are a work-in-progress. It will be important to manage well the transition to risk-based food safety oversight.

However, even as the food safety regulators face this challenge, it is only fair to congratulate the Canadian Food Inspection Agency and Health Canada for their recent efforts to improve engagement with consumer groups and the public.

Let me turn to consumer interest in a sustainable agri-food industry. The council believes that Canadian farmers and food processors must earn a fair profit. I've already expressed concern for sustainable domestic food supply. Fair competition and reliable, efficient and balanced supply chains are good for consumers, but I don't have to tell you that that condition can be difficult to achieve. Canadian consumers largely have accepted policy tools, like supply management, in pursuit of food security and predictable food prices, but this was based on having capable and accountable consumer representation in the system. The council has observed the inadequacy of consumer representation in Canada's systems of supply management.

However, the good news is that fixing this problem is easier to do than restructuring industries. The council doesn't object in principle to having more nimble systems of regulation. The public expects responsive government in a world of change. All of us have better things to do than struggle with unnecessary or pernicious complexity when dealing with business or government. Life is too busy and too short. Regulatory flexibility should enable consumer protection and economic prosperity as mutually reinforcing objectives.

However, consumer representatives in regulatory reform processes require both access and capability to perform as expected. Towards that end, the Consumers Council of Canada appreciates the recent support of Industry Canada and the Minister of Industry to conduct its own study of options for a sustained institutional role for consumer organizations in internal trade harmonization initiatives arising from the agreement on internal trade. In fact, the council believes that putting consumers at the centre of internal trade reform thinking would be a good idea.

Thank you for your attentiveness to the consumer perspective. I welcome any questions you may have.

The Chair: Thank you.

Myles Frosst, Advisor to President, Consumers' Association of Canada: I will go off script for a moment and say "ditto." Very much of what Ken has said I'm certain would be applauded by the Consumers' Association of Canada.

Thank you for the opportunity to participate in your important and far-reaching study into international market access priorities for the agriculture and agri-food sector in Canada. Given the critical importance of the agriculture and agri-food sector to the Canadian economy, to innovation in this country, to the welfare of Canadians as consumers and otherwise, to consumers abroad, and to the long-term profitable and sustainable use of agricultural resources, the Consumers' Association of Canada applauds your initiative.

I personally have the honour to convey the views of the CAC as a volunteer on behalf of its president, Bruce Cran. For 65 years, the Consumers' Association of Canada has represented the interests of Canadians in their role as consumers of goods and services provided by both the private sector and the public sectors.

The CAC's mandate is to inform and educate consumers on marketplace issues, advocate for consumers with government and industry, and to work to solve marketplace problems in helpful ways.

I'm here because I have been asked to convey two pieces of advice to you today that pertain to the four focus points in your study. First, the Consumers' Association of Canada encourages you to recommend in your final report that it is high time to modernize the food and drug regulations with respect to the irradiation of meat products.

The second point I would like to leave with you is that the CAC also encourages you to recommend to the government to help facilitate a thorough review, an in-depth study, an airing of all concerns on the future of supply management in this country.

Turning first to the less contentious suggestion, albeit one that has been made numerous times over the last 15 years, and that's the irradiation of meat products. The problem is that the inability of the Canadian meat sector to use irradiation as an additional means of minimizing the risk of food-borne illness puts consumers at health risk more so than would otherwise be the case. It denies them the opportunity to purchase irradiated meat products available in the United States. It undermines both Canadian producers' and processors' ability to fulfill a niche market demand in the U.S.

The solution, a regulatory change, has been proposed by government, by CFIA and Health Canada, by farmers, the Canadian Cattlemen's Association, by processors, the Canadian Meat Council, by international bodies, the FAO, the International Atomic Energy Agency and the World Health Organization, and by numerous health professionals and scientists. In particular, I'm thinking of Rick Holley, who is a participant in the CAC.

Health Canada, through the Food and Drugs Act, is responsible for establishing standards related to the safety of food sold to the Canadian consumer. Among other things, it assesses the chemical, microbiological and nutritional changes that occur in foods during the irradiation process before approving the use of irradiation to ensure the safety and nutritional quality of food.

The CFIA, now reporting to the Minister of Health, is responsible for all enforcement and compliance issues relating to irradiated foods. It administers amongst other things, the labelling of irradiated products under the Food and Drugs Act and most importantly the Consumer Packaging and Labelling Act.

As long as ago as March 1998, the Canadian Cattleman's Association submitted a petition to Health Canada for the irradiation of meat. At that time it was very optimistic that approval would happen in a timely fashion. It was optimistic because in 1997, on the basis of extensive scientific studies, in the United States, the U.S. Food and Drug Administration approved the irradiation of red meat for the control of food-borne pathogens. The USDA, U.S. Department of Agriculture, which is responsible for ensuring that meat products are safe, wholesome and properly labelled, published its ruling in 1999.

Today, about close to 20 million pounds of irradiated meat product each year is consumed in the United States and over 35 million pounds of fresh irradiated products. Companies, processors and retailers like Wegmans have been offering their customers a choice with the added food safety benefit that irradiation offers for beef products, including hamburgers.

Meanwhile in Canada, we continue to wait and Canadian consumers are denied the choice. Why has the Canadian government not approved the irradiation of ground beef to allow consumers the choice of buying regular or irradiated beef?

In 2002, Health Canada gazetted proposals to allow for the irradiation of meat products. The Canadian Weatherill report in 2009 — you will recall that's the independent investigation into listeriosis — noted that irradiation has proven to be the single most effective method of eradicating bacteria and does not alter appearance, taste or texture of food.

The Consumers' Association of Canada commissioned a study to take the pulse of the subject of food irradiation early in 2012. The Angus Reid public opinion poll found that when Canadians polled in the survey were given a brief explanation of the process, 66 per cent said that they would support having irradiated food at the grocery store as a choice.

As few as 10 highly infectious E. coli microscopic germs can sicken and perhaps kill you. That's why some consumers are concerned and hope to be able to purchase irradiated beef. The manufacturing facility may be as clean as a surgical suite and the government inspected company can take extensive samples, yet we are still missing a kill-step for the pathogens.

If government food safety initiatives and oversight are risk and science-based in Canada, it is difficult to understand how the current impasse in appraising the application for extended use of food irradiation has occurred. In July 2013, Health Canada granted expedited status for the evaluation of a petition, again from the Canadian Cattlemen's Association, to use low-dose ionizing irradiation for beef, but there has been no meaningful progress to date.

So CAC encourages you to encourage the government to take the necessary steps for regulatory change and to allow for the irradiation of meat.

If that's not contentious enough, a much more contentious issue that I just put on the table here pertains to supply management. The Canadian supply management system — the producers, the processors and governments that make it work — is increasingly challenged by technological advancements in both primary production and processing of dairy products; rising quota values; growth in farm size and decrease in farm numbers; globalization of Canadian-owned and foreign-owned processing companies; increasing international trade capacity; and trade negotiations.

Add to those forces, consumer forces: consumer demand for high-quality and low prices; security of supply; greater diversity of dairy-based products; and the changing consumer preference for different categories of dairy product and other supply managed product.

I would suggest the time is ripe for a thorough review of the best public policy instruments to be used to meet the original objectives of supply management, i.e., enhancing competition between producers and processors — that's to say, providing balance in the dairy sector by enabling Canadian dairy farmers to act collectively to negotiate price and adjust milk production to meet consumer demand — provide processors with predictable and stable prices, instead of radical market fluctuations in primary product; and consequently provide relative income security for farmers and processors.

The various agri-food strategies currently forming part of the public discussion on the future of Canadian agri-food sector, that is to say of CAFI, the Conference Board of Canada, CFA, Food Secure Canada, all include reference to supply management. All are looking for some form of change. In the course of their work, all have tried to include the interests of Canadians in their capacity as consumers.

CAC would encourage this standing committee to champion an effort by these organizations to work collectively with government on a single national food strategy and, in the course of doing that, revisit supply management with consumer interests in mind.

So two points: one with respect to irradiation of meat, which has been on the table for a long time. It may be a function of lack of political chutzpah, I don't know, but it has not come to fruition. The second point is that consumers have an interest in supply management, either as consumers or as members of the economy. Supply management is under significant stress, so it's time to take a good look at it. To the extent that in the course of your work you can make recommendations to that fact or explore it further, so much the better.

Thank you very much.

The Chair: Thank you.

Senator Tardif: You've raised many important points. I'm not sure where to begin, but my first question would be to Mr. Whitehurst.

You made three statements all dealing with the regulatory process. You indicated in your presentation that food safety concerns of consumers are evolving faster than regulations, the risk-based regulatory process is a work in progress, and regulatory flexibility is needed. What are you getting at exactly by those three statements?

Mr. Whitehurst: We know that the model for food inspection is moving from being inspection based to being more process based, and we are moving the responsibility out to industry. Frankly, given the scale of the food system, that's a reasonable thing to do probably. However, we also are at a point in time where the risk models for doing this are pretty much in their infancy; they're pretty much still working on them. That doesn't mean they don't know a lot about risk. I'm not intending to be alarmist, but I'm saying that we are going through a transition. If you're out, whether you're hearing consumers or people in industry, a lot of people are still in the mindset space of, "Just tell me what the rule is and I'll work to the rule." It doesn't matter if it's a consumer or someone in processing

The fact is in a risk-based system that's not really how it works. You're entrusted with designing a process that's going to ensure an outcome, and someone's not going to tell you what the rule is. You ask for responsibility; you've been given it. That changes the whole game because now a lot of enterprises really need to decide for themselves what and how they're going to manage their risk and consumer risk. There are people who are struggling with dealing with that ambiguity. It's an unavoidable ambiguity. Even in our present system that has been more enforcement based there is actually ambiguity, but people have to understand it in a new way. That's going to give some people difficulty.

Senator Tardif: What would be the recommendation to improve the situation?

Mr. Whitehurst: I think you will need to have a transition period where you understand that people don't understand and where the models will be refined. You're not going to make, for instance, immediate cost savings by abandoning one method for another. You will need a period of time where you're really working both sides of the street and helping people through the transition and also helping public understanding through the transition.

As I said in my remarks, you can go to a food safety conference and everyone pats themselves on the back for how low the percentages of harm are. However, no individual in our society looks at the idea that "most people are okay but they aren't" as an acceptable standard, and they aren't going to through the legal system or anywhere else. Everybody has to grasp that and understand that there will be that tension. I think a lot of organizations have been happy to move the risk responsibility on to government. "I obeyed the rule, therefore the risk responsibility was the government's." It's now a shared responsibility. Everyone's going to have to embrace that. It's pretty much essential.

When we look at the question of licensing and traceability, there is a tremendous flow of food into the country today and the regime is not in place yet; nobody knows where it's coming from. In practical terms, somebody could go find out maybe where it's coming from, but not quickly.

These are really challenging, pragmatic problems that you have to solve to have a safe, global food supply. It doesn't mean we shouldn't have one, but we have to seriously recognize what it takes to have one.

I think this is one reason we're very focused on the information component, because to deal with issues in the global food supply, the information has to be excellent. Once the information is really excellent and that investment has been made, then maybe we can take a lot of dissonance in the marketplace out of the marketplace by just letting consumers have the information that drive their own judgments.

Their judgments don't have to be rational. None of you around the table make every purchase on a rational basis every day, but you like to have your own point of view about your buying decision respected. Information is an important part of that. People can know what they want know when they make a purchase without worrying about whether it's scientifically sound or whether Gwyneth Paltrow pushes for it, or whatever. People want to make a decision and they need information, and that's good enough.

Mr. Frosst: Consumers' decisions are a hell of a lot better when they are informed. Obviously the more information one has, the better.

When it comes to food safety and the move to a more risk-based or outcome-based regulatory approach, it is hard for a large number of consumers to comprehend the way in which that's moving.

The overwhelming majority of Canadian consumers is quite satisfied and confident and feels quite secure with respect to whether or not their food is safe. However, there are small groups of individuals for whom that is not the case.

I'm saying this based on 20-odd years working with industry groups, producers, processors and consumers. From time to time some components of the agri-food sector get together for the purposes of launching education campaigns in and around food safety. I have not seen — I could be wrong — a concerted effort on the part of the Canadian government, either through Health Canada or through Agriculture and Agri-Food Canada, working with consumer groups, of which there are a number and some of them won't see eye to eye, producer groups, processors and retailers, particularly the large retailers, to mount part of an education campaign in and around food safety. I'll push irradiation here. What are the various technologies that have been used or could be used? How do we go about it? Now I'm dreaming in Technicolor, perhaps, because this is something that would need to be done with the provinces as it's something that goes into the education system at an early age.

There's so much to feel insecure and frightened about these days. It would be nice not to be frightened or feel insecure about the way in which we are producing food.

Senator Tardif: That would be one of your recommendations for an education campaign around food safety?

Mr. Frosst: That would be one of my recommendations. I did not speak to Bruce or to anyone else at the Consumers' Association of Canada about it. I don't think there is a huge, diverse difference between CCC and Consumers' Association of Canada, but there are some other consumer groups for which there would be some reticence to supporting numerous technologies or ways in which we go about doing food safety, but you bring them in to be part of it.

Senator Tardif: Thank you. In the interests of time, I'll leave it at that.

Mr. Whitehurst: I was going to add one brief thing. The Consumers Council of Canada is very interested in working in the consumer information role. The problem is that there are no resources. The research we've done shows that on brand attribution alone, with what people infer on to a consumer organization, we would probably be as trusted a source of information that the Canadian public could have. Government is not really that trusted on these subjects these days for a lot of reasons. There are a lot of dissonant voices out in the marketplace. Likewise, the news media is contracting like crazy and isn't focusing on a lot of these issues anymore. They don't have the resources. Then industry definitely has a problem because they're both producing and marketing, and some marketing claims are a little outside the box. There is a need for a credible voice, but there is no way for the resources to flow for organizations like ours to do it.

I'll make one last point. Before coming to the Consumers Council of Canada, I was a very experienced global news manager. That's a big part of what I did, and I've also worked in financial services. So I have a pretty good idea of how information works. The truth is that the Canadian public is confident today. One big incident, and in 15 minutes they are not confident. It's that simple.

So you have to just accept that reality and say, "How do you strengthen the information environment so that people have a better chance to make reasonable decisions for themselves?" You have to do that. That's a key thing, and it doesn't exist today.

Senator Ogilvie: There are a number of things I could comment on, but I am only going to address one.

Mr. Frosst, you correctly identified a number of very critical areas, and I want to congratulate you on having the courage to bring forward forcefully issues that are, in my opinion, absolutely critical for Canadians.

I am going to comment specifically on the irradiation of foods. In fact, Canada's potential leadership in this area goes back to the early 1970s and the Whiteshell nuclear plant in Manitoba, where Canada was a world leader in developing the technologies to irradiate food successfully and to completely eliminate bacteria — microorganisms but bacteria was most concerning — from foods, especially from meats. That facility is now closed because of failed, in my opinion, political leadership to bring forward a technology that could have guaranteed Canadians absolute security with regard to bacterial contamination in foods, particularly in meats. I could do it more broadly with microorganisms in general, but I think Canadians are all aware of the fatal issues, the fatalities that have occurred in the last 50 or 60 years with regard to contaminated foods that didn't have to occur at all.

I consider this an example of Canadians being denied absolute food security in one specific area, with technology that has long been known and proven, and I consider it a failure on our part not to have been able to deliver that kind of security to Canadians.

I'm not asking you a question, really. I'm simply reinforcing, I hope, the point that you made, because this is an area I understand extremely well.

Mr. Frosst: Fine. Agreed. I'm not the expert on the science in and around this, but I would not want to leave Canadians consumers with a sense that if the meat has been irradiated, there is thus no chance that they will become ill as a result of the way in which they process the food or the way in which it's been handled. However, there's a lot of —

Senator Ogilvie: I was dealing specifically with bacterial contamination itself and during the period in which that food is packaged after the treatment. The handling of food in a consumer's kitchen or elsewhere in the restaurant is an entirely additional issue. I was referring specifically to the delivery of the treated product to an end point in that system.

Mr. Frosst: My comment would be: Hear, hear; agreed.

Mr. Whitehurst: This is a very challenging area in the consumer space, and it is a challenging public policy area. The senator's point about the fact that there won't be any bacteria in the meat when it comes off and is packaged is pretty sound, unless the packaging part, on the other side, is not clean.

Our experience with this issue has been is that when it's under discussion, whether by consumer groups or with experts in the room who are looking at the whole end-to-end process, a three-hour conversation ensues about all of the knock-on effects, what people's expectations will be out of the process because it's introduced. Honestly, very little of the conversation is about radiation, which is the hot-button point with some people. There are a lot of implications of making a decision like that in terms of consumer assumptions around value, what happens on the shelf when it hits retail, the very fact that food regulation, from the federal standpoint, ends once it's out the plant door but doesn't end for public health down the way. Some of the recent incidents we have had with bacterial contamination of meat have been in retail, and the contamination has happened at retail. Yet, there are people who are concerned: Will people feel assured about the product because a big campaign will be mounted that it's safe coming out of the plant?

I don't know what to tell you about this. The only thing I can say is that, even looking at the CAC's data and understanding the way consumer responses go in the marketplace, there is a large enough group of people out there — they don't have to be a majority — who will have serious concerns about this that taking that step could roil the food services industry quite considerably for quite some time. At that practical, common sense level that people apply, they are going to say, "We're hearing about lots people who still get sick from contaminated meat in the United States, where they have irradiation."

You're right to shake your head. It's simply hard to say, "How do you bring something like that into the process and have exactly the right effect?" That's what you have to think about from a consumer perspective. As we all know in dealing with markets that they are not as rational as we like to think they are maybe in the long term.

Senator Merchant: In the 1970s and 1980s, there was a federal department called Consumer and Corporate Affairs. I believe it was dismantled in 1993, and its responsibilities were delegated to different departments. I'm familiar with it because my mother-in-law was one of the regional directors. She had been in offices in Winnipeg, and I think they had offices in every province. At different times, she ran different offices.

What happened to that department? Is there a need for a federal department of consumer and corporate affairs? I think maybe the provinces each have a similar sort of set-up. Because of consumer interest these days — and consumers are very engaged in what they buy — is there a need for the federal government to have a special department to deal with this?

I know that, at that time, you could take your issues, your complaints, to the regional office. I know that people who worked in the regional office went to all kinds of trade fairs in the province and spoke to different organizations. There was a connection between the consumer and the federal government through these offices.

Mr. Whitehurst: Thank you for that question. I'll give it to you in layers because it's like an onion.

The fact that there is a CAC and a CCC starts with the elimination of that federal authority and the fact that it very generously supported consumer representation in Canada. It wasn't the whole picture; it also had to do with the way the provinces did the same thing. There were changes federally and provincially, and there was a change in expectation about how consumer representation would be funded in the country as we moved to more of a producer-pay model. On the producer-pay side of the things, the resources haven't come out of that model to support consumer representation.

The position of the council has been that there would be a benefit to having a federal consumer ministry, and I think it's been the position of every consumer group that I've encountered. That's based on the historic past, but the more important principle is whether or not in policy-making nationally and provincially there is a coordinated response to look at how consumer protection applies in every regulation.

Certainly, under Treasury Board regulations on impact assessment in the regulatory process, there is a requirement for all ministries to do a consumer impact assessment. It would be our estimation that this work has been done weakly, that consumers are under-represented in the process, and that there could be stronger consumer representation because consumer organizations need stronger resources in order to do third party, independent evaluations of these processes. Very much to deal with issues like the one raised by the senator, how do we bring more science, objectivity and other information into the discourse with consumers, and how do consumers conduct that discussion for themselves so they don't always feel that information is being spoon-fed to them by a government with an agenda or an industry with an agenda? Many intelligent, capable people are interested in these issues.

I look at our membership, many of whom have been consumer protection authorities. Don Mercer is from British Columbia and until his retirement was a senior official with the Competition Bureau. He knows a lot about competition and consumer protection. Today there are many third parties who could offer great input and help to bolster public confidence if they had more ability to do so.

Mr. Frosst: The only complication I would add is that I've run numerous consultative industry bodies where we always tried to put in a consumer rep of one sort or another. It's important for us to remember that most companies are trying to figure out what the consumer wants and needs. One should not forget that the industry itself has a lot to add on consumer needs and preferences, et cetera, not to leave the industry side out of the consumer ambit.

[Translation]

Senator Maltais: Mr. Whitehouse, in one of your recommendations, you mention the importance of labelling. I have some questions about that.

First of all, during the break week, knowing that you were going to be coming here, I conducted a little experiment. Last Thursday, Friday and Saturday afternoon, I went into some supermarkets. I watched families, mothers and fathers with their children, doing their groceries.

I can assure you that, of all the people I saw, not one of them was reading the labels. No one counted the number of peas or tomatoes in a package. I am not sure whether labelling is really important for most people. Very meticulous, food-conscious people, those with all week to do their groceries, may well take the time to read all the labels. But, for the vast majority, it is not their primary concern.

Secondly, you referred to irradiating food, meat in particular. When that started, you will agree that the first organization to complain was the Consumers' Association of Canada.

Today, it is still unproven. I am no scientist, but I listen to consumers as well. In Quebec, we have the Office de la protection du consommateur, a government agency that receives government grants. Its goal is to inform consumers, not individually, but at the level of the public, with reviews and television and radio advertising. I am not sure if it is a member of your association.

Mr. Frosst, since you mentioned supply management, I am wondering if you have taken part in general meetings very often. Do you foresee going to meetings of milk, cheese, beef, pork and veal producers to tell them that supply management is being abolished? I invite you to do so.

[English]

Mr. Frosst: In my capacity with the Consumers' Association of Canada, no I haven't. As the Executive Director of the Canadian Agri-food Marketing Council and as CEO of the Agricultural Institute of Canada, and when I ran the Sectoral Advisory Groups on International Trade and in a number of other capacities, I have worked with both dairy producers and processors and also from the other supply-managed side as well as beef — with pretty much the entire agri-food complex.

Please do not misunderstand. I was not in any way suggesting the abolishment of supply management at all. I'm not certain if that's where you were going.

[Translation]

Senator Maltais: That is what you said at the beginning. We should take another look at —

[English]

The Chair: Mr. Frosst, would you please clarify?

Mr. Frosst: Yes. Changes in the dairy, poultry and other supply managed sectors over the last number of years have put some pressure on both producers and processors. In the context of this work, I just wanted to suggest that because the Consumers' Association of Canada for many years has had an interest in the price, quality and quantity of product that comes from the supply-managed sectors, perhaps it is time to take a strong look at those sectors of which supply management is a key policy instrument.

[Translation]

Senator Maltais: You are aware that playing with supply management right now is like playing with an atomic bomb. Considering all the free trade treaties and considering our farmers, who represent tens of billions of dollars, whose employees are consumers, you have to be very careful if you are going to do that. You must not speculate on the fact that the Government of Canada may revisit supply management. There is no question of that for the government.

The Chair: Thank you for your comments, senator.

[English]

Senator Enverga: Your organizations are consumer advocates. What do you really advocate for? Are you advocating for consumer needs and wants or for good consumer prices or healthy foods? How do you balance those things?

Mr. Whitehurst: We represent consumers around a rights framework of consumer rights and responsibilities. That framework is a derivative from people's civil rights, so there's a set of values to do with choice, safety, right to information and right to redress. We're concerned about a fair marketplace.

Each consumer makes their own value decision, and we're trying to make sure that people can function fairly in that marketplace, taking into account their individual circumstances and what have you. So we are advocates for a proper environment in which people can participate in the marketplace.

We are concerned about prices, but we're mostly concerned about prices if they have to do with denying someone's basic needs. A lot of people have to make a lot of difficult decisions, and so we will look at that end of things. But are we writ large concerned about prices? We are in a general sense, but it is only one value among others. Our first objective isn't to drive prices to the mat; it is to make sure we have an economy in which there's fairness for consumers.

Mr. Frosst: The Consumers' Association of Canada is very similar in that respect.

Senator McIntyre: My question is a follow-up to Senator Enverga's.

Mr. Whitehurst, I know that your council is advocating for the creation of a charter of international consumers' rights. As I understand it, the charter would include rights such as consumer rights to safety, to choose, to be informed, and to privacy. Am I correct in this assumption?

Mr. Whitehurst: That's correct.

Senator Unger: Mr. Whitehurst, in listening to you I get the impression that really nothing is very safe to eat. As you can see, I have lived a long time and I feel I'm quite healthy. You said there is food flowing into Canada and no one knows where it is coming from. Would you please give me an example or two?

Mr. Whitehurst: I'm sorry, I was not trying to ring a bell of alarm. In fact, I think I made the statement that Canadians actually trust the food supply. They do on the basis of their personal experience, sometimes for good reason and sometimes not. A lot of people do get ill because of a food-borne illness and they don't even understand that to be the case. We know objectively that it is so.

I think the point is that there are lots of food imports and it is just a fact that the Canadian government hasn't known who all the food importers are. They don't have the ability to manage, to actually monitor every kind of food that is entering the country. Historically, even in certain food categories, they have never monitored what is in the food when it is produced in the country. But we have had a very strong culture of food safety.

Senator Unger: I just asked for a specific example.

Mr. Whitehurst: I think be we are all familiar with the time that product came in from China some years ago where there was melamine in the product. It's happened.

If I look at the other side of product imports, there's a stream of recalls that happens every day, for instance, around children's jewelry products.

This is not to single out any jurisdiction either. Lots of different jurisdictions can have their issues, including even areas that have been monitored, like fruit and vegetables coming in from the United States.

All I am saying is that if we are going to get to the source of problems and give the public confidence that the system is working, and if we're going to be able to be highly specific about where problems are so we don't cut off whole countries to trade, for instance, then we have got to know where the source of the problem is when it emerges and we need to know quickly.

The Chair: For clarity, the chair would like to inform the committee, the viewers and people present that we do have an office of consumer affairs with Industry Canada.

I would like to bring to the attention of the witnesses that if you want to add or if you feel that you should bring clarity to some of your comments, statements or recommendations, please do not hesitate to contact the clerk, Mr. Pittman.

Thank you very much to the witnesses. If you feel that you want to express any additional opinions as we go forward in the study, please do not hesitate to do so.

(The committee adjourned.)