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Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources

Issue 22 - Evidence, August 30, 1999 (morning meeting)


OTTAWA, Monday, August 30, 1999

The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C-32, respecting pollution prevention and the protection of the environment and human health in order to contribute to sustainable development, met this day at 10:10 a.m. to give consideration to the bill.

Senator Ron Ghitter (Chairman) in the Chair.

[English]

The Chairman: Welcome to the continuation of our study of Bill C-32.

Senator Hays wishes to raise a preliminary point.

Senator Hays: I should like to raise a matter of privilege with the committee. This morning I heard a report on CBC Radio. The reader, a Mr. McIsaac, said that I had indicated that I would be supporting the bill without amendments, notwithstanding what I heard before this committee.

Although I did give an interview to a reporter whose name I have forgotten, my recollection is that I did not say that. My inclination, which I stated at the time, and my inclination now as a supporter of the government, is to support the bill, and probably without amendment. However, I did not say that I would do so notwithstanding what I heard, which was the statement made in the news report.

That goes to my credibility as a person questioning witnesses before this committee, and I felt that I should raise that as a matter of privilege at the first opportunity.

I will follow up with the news organization and ask for a transcript or tape of the interview that I gave, or the basis of their reporting of my position, which is misleading and incorrect.

The Chairman: Your point is accepted and duly noted on the record.

Our first witness this morning is from the Canadian Institute for Environmental Law and Policy. Mr. Winfield has provided us with a very lengthy submission on behalf of that organization.

Mr. Winfield, you have obviously spent a considerable amount of time studying the issues before us. We look forward to hearing from you. Please proceed.

Mr. Mark Winfield, Director of Research, Canadian Institute for Environmental Law and Policy: The Canadian Institute for Environmental Law and Policy is an independent, not-for-profit environmental law and policy research organization. It was founded in 1970 as the Canadian Environmental Law Research Foundation.

The institute has been involved in the CEPA review process since its beginnings in 1993. In September 1994, we submitted a brief and five research papers to the House of Commons Standing Committee on Environment and Sustainable Development for the purposes of its review of CEPA. I was also co-author of briefs for the Toxics and Biotechnology Caucuses of the Canadian Environmental Network in response to the government's response to the standing committee's June 1995 report on CEPA. I was also co-author, with Mr. Paul Muldoon of the Canadian Environmental Law Association, of a submission to the House of Commons standing committee regarding Bill C-32 which was submitted for the purposes of the committee's clause-by-clause review of the bill in October 1998.

The primary focus of our work throughout the CEPA review process has been the question of the regulation of biotechnology products under the act, particularly things like genetically modified plants, animals, fish, micro-organisms and foods. That, again, will be the primary focus of this presentation.

We have distributed our presentation with background material on biotechnology that may be of interest to you.

I will make some brief comments on a number of other major issues related to Bill C-32, particularly with respect to federal-provincial relations, the role of cost benefit analysis and activities under the bill, the issue of residualization in the role of CEPA and Environment Canada, as well as virtual elimination of persistent toxic substances. It is important to consider those elements of the bill in addition to its specific provisions because, when considered together, they make it clear that the bill as drafted and passed by the House of Commons will have the effect of diminishing rather than strengthening the ability of the ministers of health and the environment to protect human health and the environment.

With regard to the issue of federal-provincial relations and harmonization, a number of changes were made to CEPA, first with Bill C-74, which died on the Order Paper in 1997, and now with Bill C-32, which is the version you have before you today. One of the most important changes was the addition of 13 clauses to the bill that require the minister to offer to consult with the provinces before taking virtually any action under the act. By our count, 13 clauses deal with everything from information gathering, guidelines and codes of practice, pollution prevention, priority substances, fuels, and international air and water pollution, to emergencies, government operations, aboriginal lands and economic instruments.

In the course of the report-stage amendments to the bill, the government amended those clauses further in a way that, in our view, appears potentially to have created a natural statutory duty to consult with the provinces before taking virtually any action under the bill. That could be a significant barrier to action by the federal government to protect human health and the environment. Therefore, we are recommending that those requirements for consultation should be made discretionary. We recommend specific changes to the clauses in question in order to achieve that outcome.

We are also concerned by the appearance of language related to cost-effectiveness, which appears in both the administrative duties section of the bill and in the preamble. It requires that any precautionary action taken by the government to protect human health or the environment be cost-effective. The effect of those clauses would be to introduce, for the first time in Canadian health, safety or environmental legislation, a requirement for a cost benefit test before any action can be taken to protect human health, the environment or public safety. That is a potential barrier to precautionary action to protect human health and the environment. Therefore, we are recommending that the word "cost" be deleted from each of those two clauses.

A third major theme that emerged in Bill C-32 is the question of residualization, in effect a downgrading of the status of CEPA from Canada's flagship environmental legislation to legislation that applies only when nothing else does. That theme was not present in the government's response to the standing committee's report, and it was not particularly strongly present in Bill C-74. In effect, clauses of this nature -- and we identify a number of examples of them in the brief -- state that CEPA will apply only where no other statute does. In other words, instead of being the first option where human health or the environment is concerned, it applies only in extremely narrow circumstances. A number of other clauses require the agreement of cabinet before any action can be taken by the ministers. That is also a significant barrier to action because it provides agencies like Industry Canada and Natural Resources Canada the potential to veto action to protect the environment or human health.

Thus, we are recommending that the bill be amended so that the possibility of action under another act of parliament does not preclude the possibility of action under CEPA and that in the event of a conflict between regulations and other measures taken under two different acts, the more stringent requirement would apply.

Finally, I wish to address the issue of virtual elimination, which has been of concern to the environmental community throughout the CEPA review process. The concern is that the definition in the bill before you will permit the continued production and use of what have been identified as the most dangerous substances in Canada, that is, those that are persistent, toxic and bioaccumulative. That contradicts recommendations from the U.S.-Canada International Joint Commission that have strongly emphasized the need to phase out the use and generation of those types of substances because if those substances are used or generated, they will inevitably find their way into the environment.

I wish to dwell on the subject of biotechnology a little longer. Biotechnology is defined in the existing act as the application of science and engineering in the direct use of living organisms or parts or products of living organisms in their natural or modified forms. That definition includes what is called traditional biotechnology, which includes things like traditional plant breeding, animal husbandry and the use of yeast in the making of beer and bread, but also, more important, what is defined as modern biotechnology which, typically, is interpreted to mean things like cloning and the use of genetic engineering. In effect, those technologies, and genetic engineering in particular, permit the movement of genetic material between species, something that does not normally occur in nature. For example, it permits the movement of genetic material between bacteria and plants, between animals and human beings or between plants and fish.

Modern biotechnology is undergoing a rapid commercialization in Canada. We have seen that a large segment of the current crops of canola and soya, for example, now consists of plants that have been genetically modified to be resistant to particular brands of herbicide. We are also seeing the rapid commercialization of crops such as corn and potatoes that have been genetically modified to generate their own pesticides.

Such developments are occurring in the context of a growing body of evidence regarding the potential negative environmental and health impacts of these products of modern biotechnology. There is a growing body of empirical evidence in this area that largely confirms problems that were theorized by ecologists in the late 1980s and early 1990s when these products first began to appear. Examples that we have seen in the scientific literature in the last couple of years have included the transfer of genetic material from genetically modified plants to wild near relatives and the negative impacts of pesticidal plants on pest populations and non-target species. There has also been work done that demonstrates the potential for the introduction of new proteins through genetic engineering into foods to produce allergic reactions. The classic experiment conducted in this area involved putting genes for Brazil nut proteins into soya beans, which was found to create an allergic reaction in people who had an allergy to Brazil nuts.

There are also concerns regarding the socio-economic impacts of modern biotechnology. Many people have raised questions about the value and purpose of many of the applications of the technology and questioned whether they serve the interests of farmers and consumers or those of multinational agri-chemical companies. These questions have been raised in relation to herbicide-resistant crops that have been genetically modified to be resistant to specific brands of herbicides. Many people have pointed out that that appears intended at least as much to secure market share for seed and herbicide suppliers as to serve any interests of farmers or consumers.

In the past couple of years, serious concerns have been raised about the effectiveness of the existing Canadian regulatory regime for biotechnology products such as it exists. Senators, I am sure, are familiar with the controversy over the approval of recombinant bovine growth hormone by Health Canada.

Regarding the pesticidal crops, the Canadian Food Inspection Agency is having to circle back for things that were overlooked when those matters were originally approved.

You will note that we mention in our brief that the agency has had to go back and impose additional conditions on pesticidal plants. Those are plants modified to generate their own pesticides in order to deal with the problem of insect populations that develop resistance when you expose them to pesticides through the plant, which is happening several years after the agency approved the commercialization of those pesticide products. At the time those products were approved for commercialization, these problems were well known and well documented.

It is also important to note that a significant range of products remains unregulated in Canada. Those products include things like genetically modified fish and animals and some aspects of genetically modified food.

It is also important to note that there are major debates now occurring in Western Europe about the value and the purpose of many of these products of modern biotechnology, and those debates are starting to emerge in Canada as well. Unfortunately, so far the Canadian federal government has sought to avoid these debates and, indeed, at the same time, has denied consumers the right to make choices about genetically modified food by refusing to require the labelling of these foods.

All of these developments suggest that Canada should be looking to strengthen, rather than weaken, its regulatory framework for products of biotechnology. However, a weakening of the regulatory framework for biotechnology is precisely what the government has sought throughout the CEPA review process.

The existing act, CEPA 1988, is the only place where Parliament has ever spoken explicitly about how products of biotechnology should be regulated from a human health and environmental perspective. Section 26 of the act requires that there be an assessment of the potential toxicity of these products -- meaning their potential immediate or long-term impacts on human health or the environment -- before they can be imported or manufactured in Canada. The existing act also provides that the assessment of toxicity may occur under another act of Parliament, by agencies other than Health Canada and Environment Canada, but, in our view, the act states that the assessment must be as stringent as it would be if conducted by Health Canada or Environment Canada under CEPA.

The House of Commons Standing Committee on Environment and Sustainable Development recommended the strengthening of this basic framework for the regulation of biotechnology in its CEPA review report, "It's About Our Health!" in June 1995. The government response, tabled in December of 1995, rejected that recommendation and proposed to eliminate the requirement in the existing act that all products of biotechnology be assessed for potential toxicity before they can be introduced into Canada. They proposed also to dispense with the requirement that the assessment of products regulated under other acts of Parliament be at least as stringent as that which would occur under CEPA.

In answer to the government's response to the standing committee's report, the Biotechnology Caucus of the Canadian Environmental Network made a submission to the government in March of 1996 in which it rejected that proposal from the government and made a recommendation that all products of biotechnology that may be released to the environment be regulated under CEPA by Health Canada and Environment Canada. The underlying concern was that many of the other agencies that might play a role as regulators, like Agriculture Canada and Fisheries and Oceans, were in a potential conflict of interest because they had made very profound institutional commitments to the development and promotion of precisely the biotechnology applications that they would also then regulate.

The House of Commons Standing Committee on Environment and Sustainable Development conducted its own study on the regulation of biotechnology, which it tabled in November of 1996, again recommending that the basic existing framework in CEPA be strengthened.

In December of 1996, the government introduced Bill C-74. It reflected the direction of the government response and proposed to permit ministers responsible for the administration of other acts of Parliament to determine whether their regulations met CEPA's requirement for an assessment of toxicity prior to the manufacturing or import of a biotechnology product.

It is also important to note that Bill C-74 proposed similar changes to the general new substances provisions of CEPA. That change had never been mentioned in the government response and, indeed, directly contradicted the Commons committee's recommendations on the issue.

As you know, Bill C-74 died on the Order Paper in June 1997, and Bill C-32 was introduced in March 1998. Its provisions dealing with biotechnology were essentially the same as those in Bill C-74.

In the course of its clause-by-clause review of the bill, the House of Commons Standing Committee on Environment and Sustainable Development amended the bill so that the ministers of health and environment would determine whether the regulation of biotechnology products by other agencies under other acts of Parliament was equivalent to the regulation that would occur under CEPA. In effect, they would have been given the job of determining whether or not what other departments were doing was adequate to protect human health and the environment. It is also very important to note that a government amendment to these clauses, which would have made the determination of the adequacy of the regulation of biotechnology products by other departments a decision of the cabinet, was defeated in committee on a recorded vote.

The standing committee also amended the preamble and administrative duties clauses of the bill to explicitly recognize biotechnology as a potential threat to biological diversity. That is consistent with Article 8(g) of the United Nations Convention on Biological Diversity. At report stage in the House of Commons, the government reintroduced and passed the amendment defeated in the standing committee, to make the determination of the equivalency of regulation under other acts of Parliament by other agencies a decision of the cabinet. The government also introduced and passed amendments that removed the references to biotechnology as a threat to biodiversity from the preamble and administrative duties clauses of the bill.

In conclusion, CEPA is the only place where Parliament has spoken explicitly with regard to how products of biotechnology should be regulated from an environmental and human health perspective. Section 26 of CEPA states that all products must be assessed for their potential toxicity, meaning their potential immediate or long-term impact on the environment or human health, prior to their import or manufacture in Canada. The government has consistently sought to weaken this one basic rule throughout the CEPA review process. The current provisions before you, as passed by the House of Commons, effectively leave the requirements for the assessment of biotechnology products prior to import or manufacturing entirely at the discretion of the cabinet. The objective test established by the existing act is, in effect, removed.

These provisions are the result of intensive, behind-the-scenes activities by agencies and departments of the government strongly committed to the promotion of modern biotechnology, particularly Agriculture Canada and Industry Canada.

In order to ensure the protection of the health and environment of Canadians, we are recommending two amendments to Bill C-32 in this area. The first would be to restore the provisions of the existing act, requiring that all biotechnology products undergo an evaluation of their potential impacts on human health and the environment before they are introduced into Canada. Specifically, clause 106(7) of Bill C-32 as passed by the House of Commons on June 1, 1999, should be deleted. Clause 81(7), regarding substances and activities new to Canada, should be deleted. That is the parallel amendment to the general new substances provisions of CEPA.

In the alternative, we are recommending that clause 106(7), as amended by the House of Commons Standing Committee on Environment and Sustainable Development and reported to the House of Commons by the committee on April 15, 1999, be restored to Bill C-32.

Secondly, we are recommending that, consistent with Canada's obligations under the United Nations Convention on Biological Diversity, Bill C-32 should be amended to recognize products of modern biotechnology as potential threats to the conservation and sustainable use of biological diversity. Specifically, paragraph 14 of the preamble and clause 2(j.1) should be deleted from Bill C-32 as passed by the House of Commons on June 1, 1999, and the words "products of biotechnology" should be added to paragraph 13 of the preamble and to clause 2(j) of Bill C-32.

That concludes my presentation, and I would be pleased to answer any questions you may have.

Senator Hays: My questions are premised on the update of what Bill C-32 represents in the evolution of Canadian law, moving from the Environmental Contaminants Act, 1975, through the 1988 CEPA to this bill. This bill represents an incredible amount of lobbying, parliamentary work, interdepartmental and government work and tens of millions of dollars' worth of time and effort to get to the point where this legislation can do all of the things that people who are concerned about the environment would like to see done.

Picking on biotechnology, the power under CEPA, at least according to Professor Leiss, is premised on the criminal law power. He referred to the 1997 Hydro-Québec case, and he quoted parts of that decision in his presentation. It strikes me that this is a tool to deal effectively with toxic substances, or inherently toxic substances -- I am not sure what the difference is -- but not a bill to regulate such things as biotechnological developments. In other words, the bill provides for putting a biotechnology product on the list, for identifying it as toxic. For example, we should not use genetically modified peas because they are inherently toxic and are therefore prohibited. They are put on the list and we will seek their virtual elimination. That is a very awkward way to deal with biotechnology.

My point is -- and I would certainly admit to a bias here -- that we may see some benefits in terms of biotechnological developments. They should be regulated, but we should not have a digital on-off switch saying when we identify a substance either it must be eliminated or else it is fine, and then allow whatever department or whatever private sector is involved in development to carry on with it. Perhaps you could comment on that.

Mr. Winfield: In the bill there are two streams dealing with toxic substances. The one that deals mostly with virtual elimination is really drafted to deal with existing substances. The bill's toxic section tries to establish a structure for going back and looking at chemicals that are currently in Canadian commerce. It tries to identify those that have the properties of persistence, bioaccumulation and inherent toxicity -- that latter term refers to certain toxic properties -- and then target them for virtual elimination. That is mostly conceptualized in terms of existing chemicals.

The biotechnology part of CEPA, both in the original act and in Bill C-32, is an outgrowth of the other stream in the bill for toxic substances, which deals with new substances. The original act established a requirement for anything that is new. All the biotechnology products, by definition, fall into the category of being new. They are not on what is called the Domestic Substances List, which is essentially a list of things that already exist in Canada. They are in the new substances stream, which is a somewhat different stream. The original CEPA set out a structure for screening those new substances for whether they are toxic, as defined by the act, or whether they have the potential to be toxic.

What the bill does for new substances is different. If the minister makes a finding of toxicity or a suspicion of toxicity, the bill then gives the minister the power to impose controls or even prohibitions on those substances before they even enter Canada. It is essentially a preventive measure and a very important piece of the act. That is the stream for biotechnology products and new chemicals.

Our concern with Bill C-32 in this regard is that it actually steps backward from what is in the existing act, in that the existing act set out very clear rules about what had to happen with anything new in Canada: There had to be an assessment of essential toxicity before a product could be manufactured or imported. In effect, Bill C-32, through clauses 106(7) and 81(7), provides a mechanism for exemptions from that basic requirement completely at the discretion of the cabinet.

Senator Hays: But the exemption puts it under a different department or ministry, such as the Department of Health or the Department of Agriculture.

Mr. Winfield: Potentially. There is a double-layered concern. The first is whether it is appropriate for those other agencies to be acting as regulators, given their role as promoters of the technology. The second concern is that the existing act, as we have read it, provides a benchmark in terms of the standard of care that must be taken by those other agencies when assessing new products.

Senator Hays: You do not see this as a red light, green light situation.

Mr. Winfield: No, it is not.

Senator Hays: Do you see the ministers of environment and health regulating biotechnology?

Mr. Winfield: Yes. The route through which biotechnology products would be regulated under CEPA would be by way of a finding of toxicity or potential toxicity through the new substances assessment process. Once something is found to be toxic or suspected of being toxic, then the ministers have the potential power to impose conditions or prohibit the substance. It is discretionary on their part whether they choose to exercise that authority. The finding of toxicity simply provides the foundation for the authority to act. It is still their discretion as to whether they exercise that authority.

Senator Hays: Correct me if I am wrong. Let us assume a product of biotechnology enters into use. If it is toxic, then I see the ministers of environment and health dealing with it as a toxic substance.

In terms of the regulatory approach to how we ensure a product is developed without creating a toxic substance and how we create a beneficial product -- that is, increasing productivity and increasing the health aspect of the product -- is that not something that the Minister of the Environment and the Minister of Health are suited to deal with? That properly falls under agriculture because biotechnology, I think, is most associated with that. What is wrong with that?

Mr. Winfield: A number of layers of concern have been laid out in previous briefs. There are many reasons why we and representatives of civil society, consumer organizations and others have expressed concern about this.

One concern regards the potential for conflict of interest of agencies like Agriculture Canada, for example, which has a profound institutional commitment to the promotion of this technology. Some real questions have been raised about whether the department already has been too hasty in its approval of the commercialization of some of these products.

The department is now having to circle back and impose additional regulatory requirements and do basic research that, in my opinion, should have been done before commercialization was approved. The case of pesticidal plants is an illustration of that.

Second, there is an issue of basic institutional mandates. The basic mission of Environment Canada and Health Canada is the protection of human health and the environment. Agriculture Canada and other agencies have more mixed mandates that seem very strongly oriented toward the service of industry client groups as opposed to the broader public interest and the protection of public good.

The third issue, which others have raised, is whether the legislation under which agencies like Agriculture Canada and the Department of Fisheries and Oceans, for example, would purport to regulate biotechnology products actually provides the appropriate authority to do so. Agriculture Canada, for example, conducts its evaluations of genetically modified plants under the Seeds Act. The Seeds Act makes no reference to the environment, human health or the protection of biological diversity. Indeed, we have gone on record saying that, at a minimum, what they are doing is legislative amendment through regulation, something that both the House of Commons and the Senate have frowned upon very strongly.

Those are some of the reasons we have expressed this view. Our view has been that, at a minimum, the basic rule needs to be maintained, that there be some sort of requirement for assessment and that Parliament set a clear standard of care to be taken in the assessment.

Senator Hays: Given the constitutional basis of this legislation, as stated in the 1997 decision involving Hydro-Québec, which is often quoted, and given that its basis is in the criminal law power, is this the way to regulate? Do you think that this bill has the constitutional basis for regulating in the way that you think those ministers should regulate such things as biotechnology, given also that agriculture is a concurrent power under the Constitution?

Mr. Winfield: The concurrency issue is not a problem. As you know, the rule is that in areas of concurrent jurisdiction there is also a rule of federal paramountcy.

The other issue that we raised in the original research papers we did for the CEPA review in September 1994 was that the federal government actually had jurisdiction to regulate products of biotechnology and new substances in general more as a function of the new subjects test under the peace, order and good government power in section 91 of the Constitution Act. In our view, the regulation of biotechnology and new substances generally met the tests of distinctiveness and boundedness set out in the Crown Zellerbach decision and also clearly met the test of provincial incapacity -- the notion that certain things simply would not work if you tried to do them on a province-by-province basis -- which the Supreme Court set out in Crown Zellerbach.

In our view, the assessment of substances that are new to Canada fit into that category very well because if every province had its own individual assessment process and one province failed to do its job, then the purpose you are trying to achieve, which is to assess things before they enter Canada, would be defeated.

Therefore, in this particular aspect of CEPA we felt that there are other constitutional bases for federal jurisdiction.

Senator Hays: We get into a rather complex area in terms of the various heads of power or residual powers that might be used for Canada, as opposed to the provinces, to enter into regulation of a particular sector -- biotechnology, for example.

On legal grounds, I guess you might convince the Supreme Court to allow the federal government to do a full regulation of biotechnological developments under CEPA. I suspect that it would be vigorously opposed by the provinces. I know the work that Innovation Park in Saskatoon is doing on biotechnology. I suspect the province would be very jealous of some of the things that are happening and that it is trying to promote. It is not only Agriculture Canada but the whole industry that is trying to become more efficient and productive in response to falling commodity prices. I suspect that having the Minister of the Environment and the Minister of Health regulating that would cause some practical problems in addition to the legal problems. You have shown a way around it, in your view, but I am not sure that there would not be some vigorous arguments against that.

Mr. Winfield: It is interesting to note that only one province, Alberta, has established any specific legislative authority to regulate biotechnology products at all from an environmental and human health perspective. In fact, when I was involved in the consultations with Environment Canada over the development of the biotechnology regulations under the existing act, the response from the provinces at that stage certainly was not that this was an invasion of their jurisdiction. Their reaction was actually quite the opposite: "Is that all you are going to do?"

They were expecting the federal side to be much more active in evaluating these things. The federal government had conceived that it would evaluate the products at the point of entry and assumed that the provinces would regulate particular uses, as is done with pesticides. The message that came back during the consultations at that stage was that the provinces would prefer that the federal side do more. In fact, at the provincial level at the moment there are mostly gaps and head-scratching as to what to do with this. I have seen no evidence of a jurisdictional challenge so far.

Senator Taylor: I was interested in Senator Hays's continued exploration of federal-provincial conflicts. Senator Nolin asked some very good questions in that area last week. As a result of the Quebec case, it seems that the federal government can prohibit but cannot regulate without the provinces. Your brief seems to say that the federal government has the right to use the iron fist if necessary.

You mentioned residualization. Presently, if a department does not have equivalent or better environmental rules, CEPA would apply, but it gives the department the right to carry the ball before control is taken away. Given our system of government, is it not better to require the departments to bring themselves up to environmental levels equivalent to or better than CEPA rather than the other way around? I gathered from your statement that you think CEPA should have the right to regulate within the different departments.

Mr. Winfield: The biotechnology and new substances provisions are good examples of where CEPA would not even establish a standard that other departments must meet before it stands down. The way the bill is currently drafted, CEPA applies only where there is no possibility of action being taken by another department under another act of Parliament. In our view, that downgrades CEPA too far.

We have recommended leaving open the possibility of action being taken under CEPA or under another act of Parliament, and then simply making a rule that says that if the action under the two acts conflicts in some way, then the more stringent requirement in terms of the protection of human health and the environment would be the one that would trump.

Senator Taylor: I have had more years in opposition than I have had in government. However, from my understanding of the way government runs, it would seem to me that that would not work. Government always loathes making one department the tough one with everyone else having to measure up to it. I think the same type of rule that applies between the federal and provincial governments applies to a certain extent between departments.

From where in the bill do you get the impression that CEPA is the weak sister that does not have the right to move into the department if there are not equivalent or tougher regulations?

Mr. Winfield: We cite a number of examples in our brief. The strongest examples are the ones I have mentioned that revolve around new substances and biotechnology products. We cite other examples under the heading "Residualization." Clause 76, which covers the status of substances that are prohibited or substantially restricted in other jurisdictions, states that nothing can be done under CEPA if the substance is regulated under another act of Parliament. There are similar provisions in clause 93(4) regarding the regulation of substances that are determined to be toxic for the purposes of this act; in clause 115(2) regarding the regulation of the transboundary movement of biotechnology products; in clause 118(2) regarding nutrients; in clause 200(2) regarding environmental emergencies; and in clause 210 regarding federal lands and operations. All those clauses say that nothing can be done under CEPA if there is a potential for something to be done under another act of Parliament. Those clauses cover what seem to us to be quite significant areas.

Some of the worst of the language around this issue was taken out by the standing committee in the House of Commons. However, a number of those clauses remain in the bill and are of concern because they add yet another barrier. We are trying to highlight the degree to which this bill raises a series of barriers to the possibility of the ministers of health and environment taking action to protect human health and the environment. This is yet another set of hurdles that must be overcome in order for anything to be done.

Senator Taylor: I still think you are spotting a bogeyman under the bed here. CEPA is clear. For example, clause 330(3.1), which refers to a regulation made under sections 93, 140, 167 or 177, states, in part, that it:

... may be made applicable in only a part or parts of Canada in order to protect the environment or its biological diversity or human health.

Not only does CEPA provide the right for the minister to go in to ensure that departments are up to snuff, it also gives the power to the minister to go into areas of Canada to make rules. Outside of giving them a power similar to a jackboot mentality, I do not see that you people should be as concerned as you are. However, you are, and there is not much that I can do about it.

Mr. Winfield: Clause 330(3.1) raised another kind of question in the House of Commons committee. A number of members questioned whether it was appropriate to have standards that are applicable only in parts of Canada, given the national nature of the legislation. That was something the government felt it wanted to pursue. In that case, there was a concern that it was granting too much discretion in terms of the application of regulations, which meant you could have some things apply in one place and not in another. The whole idea of an ideal CEPA is to provide some sort of national consistent level of protection across Canada.

Senator Taylor: I beg to differ. A regulation limiting gasoline lawn mowers in downtown Toronto because of pollution is very different from trying to regulate them in Norman Wells in the Northwest Territories where there may be only two in town. One of the faults of our environmental regulations is that they tend to use point pollution rather than area pollution. That is one area in which CEPA really moves ahead.

We have the same thing in Alberta with natural gas plants. With a couple of plants every half dozen townships, there is no trouble. However, if there are a couple of plants every mile, then there is a big problem.

That is my interpretation of the bill. I think CEPA is well structured in that regard. The fact that it gives the right to go in and do areas as well as departments is good enough for me.

Senator Cochrane: You said that in the event of a conflict between a regulation made under CEPA and a regulation made under any other act of Parliament, the more stringent of the two prevails. Why should a regulation under the Fisheries Act, for example, prevail if the Minister of the Environment and the Minister of Health see no health or environmental reasons for a stricter regulation?

Mr. Winfield: The intention of the recommendation is to ensure that the stronger standard always remains in place. It is precautionary. It is intended to ensure that, in the event of a conflict, the conflict is always resolved in favour of protecting human health and the environment. If there were a stronger standard in place under the Fisheries Act, for example, then that would not be undermined by some change that happens to be made under CEPA. That is essentially the outcome we are trying to achieve.

Senator Cochrane: Would you maintain that position even if the Department of Health and the Department of the Environment said that everything was fine?

Mr. Winfield: In this case, the implication would be that the Department of Fisheries and Oceans would be disagreeing with that view and saying that a higher standard of protection was required, presumably to protect fish and fish habitat. From our perspective, certainly, we would want that view to be the one that prevails because it is the one that is more protective. That is consistent with the overall goals that we envision for the legislation.

Senator Cochrane: Mr. Winfield, in regard to the term "virtual elimination", you would like to see a cessation of all toxic substances; is that correct?

Mr. Winfield: No. What we are saying is that those substances that are targeted for virtual elimination, which would be a relatively small sub-class --

Senator Cochrane: Are you talking about those three?

Mr. Winfield: Currently, about 13 of the 22,000 substances on the Domestic Substances List are seen as potential targets for virtual elimination. It would work on the basis that to be targeted for virtual elimination, a substance would have to have certain clearly defined properties for persistence -- that is, it lasts in the environment and it bioaccumulates, which means that it gathers in the fat tissues of either animals or humans.

It would have to have toxic properties. For example, it would have to be a carcinogen. If substances meet those criteria, then they should be put on a track to virtual elimination, which would mean, as we are recommending, the cessation of the deliberate manufacturing or use of those substances.

That is consistent with the U.S.-Canada International Joint Commission's recommendations in its annual reports on water quality for the last decade under the U.S.-Canada Great Lakes Water Quality Agreement, that, for this very specific class of substances that are recognized as the most dangerous, that is the route we need to follow.

The original 1993 Red Book platform from the Liberal Party said the same thing: there needs to be a phase-out of the use of the most persistent toxic substances.

The concern is that, as long as you allow these substances to be made and to be used, then their entry into the environment is almost inevitable because of accidental releases and releases in the course of production, and there will be occupational exposure to workers in the plant.

The route that is seen as best is to eliminate them, but we are only talking about a subclass of substances. Not everything is toxic.

Senator Cochrane: What is your group's relationship with CEPA in regard to those toxic substances and the evaluation of those toxic substances?

Mr. Winfield: In relation to CEPA?

Senator Cochrane: When these substances are being evaluated, are you there at the table? Do you have a large input?

Mr. Winfield: No. We actually have no input. One non-governmental organization was involved in the process of identifying the substances for something called the Priority Substances List, which is the list of substances that are already in commerce and are to be examined again to determine if they are toxic, but the actual evaluation process is something that occurs inside the federal government and over which we have no direct influence.

That may or may not be a good thing.

The same thing occurs when new substances are being evaluated. In fact, we do not even know that substances are being evaluated. The only time you know that something new has gone through the system is if you see it appear on the Domestic Substances List, which effectively means it has been approved, or if you see an order being published imposing some condition or prohibition. However, the actual assessment process is completely closed, particularly for new substances. We do not even receive notice that an assessment is happening.

We have some role in identifying the substances for the Priority Substances List, but we have no direct role in the actual evaluations.

Senator Chalifoux: This bill is intended to promote public participation and to provide access to information, and there are numerous provisions for that in this bill. For example, the bill requires that the minister establish an environmental registry of information such as proposed regulations, policy, et cetera. Would those provisions not help you in participating in the review of this bill? I see this bill as a living document that must be reviewed continually, and the bill provides for that. Would that not help you?

Mr. Winfield: There is certainly no question that the notion of an environmental registry is a very good idea. It is something that we have been having a lot of experience with in Ontario, because there is such a registry established through the Environmental Bill of Rights. It is working very well. It provides a powerful window on what the provincial government is doing in respect of the environment.

The basic idea is good, and Environment Canada could establish one even without Bill C-32, if it wanted to do so. The real questions there are: What goes on to the registry, and what form will it take?

Some very interesting things have been going on with the Ontario registry, now that it has been modified into essentially a searchable database. You can look up various things and see what is happening. This starts down that road, but there are a number of instruments under the bill that would not automatically go on to the registry. That is different from the Ontario situation where any kind of legal instrument -- an approval, a control order, anything the ministry does -- goes on to the electronic registry with a minimum 30-day public comment period. It is a very powerful tool and a very good idea.

Senator Chalifoux: You are saying that it could happen without this bill, but would having it included in this bill not give it more clout?

Mr. Winfield: It would not hurt, but one must look at this bill as an entirety, as opposed to having, here and there, specific provisions that are potentially quite useful. The problem I and other members of the environmental community have with this bill is that, as we look at the overall package, we see that those few particular places where there is forward movement are just overwhelmed by the backward movement in other places. That is what led many of us to this very difficult view that the bill should not be enacted in its present form.

Senator Chalifoux: I have another question. Pollution goes both north and south. Our neighbour to the south has a number of acts that have been enacted between their separate states and their national government. Do you see this bill comparing to that situation? We have to have some good comparisons and good dialogue with our partners.

Mr. Winfield: This bill compares very weakly with the equivalent legislation in the United States. The only place where this bill comes close is on the new substances provisions of the existing act, which are, in some ways, better than the equivalent provisions of the Toxic Substances Control Act in the United States.

With that exception, the fundamental difference between the U.S. federal legislation and CEPA is that U.S. federal legislation, such as the Clean Air Act and the Clean Water Act, sets out, clearly and specifically, certain goals, targets and activities that have to be undertaken by the U.S. Environmental Protection Agency by certain deadlines. They provide much stronger tools to citizens to enforce them. As a result, what you get at the federal level in the U.S. is a relatively complete framework of baseline regulations for air pollution, water pollution, and hazardous wastes. The states are allowed to go beyond those standards if they want to, and a number of states have done some very creative things in that way.

In Canada, by contrast, CEPA legislation establishes enabling powers for the federal cabinet to make standards under certain circumstances, but does not actually require that very much really be done. It is enabling legislation as opposed to the U.S. legislation, which is quite prescriptive in saying there will be, for example, standards set for incinerators by such and such a date. That has rolled forward and is playing out now with the U.S. federal government as it currently works on new standards for smog; those standards are being driven by the provisions of the Clean Air Act that say that the EPA must do what it has to do by a certain date.

This bill has a very different structure and in our view it leads to a much weaker baseline regulatory framework at the federal level.

Senator Chalifoux: I find that interesting, because I have been hearing about the terrible environmental situation in the Carolinas with regard to their hog producers. The water pollution is terrible there. The environmental laws do not seem to be able to address the problem. I find it interesting that in your comparison Canada fares poorly, because from my experience in areas such as Alberta I can tell you that our legislation goes far beyond theirs and that such pollution is not allowed.

It is also interesting that here in Canada, in this Senate, we established the issue with respect to rBST, whereas the United States had already approved it and were using it.

I think you have to bear in mind that we are a young country. After all, Canada is over 100 years younger than the United States; so in my opinion this bill is a good beginning, especially when we have the five-year review.

Mr. Winfield: With all due respect, senator, looking at the overall comparison of the U.S. federal and Canadian federal regimes, we are in a much weaker position, particularly with respect to toxic substances. CEPA, as drafted here, might provide some authority to do something around hog farming, for example, because of the nutrients provisions, but that is an unusual case. In other areas, particularly air pollution, that becomes very clear.

In the U.S., a process of standards for toxic substances is being developed and implemented on an ongoing basis. There is also a federal process for dealing with smog issues. In fact, legally enforceable federal standards are being established, whereas in Canada, for example, for air pollution from toxic substances, all we have are four regulations dealing with four substances, all of which date from the 1970s.

With respect to industrial water pollution, with the exception of the pulp and paper sector, we have standards for six other sectors under the Fisheries Act, but again those standards date from the 1970s. Under the Clean Water Act in the U.S., they have been going through a complete overhaul of their industrial water pollution standards at the federal level since well before 1990.

Admittedly, here and there we turn out to be a little bit ahead. However, when I look at the overall picture, our framework is less complete.

It is also interesting to note some of the work of the North American Commission on Environmental Cooperation, which has been comparing the performance of Canada and the U.S. in terms of environmental outcomes. One of the interesting findings in their report published last month is that Canadian facilities generate 1.5 times the amount of pollution compared to their U.S. counterparts. Some of the analysis of the commission itself seems to be pointing in the direction that that is a function of the much weaker regulatory framework in Canada relative to that in the U.S.

Senator Chalifoux: Is Bill C-32 better than the old CEPA?

Mr. Winfield: As it stands now, unamended?

Senator Chalifoux: Yes.

Mr. Winfield: My answer, I am afraid, is no. I thought about this a lot on the train trip up here, actually. I wondered if we were overreacting to the bill and being overly sensitive. As I went through the bill again, I came back to the conclusion that to pass this bill as it stands would take us backwards from where we are now with the existing act that was passed in 1988.

One has to step back and recognize that as the bill evolved, especially between Bill C-74 and Bill C-32, it changed from being an environmental protection bill to a bill whose purpose, frankly, was to constrain the abilities of the Minister of the Environment and the Minister of Health to take action to protect human health and the environment.

How you see that playing out is that this bill has had layers of hurdles put into it in front of the ministers whenever they wanted to try to act.

Some of the things I mentioned this morning are the strongest examples of that, such as the so-called harmonization clauses requiring consultation with the provinces, the cost-benefit test, the residualization clauses, and the degree to which all decisions now have to go to cabinet. Each of those is a barrier in front of the ministers trying to take action to protect human health and the environment. That is what really concerns me about this bill.

Yes, there are some important clauses and things that move us forward, but when we look at the overall picture, it is almost designed to make it impossible for the ministers to actually act. That is what causes me to stop where I am.

The Chairman: Mr. Winfield, I would like to raise a question related to the area Senator Hays raised with you. You seem to be saying that under the existing law, if you are dealing with a product of biotechnology, it must first be assessed before it can be used.

Mr. Winfield: That is right.

The Chairman: Under the amendments, the cabinet can fast-track it, bypass the assessment and okay the product.

Mr. Winfield: That is essentially what I am saying.

The Chairman: That is your objection.

Mr. Winfield: That is the concern we are raising.

The Chairman: Would it not be reasonable that, before a new product of this nature comes into Canada, it be assessed before it is used? What is your view? Maybe this is an unfair question, but why would one want the power to bypass an assessment of a new biotechnological product coming into Canada's food chain?

Mr. Winfield: That is a good question, senator. That is what led us consistently through this process to ask why we do not stand with the existing provision of the act, which is very clear and seems to set a clearly laid-out rule. The answer appears to be, as far as we can tell, in the enthusiasm of certain agencies to promote products of biotechnology. They appear to have an institutional belief in their safety.

Agriculture Canada does not assess everything. It deals with plants on the basis of a rule called substantive equivalents, which means that, if they have approved something similar, they will not review something that looks like it. That is quite different from what happens with micro-organisms under the CEPA regulation.

Since we are already on that path, it is one that I personally do not think is precautionary. Parliament was wise in setting this one basic rule that everything should be looked at before it is allowed into Canadian commerce. It is a precautionary approach, but it is consistent. It has unseen benefits in encouraging companies not even to bother developing products that might run afoul of the rule. It also provides for a degree of consistency in the treatment of all products across the board, which is something you would think industry would want. That seems to be where we have ended up.

There has been deep interdepartmental conflict over the regulation of biotechnology and how it should be regulated. Part of that flows from a desire on the part of some departments to get out from under the equivalency rule which the existing act establishes. That seems to be the underlying explanation. It does not really make a lot of sense to me why they are proceeding that way.

The Chairman: Nor to me.

Mr. Winfield: But that is where they are.

The Chairman: I did not take a lot of comfort from your earlier references to the questioning by Senator Hays relative to the workings of the Department of Health. We saw the power of Monsanto in the rBST issue. If it had not been for the Standing Senate Committee on Agriculture and Forestry bringing to the forefront the lack of ability of the Department of Health to expose that issue, we would probably have that substance in our milk today. Nevertheless, you seem to think we would be better off with the Department of Health and the Department of Agriculture.

Mr. Winfield: Yes, and there is a reason for that. I am acutely aware of the problems inside the Health Protection Branch. The one principle around which we have been trying to organize our position on how these products should be regulated is that we should achieve as strong a separation as possible of regulatory and promotional functions among agencies and should keep the promoters and the regulators separated. Agriculture Canada is unquestionably a promoter of agricultural biotechnology and various aspects of that technology.

In my dealings with the department, quite frankly, I see that as something that is deeply institutionally embedded within the department. Rightly or wrongly, there is a profound belief in this technology.

That leads me back to a concern that exists in a weaker way with Environment Canada. There are some promotional programs there but nothing like there are in Agriculture Canada. The rBGH situation and Health Canada lead me back to the conclusion that, in this legislation, Parliament needs to speak strongly about this issue and give clear direction to the government on it through its legislation by establishing clear and stringent rules and by minimizing the degree of discretion that is available. It is not an ideal result, but it is the best I can propose at this stage.

The Chairman: This weekend's New York Times contained a lengthy article on genetically modified foods. It talked about the European objections to it and the unacceptability of corn, soybean and other products that are grown on that basis. It also talked about countries, such as Japan, that now require labelling in this regard. It also spoke to the fact that in the United States now a number of companies will not accept genetically modified foods. Gerber is one such company.

Apparently there is a growing feeling among U.S. corn farmers that they will not be able to sell their product. As I recall, 60 per cent of the corn in the United States is genetically modified. As I understand that, it means that built within the grain is a pesticide, in a sense, and there is great concern about that.

In Canada, we do not seem to have any controls, other than what you have described under present legislation. There will be even less control under the new legislation.

The article I referred to suggests that there has not been sufficient assessment as to whether there is any harm from these products. Although there does not seem to be strong scientific evidence that it is harmful, the marketplace is starting to respond. It now looks like farmers in the United States will move away from it and that in many cases next year their crops will not contain genetically modified foods.

What are we doing wrong in Canada? Should we be doing anything until the science is there? With the new precautionary principle of cost-effectiveness, will we ever be able to do anything in Canada if we accept that definition?

Mr. Winfield: It seems clear that, given the opportunity, the market appears to be finding these products unacceptable for both ethical and social concerns. On the scientific side, part of the problem is that the amount of science that has been done on the actual ecological or health implications of these products is very small, and it is extremely small in Canada.

That has been a function, partially, of the way we have been funding agricultural research, which has been to require university researchers to enter into partnerships with private-sector interests. Unfortunately, those interests are not interested in investigating questions of ecological impact.

A body of evidence is emerging, mostly from outside Canada, that seems to confirm a lot of the problems that ecologists theorized about a decade ago, when people first started thinking about these products and what could go wrong with them.

In terms of a strategy, frankly, Canada's approach thus far has been to attempt to bludgeon its way into these markets with these products and to use trade rules to try to do that. That has certainly been reflected in Canada's behaviour with respect to the negotiations on the bio-safety protocol under the Convention on Biological Diversity.

The fact that private-sector actors are turning against these products quite independently of government in response to demands from consumers demonstrates the futility of that strategy. Frankly, that means we must rethink the situation. If we do not, as a minimum, find ways to segregate the engineered crops from the unengineered crops, we will lose those export markets. In fact, we are already losing export markets, not only for the engineered crop that was never there, but for the non-engineered component of our crop, too, because we cannot provide segregated supply.

It is a very difficult situation, especially for farmers who, in effect, are victims in this situation. They ere told by the government and by the companies that produce these products that everything was fine, yet they can see with their own eyes what is happening to the export markets and they are starting to wonder what to do.

This is a serious situation. It requires a fundamental reconsideration of our whole approach. It is a reflection of a deeper problem. Going back to the original formulation of the national biotechnology strategy in 1983, there were explicit decisions, first, to avoid a widespread public debate about the value, purpose and acceptability of these products, and, second, to try to accelerate the move towards commercialization as quickly as possible.

The problem that we have caused as a result is that we have gone down this technological path and discovered that the marketplace does not want the product. It is a profound mistake that we have made. I do not know how else to put it.

We will have to make changes, because it is clear that in Europe, for example, governments would fall before the public would allow the products in. No amount of bludgeoning through the WTO or anything else will change that. The market is sending a pretty clear signal. If we want to hang on to our export markets, we will have to respond to the signal.

The Chairman: These genetically modified products are in the food stream in Canada now. How did they get there? Under the present CEPA, is there not a requirement to assess them?

Mr. Winfield: That is a complex question. It has not been litigated, but it may yet be.

Agriculture Canada has been approving these products under the Seeds Act, and it claims that what it is doing under that act for crops meets the requirements of section 26(3)(a) of CEPA, which is an assessment of toxicity prior to import or manufacture. There have been some doubts about the legal authority under the Seeds Act to do that and also about the level of stringency being applied. They are doing the assessments.

On the plant side with regard to seeds, it is relatively clear what has been happening. On the food side, it is a little more complex because Health Canada has yet to promulgate the regulations to do what is essentially a two-stage assessment. One group looks at it as a crop in a field while the other looks at it as a food.

A number of products were purported to have had food approval given to them, even though regulations to do that did not appear to exist. In fact, Health Canada said that, in effect, it was relying on companies to notify voluntarily and was relying on its general powers under the Food and Drugs Act to prohibit things if they thought they were harmful.

Health Canada has now gazetted some regulations to do the environmental review of these products as food. However, they are relying on authority that has yet to be granted to them to do that. There is a consequential amendment contained in Bill C-32 to amend the Food and Drugs Act to give Health Canada the ability to review new foods from an environmental perspective.

One could make the case that some of these products should be assessed under CEPA now. In fact, things like fish and animals should be defaulting to the schedule in the regulation for other organisms that was made under CEPA in September 1997, and they are not.

It is a very complex situation: there is essentially a collection of ad hoc administrative arrangements in place whose value as a strategy and whose legal basis are open to some pretty interesting questions.

Senator Taylor: I appreciate your raising the matter of genetic modification and hormones. Some of us on this committee have been in Europe three times in the last year studying genetic modification. The House of Lords has put out a great report on genetic modification. We met with the Germans and the Council of Europe. I also represented the Canadian government and the Minister of Health at Codex Alimentarius in Rome, where we talked about genetic modification and hormones.

However, I think you are mixing some truth with some fiction in your answers. Certainly you are correct in saying that the Department of Agriculture may be 20 years behind time in trying to force Europe to accept genetically modified or hormone-raised beef. Maybe we are not up to speed in realizing what is going on.

I met with the Minister of Agriculture just a few weeks ago on that subject, and although the World Trade Organization did rule in our favour, saying that these were non-tariff barriers, perhaps they are behind, too. There is a segment of the world that is not moving as fast as one would like in reviewing genetic modification, hormone injections and so on.

I was also a member of the Senate committee that studied rBST. I am not trying to say I am an expert on the subject, but I have heard from all sides on this, and if you will stay around and listen to the Canadian Federation of Agriculture, they will give their arguments against the points you have made.

I do take some exception to your point that companies can get by the present CEPA to put in genetic modification or hormone replacement without some sort of assessment.

For instance, clause 106(6) states that some subsections do not apply to:

(a) a living organism that is manufactured or imported for a use that is regulated under any other Act of Parliament that provides for notice to be given before the manufacture, import or sale of the living organism and for an assessment of whether it is toxic or capable of becoming toxic;

It is clear that, unless another act of Parliament applies, the minister has the right to go in, before the import or sale of a living organism, and ask for an assessment of whether it is toxic or capable of becoming toxic. I am not a lawyer, but that is pretty simple English.

The Chairman: Subclause (7) is what Mr. Winfield is talking about.

Senator Taylor: I hope he is reading the whole bill and not reading it selectively.

The Chairman: I think he is reading the whole bill.

Senator Taylor: To me, that earlier part before subclause (7) is fairly clear. Unless it is governed by another act, there has to be assessment of whether it is toxic or capable of becoming toxic. That is my first point.

My second point is that not all genetic modification is wrong. I think we are going from one extreme to the other. All genetic modification was good 25 years ago because it increased the amount of rice we were able to raise in Southeast Asia. Now we are getting to the other extreme where any kind of genetic modification is wrong. You only have to look at the kind of corn and wheat they raised in the Navajo caves 2,000 years ago to understand that we do not want to go back that far.

I am interested in how you interpret this bill as providing for no assessment of substances that are toxic or capable of becoming toxic, because, to me, it is quite clear.

Mr. Winfield: Clause 106(6) does reproduce the language of section 26(3)(a) of the existing act, but the crucial clause is, subclause 106(7), which provides the exemption mechanism from that requirement. It states clearly that conclusive proof that the requirements have been met is purely at the discretion of the cabinet, and I believe it is also where they talk about "exclusive responsibility for determining", so the language is written in maximum discretionary terms.

Senator Taylor: The Governor in Council has an overriding power. Would you not like to see regulation that way? Would you not like to see the situation where a minister's ruling could be appealed to the Governor in Council? You are implying that the Governor in Council will let all genetic modifications through. Just suppose the situation was the other way round and the minister was ruling against something you thought was all right. Would an appeal to the Governor in Council not seem quite reasonable?

Mr. Winfield: Under the proposed act, appeals are available to a review board, which is a quasi-judicial body. Our concern is that the language in subclause 106(7) is designed to be utterly and completely discretionary and completely insulated from any possibility of judicial review. It has clearly been drafted for that purpose. It grants the cabinet unlimited authority. It is so unlimited there is no way it could be challenged. This is an authority that does not exist in the current act, so it does provide a way round the basic requirement set out in subclause 106(6).

With respect to the broader question, we are not taking a position one way or the other as to whether genetic modification is right or wrong. We are saying that things should be assessed from the perspective of their potential impact on human health and the environment and on biological diversity before they are permitted to enter the Canadian environment and to enter Canadian commerce.

It is true, however, that there are many Canadians who hold the view that genetic engineering and moving genetic material between species does, in some sense, constitute some sort of violation of some law of God or nature with respect to crossing the species barrier. Considerations of that nature are completely excluded from the regulatory decision-making process as it now stands. Ethical concerns are not part of the equation. However, again, one of the reasons people in the marketplace may decide that they do not want these products is that they feel personally that they are ethically objectionable and they would like to be able to make a choice about them in the marketplace.

Senator Taylor: That is something you and I can agree on. I spent four days in Rome listening to the best scientists in the world debating both sides of this question, and their solution was that labelling would give the consumer the decision-making power. Labelling seems to me to be the solution rather than letting the scientists fight it out.

The only problem I have with labelling is that, in a modern market economy, where some of the biggest companies in the world are able to convince our youths that they should use nicotine and alcohol in order to advance their lives, sexually and otherwise, the advertisers might not have that much trouble convincing the public to eat genetically modified food.

Senator Hays: As I understood your answer to Senator Chalifoux, your principal reason for saying that this bill is worse than the existing CEPA is basically clause 106(7)?

Mr. Winfield: No, that is not so.

Senator Hays: So there is more?

Mr. Winfield: Yes.

Senator Hays: As I recall, that was all you recited. It is interesting that you are more suspicious of the utter discretion in the Governor in Council than of the utter discretion in the ministers as defined in the bill. Nonetheless, there is a discretion there. If I am wrong, correct me on that.

The other area of concern is cost-effectiveness. You did not mention that as something that breaks this bill in your opinion.

I have been reading the CEPA Soap Opera and the MMT situation in terms of regulation, as opposed to this red light/green light, which I still think is the basis of CEPA. CEPA does not have a power to intervene and regulate biotechnology and regulate as many things as should be regulated. I am sympathetic with you there. I am not disagreeing with you on the major thrust of what you are saying. I do not necessarily agree with you that CEPA is the best way to do it, however.

On cost-effectiveness, surely that is not such a bad way to try to deal with the virtual elimination of a toxic substance, or other things that the ministers are required to do, with or without the consent of the Governor in Council? This seems to be a solid, sensible, common-sense approach, as opposed to the command-and-control approach that would probably otherwise be followed.

Mr. Winfield: My concerns about the bill go well beyond clause 106. That is just one particularly prominent example of the problem. Because of our focus on biotechnology, I focused on that, but I mentioned some others, too.

Cost-effectiveness is an example of the deeper problem of the series of barriers constructed by the bill, opposing the taking of action to protect human health or the environment. Three barriers come to mind as being structural to the bill, permeating the whole thing. They are the harmonization clauses, the residualization provisions and the cost-benefit provision.

With cost-benefit, there is a concern over the precedent. We have never put that kind of language into federal environmental, health or safety legislation before. That produces a kind of mechanical trade-off where the economic benefits of something are supposed to exceed the economic costs in order for something to happen.

There are layers of problems with that approach, methodologically and philosophically. We think it is inappropriate to incorporate such a provision into legislation. It exists to a certain degree already as a matter of policy through the Treasury Board's regulatory policy, but that, as it stands, is only a policy. Parliament would want to think very hard about whether it wants to elevate that cost-effectiveness and cost-benefit analysis policy to the level of legislation because of the implications of such an action.

We have not yet had a full debate about the implications involved. As I say, there are very serious philosophical and methodological problems with that approach in terms of tallying up costs and benefits. Cost-benefit methodologies are notoriously weak in terms of their ability to deal with environmental costs and benefits and social costs and benefits.

That is why I would approach this rule very carefully. We did some work on regulatory reform a couple of years ago. In the U.S. during the Reagan era, they had a very rigid cost-benefit test rule for regulations. That emerged as a very serious problem. One of the first things the Clinton administration did was to pass a new executive order that downgraded the rigid tests used by the Reagan administration, because they had become impossible barriers to doing anything.

Senator Hays: Downgrading such a requirement and doing away with it are two different matters, but I take your point. I am not here to argue with you so I will not, but I will close with this comment. The risk management for which the ministers are responsible is well served by requiring cost-effective solutions to eliminate a toxic substance. In terms of analyzing the cost-benefit basis, that will determine the extent to which economic instruments are used or not used in dealing with the virtual elimination of a substance that is found to be inherently toxic.

Mr. Winfield: We are particularly concerned that the language in that clause is strongly mandatory in the administrative duty section. It is not a matter of simple consideration. It seems to us to create quite a rigid test. That is part of the problem.

There are other bases on which ministers in the government may decide to take action, rather than make purely economic decisions as to whether the benefits exceed the cost.

Senator Hays: I do not think they are prevented from doing that.

Mr. Winfield: The language is non-discretionary. It is a "shall" clause.

Senator Hays: If something is toxic and we want it out of the environment tomorrow based on compelling evidence, then that command-and-control approach is not ruled out.

Mr. Winfield: The problem is that even at that point, under this bill you are still faced with three obvious and significant barriers, and probably several more that I could find if I looked. You must go through a consultation process with the provinces that, as now drafted, appears to be mandatory and appears to constrain the minister quite significantly. You must go through the cost-benefit analysis. You must go through a battle over the residualization issue. Then you must get to cabinet where you would face Industry Canada and Natural Resources Canada and all of those folks who probably would be on the warpath.

You could not simply turn around and regulate on the basis of a finding of toxicity. You are still faced with a whole string of barriers.

Senator Hays: Clause 106(7), as it came out of the House, gives to the Minister of Health the same discretion as the Governor in Council has under clause 106(7) after the report stage. The ministers are members of the government. They are subject to the Prime Minister. They resign if they do not like the way in which their powers are given to them or if they are unable to carry out their responsibilities, but all those things mentioned are still potential problems whether you take the wording of clause 106(7) after House of Commons committee stage or after report stage.

Mr. Winfield: My comment is cast much more broadly in terms of the entire act, because almost anywhere that the ministers would take action under any of the clauses, they run into these barriers to action.

Many people favour putting these decisions into the hands of the ministers of health and of the environment over cabinet because the ministers have a clear and explicit mandate that says that health and the environment come first. At the cabinet level, another veto point is provided to other interests. Frankly, those other interests typically are Industry Canada, Natural Resources Canada and Agriculture Canada. They have been the big players here.

Some of those problems were highlighted by the Commissioner for Environment and Sustainable Development in his report this year. He talked about some of the problems that were occurring interdepartmentally on environmental issues and on some of the very non-constructive roles being played by Natural Resources Canada and Industry Canada. He made the point that their actions went well beyond that which constituted constructive interventions.

That is part of our rationale for preferring ministerial decisions over cabinet decisions.

Senator Hays: You cannot legislate away that problem.

Senator De Bané: Dr. Winfield, your group, the Canadian Institute for Environmental Law and Policy, focuses on one issue that finally hurts its own credibility. Your first criticism of this bill deals with the obligation on the federal government to consult with the provinces. You say on page 3 of your brief:

Bill C-32, as passed by the House of Commons, requires offers of consultation with the provinces and territories be made before virtually any substantive action can be taken by the Minister under the Act.

You find that too constraining, but we live in a federal system. I was saying to myself that, if Dr. Winfield was the premier of a province tomorrow and was not the director of research of that lobby group, would he still be complaining that the federal government has to consult with the provinces?

What do you find so unreasonable? I submit that your position that the minister should be able to do that without consulting hurts your own credibility. All single-issue organizations such as yours finally lose perspective of the big picture.

We live in a federal system. We have a federal minister of the environment and the provinces have ministers of environment. Sitting at the table today is a former premier of the Province of Nova Scotia, my good friend Senator Buchanan. I am sure he would object to your criticism in saying that the federal government should not be obliged to consult with the provinces.

I agree with you that we are trustees for the next generation. It is our duty to be good guardians of this planet, but you are saying that we should forget about the provinces and should not be constrained to consult with the provinces. Again, if you were a provincial premier, you would never agree to that.

Senator Buchanan: You are absolutely correct.

Mr. Winfield: I will not presume to suggest that I will ever find myself in that position, but I am not sure that I share that view at all. Our concern is particularly the way in which the bill was further amended in the House, which has managed to construe the bill potentially into a duty to consult. There appears to be no way out. That is a serious concern, because it means there is potentially a barrier to action. That is a particularly acute concern in the context within which we are living right now.

I have spent the last four years of my professional career documenting what has been going on in my own Province of Ontario. We have what is essentially a race to the bottom occurring among a number of provinces in terms of environmental standards. We have been documenting that brutal detail in Ontario. Frankly, we have also documented the activities of the Government of Ontario in blocking national initiatives on national environmental issues in the last four years, including acid rain, climate change, smog, sulphur and gasoline. If the Province of Ontario held a veto, we would be getting nowhere.

If you look at the historical record -- and this has been documented clearly by members of the academic community -- the threat of independent federal action has been a major factor in getting the provinces to move forward. That has been documented on acid rain, and it has been very clearly documented also on the pulp and paper regulations that were done in the early 1990s.

There is only one way to stop the race to the bottom that is now happening, and that is through a strong federal baseline set of standards. The bill makes it almost impossible to establish that. That is where I am coming from and that is my domestic experience. That reflects everything I have learned, both in my professional career as a political scientist and as an environmentalist, about how these things work.

Senator De Bané: If I, as a citizen, am not happy with what my provincial government is doing, the solution is not to say that the federal government should pass a bill saying that it is not necessary to consult with the provinces. My duty is to defeat that provincial government.

I am from the Province of Quebec, which is governed by a separatist government. I think that I should put my efforts towards replacing that government with a federalist government.

Dr. Winfield, if you were a minister of the environment on the provincial side, I am sure you would be speaking another language. I do not disagree with you that sometimes a province does not do things properly, but I do not think the solution is to then use the federal disallowance power to defeat a bill. No. We should defeat that government and put another one in place, but we should not say that the federal government should deny the existence of the provinces and their jurisdiction.

Mr. Winfield: This is a complex set of questions, and it depends on how far down this road one wants to go.

In Ontario, we have a government against which most of the electorate voted. The fact is that the policies that government is pursuing are having a negative effect on the health of Ontarians and on the health of residents of other provinces as well. It is now using its role in inter-governmental processes to block national environmental initiatives, which are very important from the perspective of protecting the health and environment of Canadians. If the Government of Ontario had its way, the federal government would not have adopted the sulphur content of gasoline regulations in July, which are very strong and very important.

Senator De Bané: The bill does not give veto powers to the provinces. It creates an obligation to consult with them.

Mr. Winfield: Our concern, sir, is that the language that has now been inserted may well do precisely that. We do not have a problem with a clause stating that the minister may or should consult before doing something. That is fair enough. In fact, the existing act makes provisions that way. Our concern is with language that translates into a veto, potentially even a legal veto, and how that language might be used in the hands of provincial governments who sadly, but frankly, have made it very clear that they do not have a strong commitment to the protection of the environment.

Senator Buchanan: That is not correct.

The Chairman: Mr. Winfield, I wish to thank you very much for your time, your knowledge, and the tremendous work you and your institute have put into this subject. I congratulate you and thank you on behalf of my colleagues for coming here today. I wish you well in your future endeavours.

Colleagues, we now have with us a number of representatives from the Canadian Federation of Agriculture and the Canadian Fertilizer Institute.

Please proceed.

Mr. Roger Larson, President, Canadian Fertilizer Institute: Mr. Chairman, we are pleased to be here today before the Standing Senate Committee on Energy, the Environment and Natural Resources to discuss our perspective on Bill C-32. I am joined today by Chris Micek, Environment Manager of a fertilizer plant based in Redwater that is owned by Agrium Inc. Agrium, North America's largest nitrogen fertilizer producer, has its head office in Calgary, Alberta. With us as well is Mr. Donald Côté, who is an agronomist with CFI and head of the Quebec Fertilizer Manufacturers Association. Paul Lansbergen is CFI's Communications and Member Services Officer. He is also here to provide testimony.

Our written brief has been submitted to the clerk and is available to you in both official languages. We will not cover it verbatim but only highlight key messages, such as the size of Canada's fertilizer industry, the essential role fertilizer plays in sustainable agriculture and our specific concerns with Bill C-32. I encourage you to review our brief for greater details on the issues we will raise here today.

CFI represents the basic manufacturers of nitrogen, potash, phosphate and sulphur fertilizers, as well as most of the major retail distributors in Canada. Our members produce about 24 million metric tonnes of fertilizers annually, 75 per cent to 80 per cent of which are exported to markets around the world.

Altogether, Canada provides about 12 per cent of the world's total fertilizer material supply. Our exports contribute $3 billion to Canada's balance of payments. Our members must continuously address the issue of global competitiveness.

Fertilizers are part of Canada's international trade objectives. Our industry has been nominated for trade liberalization under APEC, a subject which, I understand, has been advanced to the World Trade Organization for discussions in Seattle this November.

This legislation has a great deal to do with how we as a society perceive our role as stewards of the land. Farming, agriculture in Canada, can be depicted as a mining operation. Each year's harvest represents the removal from the soil of some measurable amount of nutrients. In spite of the 5 million tonnes of fertilizer consumed annually on Canadian farms, we are putting in less than we are taking out. Too little is as potentially damaging as too much. Protecting our soil's health, ensuring an adequate world food supply and protecting the environment is all about balance and integrating this balance into our nutrient management systems.

The world's population is growing. In addition to the obvious increase in the demand for food, greater affluence among the world's population also results in a higher demand for an improved quality of food around the world. However, available crop land with good soil structure and climatic conditions is limited and is being lost to urban growth. Therefore, the remaining agricultural land must be used intensively. However, that intensity need not threaten the soil's health or the nearby environment. With the proper and balanced use of fertilizers and good farm management practices, global food security is possible.

While this level of food supply may not be sufficient, it is certainly necessary. To put this in greater context we should consider the following fact: One, the world's population grows by 100 million people per year, and 95 per cent live in less developed countries. These rapidly expanding populations result in agriculture moving into fragile, environmentally sensitive areas. This must be stopped. Sustainable agriculture cannot exist there.

Wealthy nations protect and enhance their environments. The converse is demonstrated by examples, such as the former Soviet Union and Eastern European countries. In 1931, former U.S. President Franklin Roosevelt said, "The nation that destroys its soil destroys itself." We all pay a price for the unbalanced extraction of soil nutrients. Destroying good fertile soils is an extreme but very real consequence of soil mining. It is possible to recapture soil fertility through the judicious inputs of nutrients, coupled with other sound soil and crop management practices.

Today, some 2 billion people suffer terrible nutrition. Of the 12 million children under the age of five who die each year in developing countries, mainly from preventable causes, 55 per cent are either directly or indirectly attributable to malnutrition.

Our plea to you is to insert the food policy issue into discussions concerning risks from fertilizers. Canada and the world need to bring food policy into the nutrient management legislative risk debate. It provides the balance needed. In fact, it becomes the fulcrum on which we weigh risk from nutrients in food products.

Considering Bill C-32, it is reasonable to ask ourselves whether the consequences of this legislation will be good for Canadian soils, for world soils and and whether it will be good from the perspective of sustainable development.

I will now turn the floor over to Mr. Micek to outline our specific concerns with this bill.

Mr. Chris Micek, Environment Manager, Canadian Fertilizer Institute: Honourable senators, let me begin my comments today by emphasizing that the Canadian Fertilizer Institute supports the need for strong environmental legislation and continuous improvement in environmental performance. However, there is a threshold beyond which more environmental protection jeopardizes economic development, and sustainable development is not achieved.

Therefore, the concept of sustainable development must incorporate a balance between environmental protection and economic development. The CFI feels that if CEPA is to be strong and enforceable, and capable of promoting sustainable development in Canada, it must have the following qualities.

First, it must be clear and predictable so that the government can enforce legislation and business can make appropriate environmental management decisions.

Second, it must ensure that provincial and federal legislation is harmonized and not duplicated.

Third, it must not include information-gathering provisions that are inflexible and that will create an unnecessary administrative burden.

Fourth, it must not contain environmental protection action provisions.

Fifth, it must maintain the provisions relating to overlap and duplication.

Before I comment on these items, I want to point out that we have, in our written submission, specific recommendations as to how the bill should be changed or not changed.

Clarity and predictability should be an underlying principle of all legislation. Clarity not only improves the government implementation of legislation, it also permits business to effectively plan its compliance to legislative requirements.

One area where CEPA was deficient was in the application of virtual elimination. Constructing it in such a way that the bar rises with the advancement of measurement technology misses one important factor: Virtual detection is not virtual elimination. Detection does not automatically translate into elimination. During report stage, amendments were adopted and the situation is now workable, but the CFI is still concerned that the ultimate objective of release limits below the level of quantification is unrealistic.

On the issue of harmonization, we feel that there should be a clear commitment to avoid overlap and duplication between provincial and federal environmental regulations. The commitment to this principle could be more adequately reflected in clause 10 and subclauses 3(a) and 3(b) of the bill if provisions were made to allow for treating provincial requirements as equivalent to federal requirements of the act, based on consideration of performance and intent, not just identical provisions.

The information-gathering provisions of the bill are very broad in scope, and in our opinion they must be carefully applied. As outlined in clause 47, the cost-effectiveness of the use of the powers must be evaluated through guidelines issued by the minister. We recommend that the information providers, such as CFI members, have input into the development of such guidelines so that the true cost to industry can be realized and cost-effectiveness can be evaluated, and so that provisions can be implemented in a harmonized manner.

Another concern is related to environmental protection actions in clauses 22 through 38. We do not feel that it is beneficial to follow the U.S. model and adopt a litigious approach to environmental protection. Government should be responsible for enforcing environmental protection legislation and should not abandon this responsibility. Litigation is not an effective way to resolve environmental issues.

The most important item for the fertilizer industry relates to overlap and duplication. During the House committee stage, a key provision was removed from the bill, formerly clause 2.2, which would have provided effective interdepartmental coordination and for other ministries to deal with matters under their own jurisdiction so as to avoid overlap and duplication. The fertilizer industry is pleased that the government has recognized the importance of this provision and has adopted a specific provision within the nutrients section.

It is essential that clause 118 be maintained. Without such a provision, regulatory uncertainty would exist by virtue of the fact that there is no provision for the minister responsible for the administration of another act of Parliament, such as the Minister of Agriculture and Agri-Food, to determine whether or not their act is appropriate and sufficient to address the matter. The CFI believes that it is very important that the Minister of Agriculture and Agri-Food be involved in determining whether legislation under his or her purview is appropriate and sufficient to deal with a matter related to nutrients.

To conclude, our industry represents a vitally necessary input into the sustainable crop-production system in Canada and abroad. While protection of the Canadian environment is vital to the sustainability of the Canadian agriculture system, this sustainability is completely reliant on replacing nutrients, which are exported in the form of food. The benefits of all forms of nutrients essential to human and plant life must be recognized. Nutrients must be managed carefully to avoid the potential for pollution, but they cannot be seen primarily as pollutants that should be eliminated from the natural environment.

The CFI is actively promoting the efficient use of its products, through research into timing and placement of fertilizers, educating the industry through the Certified Crop Advisor Program, and publishing agronomic and environmental protection information. The industry is achieving this goal. The fertilizer industry views its environmental stewardship as a source of pride. Sound environmental practice is a key component of our industry's best-management practices.

The CFI hopes you will consider its recommendations for modifications to Bill C-32 and we hope you have gained a better understanding of our industry and its role in sustaining the Canadian food-production system and working towards global food security. Fertilizer is the key to feeding the world.

Ms Sally Rutherford, Executive Director, Canadian Federation of Agriculture: On behalf of the CFA, I should like to thank you for the opportunity of appearing today. Considering the time, I will not go through our brief. I would request, Mr. Chairman, if there are questions that remain, that we be given an opportunity to return to answer them because our time here, to say the least, will not be equivalent or equal.

For those of you who are not familiar with the Canadian Federation of Agriculture, I can tell you we are a national general farm organization. Our 18 members include all of the provincial general farm organizations as well as most of the major commodity groups. Our membership constitutes approximately two-thirds of the practising farmers in the country. The issues on which we are active range from economic to social to research needs.

It goes without saying that farmers are concerned about the environment. It indeed makes their living. Being unconcerned about it jeopardizes their ability to farm as well as their ability to safeguard their own families' health and welfare. That is something that is very often forgotten.

The CFA continues to support the need for a broad-based environmental act, such as CEPA. The CFA urges government to ensure legal and regulatory certainty for inputs on which farmers rely. Biotechnology promises to solve some of farmers' most pressing environmental problems, both in Canada and abroad.

This legislation attempts to deal with overlap and duplication. Farmers are committed to the development and implementation of sustainable agricultural practices and farm-level pollution prevention, and to the encouragement of increased support of research -- government, academic and private -- and to technology transfer in the area of environmental sustainability as it relates to agriculture. It also provides for consistency between pieces of legislation in the federal system.

Farmers indeed are moving towards self-regulation on environmental issues. Farmers are committed to sustainable development as an integral part of the agricultural industry.

Public perception of farmers' performance on the environment is often negative, and the proliferation of incorrect statements is common. Farmers do want to be consulted on environmental issues.

I would like to make a couple of statements. Considering that this record will be printed, Mr. Winfield made some incorrect statements and I would like to ensure that they are corrected on the record.

Dr. Winfield made a statement, in answer to a question from the Chair, in relation to segregated product in Canada and the U.S. Product is being segregated in Canada, at least to the same extent that it is being segregated in the U.S. There are no laws in the U.S. that require segregation, just as there are no laws in Canada that require segregation.

If one goes through the entire clause 106, it is practicably unbelievable, unless one believes in a massive conspiracy theory by both this government and the previous one, that ministers of the Crown would together collude to release a substance that was known to be harmful. No part of that clause eliminates the necessity for assessment.

Biotechnology is only one process and one technology. I am very concerned about the apparent focus on biotechnology. Such a singular focus is, to a large extent, irresponsible. One can do just as much damage and just as much good with traditional technologies. Focusing all attention and all funding on one specific technology means that less scrutiny is given to other technologies. Biotechnology products must adhere to regulations as well as the products of any other technology. They are not different.

I have been heavily involved in the debate on the endangered species legislation for the past six years. I hear similar arguments here this morning. Many of changes that CIELAP and similar groups are trying to accomplish are not wrong. Perhaps their understanding of the science leads to disagreements, but my basic disagreement is with their approach. They continuously cite American legislation and American procedure. That simply confuses the issue. Our government does not function in the same way as the American government. Our constitutions are massively different. You cannot have an American system function in a Canadian system just by plunking clauses into pieces of legislation. That does not work.

Ignoring political realities is also irresponsible. We can have lovely words in a piece of legislation. If no one, including the provinces, will abide by the legislation because it does not fit either within our overall constitutional understanding or within their abilities to act, then we have accomplished nothing. Having words that will appeal to some people will not save any part of the environment.

That really is a serious concern. Some parts of the legislation have changed. We do not have a concern about it. To pick up on a point that the Canadian Fertilizer Institute made, there is no doubt that increased environmental regulation is an increased cost for farmers.

Our brief does not say that we do not like this legislation. Our brief says that we understand that we need strong environmental legislation. That brings forward another point about the control within one piece of legislation. We should be ensuring that every piece of legislation deals adequately with environmental safeguards. Again, a singular focus allows other pieces of legislation to be less stringent. Serious flaws exist in that argument.

To say that we like everything in the bill is incorrect. Many CFA constituents do not like the requirements. It will cost them money to adhere to these regulations, which do not stand alone but which come in the same basket as new regulations on food safety and on animal transport; you name it. Farmers practically need to be lawyers and chemists in order to get through the regulations these days, let alone to practise farming.

Put succinctly, we support the bill because we know it must be there. The bill could be different and we would still support the bill unless it actually interfered with the abilities of the different departments to function. It is ineffectual to try to create a new system of government by nitpicking at specific clauses of a piece of legislation.

We can debate about how Canada is governed, but let us not try to change the system by fiddling with these clauses.

Senator Chalifoux, you commented earlier on hog operations in the U.S. In Canada, we do not have that kind of operation. The family farm model continues to exist here. About 97 per cent of farms in Canada are family-owned and operated. We are moving to larger models but we are nowhere near adopting U.S. models at present.

We have learned from seeing the U.S. experience. From economic, social and environmental points of view, putting that many animals in one space is essentially a recipe for disaster, be they chickens or hogs.

There are some problems in Alberta. I do not think anyone will deny that. Efforts are being made to contain and reverse the damage and to look seriously at appropriate modelling and land-use patterns for farmers over the next number of years.

Senator Hays: I have a question for the Canadian Federation of Agriculture regarding biotechnology and how innovative technology is handled in that area. Clearly, there is a difference between traditional plant and animal breeding and biotechnology. The difference is the speed with which change occurs and the potentially greater harm that can take place in transgenics. Dr. Winfield used the example of Brazil nut allergies caused by altered soybean products.

Why do you think the current approval structure and the structure as envisaged by Bill C-32 are safe? Do we have adequate procedures in place to ensure that we do not create problems?

Ms Rutherford: That soybean product has never been marketed. It never got past the research phase and it never will be marketed, certainly not without being seriously labelled.

We have very strong regulations around things like allergens. The point is that biotechnology is a process. The product of biotechnology, the food, must comply with all of the other regulations that every other food must comply with. Those around allergens, around toxicity, around health and safety issues and around environmental issues from a cropping point of view, before they get to the food stage, are all the same. The biotech stuff happens in the lab. It is a process.

As a country, we continue to have one of the most stringent and most respected systems for assessment in the world. Again, that does not mean it cannot be better, but we do have it. If we are to subject the products of biotechnology to that same system, we are essentially meeting the needs that we must meet.

I understand the issue of the precautionary principle and the concern about long-term impacts, but, at the same time, to use an off-the-wall example, the nectarine is a hybrid between peaches and plums. If we were serious about looking for long-term studies, we should remove nectarines from the market. It is a relatively recent innovation.

Another example is the Delicious apple. It is a hybrid between an apple and a pear. Will we take those off the market until we have longitudinal studies on their impact? It becomes very quickly a difficult and emotional issue. That is where it becomes contentious. It is difficult to prove one right or wrong.

Senator Hays: Questions arise out of the objectivity of the current departments of government responsible for this. Would you comment on that? Is it possible for the Department of Agriculture and Agri-Food to be objective? Some people think not. I do not share that view, but let me look to you for a comment in that regard.

Ms Rutherford: One's view depends on how you actually see government operating. Agriculture Canada works under a piece of legislation and is responsible for numerous pieces of legislation that have to go through the House of Commons and the Senate. The regulations have to go through the usual process of scrutiny, both by the public and by government members. The minister does not get up one morning and say, "I do not like that, so we will not do it anymore."

If the legislation and the regulations that exist now are not adequate, then they should be changed. They are set out and they have to be followed. The people who work for Agriculture Canada, just as the people who work for Environment Canada, do not have the discretion to decide which regulation they will abide by and which regulation they will ignore. If the regulations are there, that is what they have to do.

We do not have the same food scares in this country as there are in the United States. The reason is because we have a sophisticated and well-managed system that abides closely to all of the rules, regulations and guidelines that are set out for it. I think we can put considerable faith in that.

Senator Hays: I have one question for the CFI. We heard from the Canadian Chemical Producers' Association about their Responsible CareR program and ARET. Fertilizers are a chemical. Do your manufacturers participate in the association and the Responsible CareR program and, if not, why not?

Mr. Larson: The manufacturers of fertilizers have a close working relationship with the members of Canadian Chemical Producers' Association (CCPA), and we share a number of similar issues and concerns.

Yes, we do use chemical technology in the processing or synthesis of our product. I am not sure I would go quite so far as to say that we are chemical based in the same way that the CCPA members are producers of chemicals. Yes, we do take nitrogen from the air and chemically synthesize it into a plant-available form of nitrogen. We use chemical plants to do that and we use a natural gas feedstock as a source for hydrogen and energy.

We also use chemicals to process mined potash, but these deposits of potash are ancient seabed that were laid down hundreds of millions of years ago. The deposits of phosphate rock are essentially old dinosaur bones, and most of central Florida is composed of these deposits.

Yes, we do chemically acidulate those products. We remove impurities. We upgrade the products and convert them to a plant-available form.

Do we use Responsible CareR? We use various responsibility mechanisms, but our industries are different. We have things like the Certified Crop Advisor Program, which seeks to deliver and transfer technology from the science lab to the farmer and the fertilizer retailer on best-management practices and the appropriate use of fertilizers in order to protect the environment and achieve economic efficiency.

We have manufacturing programs on manufacturing procedures. To the best of my knowledge, ARET would not apply because our products, by their definition, must be beneficial to plants, not toxic to them.

Mr. Micek: I can speak for our company, Agrium. We have an extensive set of best-management practices. They run very much in parallel with the Responsible CareR folks and deal with all the same issues. At the same time, we work very closely with petrochemical companies on the side of Responsible CareR to understand where they are going and ensure we are in step. I do not think the fact that we are members or not members is really the important issue. It is whether we take our stewardship of the environment and safety at our sites responsibly, and we do. Our members have those programs in place to ensure that gets done.

Senator Chalifoux: Ms Rutherford, I find it interesting that you commented on hogs. Does this bill prevent that type of thing from happening in Canada? They wanted to put a hog plant in Lethbridge, and it left Lethbridge. They refused it and it is now in Manitoba. How would this bill work with that type of proposition?

Ms Rutherford: This bill, in and of itself, does not address that type of situation, nor would any of the amendments that Mr. Winfield suggested address that situation. Building that kind of hog operation was rejected for a number of reasons, one of which was environmental. It depends almost entirely on where it is going to be located.

This legislation provides for an assessment and that will not change, whether it is this bill or whether it is an amended bill. The need for an assessment is there. Frankly, it is there from a provincial point of view, which is why it is going from Alberta to Manitoba.

The federal government is not involved at that point. Where this bill could, by default, come into play would be if, for example, it was decided generally that building that hog operation in whatever way they were going to build it, with no manure storage or whatever, was completely beyond the pale. Then, there might be the opportunity for the federal government to move in. For that to happen, we would come very close to a constitutional crisis.

This is the same argument that has been used with the endangered species legislation and other pieces of legislation like that. It is a specific way of looking at the Canadian Constitution in terms of how it operates and the roles and responsibilities of the provinces.

The truth is that the power that the provinces have, either constitutionally or just as a matter of course, makes this legislation apply to federal lands and to those federal jurisdictions where it is clear that the federal jurisdiction has primacy. In terms of the case that you have cited, senator, the federal government would only come in after the fact.

I would not like to leave the impression that the Manitoba government at the moment is being irresponsible for letting that hog operation in. I say that because I have no idea what the stipulations are under which they have permitted it and what steps the company has taken to ensure that they will meet whatever Manitoba's stipulations in regulations and legislation are.

Senator Chalifoux: Does this bill make the issue of jurisdiction between the federal government and the provinces more confusing, or will it assist in defining that jurisdiction between the two levels of government?

Mr. Larson: The support we have indicated for this legislation is definitely based on the premise of the Canada-wide Harmonization Accord on the Environment, which the federal government and provinces signed before, or at the same time as Bill C-32 was tabled in the House. With that harmonization accord, there is the potential for different jurisdictions to determine when a province will regulate an effort and when they will transfer responsibility to the federal government or seek a federal coordinating role in an area of specific jurisdiction. The provinces and the federal government have a good record of working together.

Our concern with the legislation without the harmonization accord would be that rather than ending up in a situation where the federal government and the provinces and their bureaucracies would be required to work together to find a common solution before they started to regulate, we would in effect end up with battling bureaucracies, something which would be very costly. Certainly, it would be costly for our industry to have to report to two different levels of regulation. It would be of great concern to us. It would definitely affect our competitiveness.

Incidentally, in the U.S. I understand that they are now looking to devolve environmental protection to individual states on the basis that more local control is better and more sensitive to local concerns.

Ms Rutherford: The legislation that is before us involves certain amendments to existing legislation. It clarifies certain points within the legislation and, I think, updates it. The legislation sets out some guidelines and provides the wherewithal for the federal government to take responsibility, should it need to do so. Indeed, the use of the federal-provincial accords on the environment and on a number of issues within the environment are the defining documents at this time to determine who has responsibility for what. They are the documents that make this kind of legislation work. Without them, we cannot write into a piece of legislation like this the kind of rules that will make the system work.

Today, we are looking at the legislation. We are not looking at all the regulations, schedules and everything else that will come about as a result of this. Most often, they will be more specific in relation to how things will be put in place.

Senator Chalifoux: I have worked for many years in northern Alberta. I live west of Morinville, which is my constituency.

Mr. Micek: That is very close to where I work.

Senator Taylor: This legislation provides citizens with the right to sue. Has the Canadian Federation of Agriculture given any thought to that provision? All the environmental groups get a warm fuzzy feeling when they think of Bhopal and Union Carbide or Esso, who have oodles of money.

Can you comment on the citizen's right to sue coming up against the right to farm?

Ms Rutherford: Senator, the provision in the legislation is for a citizen to challenge the decision of the minister in relation to a decision that has been made. It is not to sue. One can certainly launch an action in a court against anyone they choose, as long as they are willing to pay enough money to have it happen. Some pieces of provincial legislation have similar provisions.

The provision is to challenge a ministerial decision; it is not to directly challenge an individual or an individual company. It is a much more complex system than that. That is not to say that it cannot be disruptive. It is of serious concern to us. It is not necessarily counter to the right to farm. It becomes a property issue. Certainly, it conflicts with the ability to manage one's operations the way one needs to manage them.

There are other ways of trying to address some of those issues. We are not trying to say that everyone should be allowed to do precisely whatever they like and get away with it. That is clearly not appropriate, and there are innumerable regulations that exist now in the provinces -- because it is a provincial matter for the most part -- that forbid action that more than likely would trigger this kind of thing.

From a farmer's point of view, the likelihood that it will be used against an individual farmer is not very high at this point, but the possibility is there. It is a concern because it could potentially be ruinous to an individual.

One of the growing difficulties with having family-farm-based agriculture is that you may be incorporated, but it is your family that is incorporated as part of the farm, or however you want to do that. You are not Esso or Shell; you are not even one of CFI's members, so your legal defence fund will be what is in your RRSP or maybe your kid's college fund, if it comes to that. It will not be anything else. How an individual family corporation like that deals with some of these problems is an issue that we will have to deal with more and more in the coming years.

The Chairman: Mr. Larson, I understand, from what Mr. Micek said, that fertilizers are not regarded as toxics. Is that correct?

Mr. Larson: That would be a fair, broad statement to make, yes. Fertilizers are, by definition, plant food. That is not to say that, in some situations, the effects cannot become toxic at certain concentrations. Something as beneficial as ammonia, which is essential to the formation of proteins and to life itself, which makes up smelling salts, and which is used in household cleaning products, is also classified as a toxic product for transportation because the physical form that it exists in is anhydrous, which means it is water-seeking, and it is a pressurized gas and therefore can be harmful at a high level of exposure. It is not normally what a biologist would describe as toxic.

The Chairman: Would your association object to the ultimate elimination of substances that have an immediate or long-term harmful effect on our environment or that constitute a danger to Canada and human life or health?

Mr. Larson: No.

The Chairman: Would that be the same for the Canadian Federation of Agriculture? Would you have any objection to the ultimate elimination of substances that have such a detrimental impact on our society?

Ms Rutherford: It would be foolish for someone to object to that. One of the things we have to be very careful about, though, is how one goes about trying to define what those words mean.

The Chairman: Phasing it out or dealing with it in some appropriate manner might be better terminology.

Ms Rutherford: To use perhaps an off-the-wall example, mercury naturally occurs in the grass. Cows eat grass, and there are trace amounts of mercury in cow manure. Are we going ban cow manure because there is mercury in it? One has to be very careful about how one goes about doing some of these things. To simply have the words on paper does not mean that they are either possible to do or even desirable, frankly.

The Chairman: But you would agree that it is appropriate to eliminate these substances if they have these negative impacts on people and our environment?

Ms Rutherford: In a broad sense, yes.

The Chairman: I am not trying to eliminate grass here.

Ms Rutherford: But that is one of the difficulties. I am not arguing against the elimination of harmful substances, but how do you determine how it is done? To simply say that it should be eliminated is not good enough. If we use the ammonia example, it is not good enough to say that because ammonia can be toxic, it should be eliminated. We cannot eliminate ammonia, just as we cannot eliminate mercury. We can eliminate it from certain uses, perhaps, and to certain levels, but absolute elimination is not a rational approach. Again, no one will object to the elimination of toxic substances.

Mr. Micek: I would second that opinion. In a philosophical sense, everyone agrees with that. No one wants to see bad things wilfully emitted into the environment that have a deleterious effect. At the same time, you must understand that the environment contains a naturally occurring abundance of these materials, which we live with all the time. We have to measure to what extent elimination is reasonable and to what extent elimination is unreasonable. Just take the example cited of mercury in the grass. Elimination of emissions above the background level makes sense. Eliminating all grass that has mercury in it does not make sense. That is where I am going to put boundaries around the process. The philosophy is eminently acceptable; we all believe in that. However, it is the degree that is important.

The Chairman: I understand what you are saying, but it is not philosophical if it can be shown that a particular toxic constitutes or may constitute a danger in Canada to human life or health, or may have an immediate or long-term harmful effect on the environment or its biological diversity. That is not philosophical. Those are pretty straight statements.

Mr. Micek: We are agreeing, but what does elimination mean? We get into that conundrum between virtual elimination and virtual detection. You can take it past the point where it produces any benefit, and that point is basically what is found in nature already on its own.

Senator Hays: On the same topic, in his presentation, Professor Leiss made the point that there are some toxic substances that you may want to have because of the good that they do within a closed system, whether it is a chemical process or whatever, but the release of the substance becomes the issue. Let us say that there is a substance that in a closed system will have a catalytic or some beneficial effect in producing something that we need. Provided that we are satisfied that it is not going to escape, and necessary precautions have been taken, then some would argue that the way to deal with that is to regulate it, not have, as CEPA calls for, this red-light green-light approach whereby, if something is toxic, it is to be virtually eliminated, even though it has a positive impact in terms of being used in a closed system process.

Does that affect your answer in any way? I hear you both saying that these things should be eliminated, period, because they are inherently toxic and have no beneficial effect. This is a really interesting part of the dynamic that we hear between witnesses.

There are many who believe that if a substance falls within that definition, then it must be virtually eliminated. There are others who step a little bit back from that, and there are some who step quite a way back from that, and say that, before a substance is eliminated, we should determine if it is useful in this process or that process.

I am sorry that I do not have a good example of an inherently toxic substance that might fit that category. I just want to ensure that I hear you correctly that even if a substance has a beneficial effect, you want it gone?

Senator Taylor: Arsenic might be an example.

Mr. Micek: My response is in the context of emissions to the environment. Where there is no emission to the environment, there is no damage to it. As long as you can ensure that the substance is not released into the environment to cause the effects that cause concern, it is a matter of ensuring that the process is in place to deliver that security. That becomes a cost-benefit analysis.

The problem with many of these discussions is the degree to which one would take the examples. There are many examples in the medical world where medicine that cures at one dosage is a strong poison at another dosage. Again, you leave it to the expert practitioners to determine the proper dosage.

Specific examples can provide some hard numbers. We must be very careful, and it comes down to a matter of degree. I am not very familiar with phosgene or other, worse materials. If limits are placed on the emission of such substances to the environment, then it is up to the individuals or organizations that use the material to ensure that it does not leave their facilities in quantities that exceed the imposed limits. The substance is thereby limited to its beneficial use because it makes sense and because the cost of protecting the environment will affect that usage.

My comments are concern the substance that is leaving the container. I would not necessarily prohibit it from going into the container, depending on the specifics.

Ms Rutherford: We would concur with that and, by the same token, with the definition of biotechnology and its uses.

Senator Cochrane: Phosgene in chlorine was mentioned by the previous witnesses. We need small doses of phosgene because we need chlorine in our water to purify it. Previous witnesses also mentioned that we need manganese. Multivitamins contain it.

You say that you are moving towards self-regulation. You would prefer that the agricultural industry and the farmers regulate themselves. Do you not think we need some regulatory controls to deal with the cases where self-regulation is not working? I believe most farmers are environmentally responsible but, like any other industry, some are exceptions to the rule.

Ms Rutherford: In self-regulation, we are not talking about eliminating existing regulations or even avoiding more stringent ones. We are talking about actual codes of practice and management practices, which implement those regulations to a degree of enforcement that the government itself cannot achieve.

Farmers are self-regulating and self-enforcing for existing regulations. Most set higher standards than the existing regulations. Actual implementation of the regulations is occurring not only on the environment side but on the food safety side, as well. Again, we can have all the right words in the legislation but without monitoring and enforcement, we only have nice words on a piece of paper.

Senator Cochrane: One witness mentioned that farmers should be consulted on environmental issues. Is there no consultation happening at present with the Minister of the Environment?

Mr. Larson: Yes, farmers have consultations with the Minister of the Environment on an ongoing basis on a number of issues. They do not call once a week to get our opinions, but we do meet frequently with Environment Canada officials.

Senator Cochrane: Do you feel that the interests of farmers are being addressed in regard to decision making?

Mr. Larson: I cannot speak for the interests of farmers. I can speak about the interests of the fertilizer producers. To a significant extent, I would say yes, with some notable exceptions. Perhaps this speaks to the last two questions and statements.

When we are discussing the need for regulations, whether enforced or voluntary, and whether in a closed system or an open one, we often forget the impact on the business. What is the paper burden? What is the cost of complying with the reporting requirements? Is there any improvement in environmental protection by making that requirement versus finding another, more flexible way of achieving the results?

We had an unfortunate experience with Environment Canada when they requested data on ammonia. We told them that the question was worded in a way that would defeat their purpose. We offered to supply them with the data. We were refused. We told them that the numbers they would receive would be useless. They insisted on proceeding anyway. The form went out to fertilizer producers, retailers and farmers. They got back meaningless information. Then they called us and asked for help. This happened because they did not understand the issue. They did not understand the information they were requesting. They did not understand the science behind it.

We talk about the appropriate regulatory agency being the regulator. That is because they have a basic understanding of the issues. Without that basic understanding, great problems can be created.

I explained this issue to one assistant deputy minister in Environment Canada. He shook his head in disgust. Everyone can make mistakes and everyone can do things right. We seek to work with Environment Canada to do things right. Many of their scientists work at the highest level of scientific ethics. They pursue solutions to environmental problems and look for ways of jointly building solutions.

On the other hand, there are times when there are difficulties. With this legislation, we are looking for workability -- creating a piece of legislation that we can work with so that regulations to protect the environment can be implemented in an affordable way. We want them to protect the environment and not destroy the competitiveness of the Canadian economy. Let us find ways of avoiding unnecessary regulation that will simply cost money and not improve anything at all.

Senator Cochrane: Do you feel that Bill C-32 is workable for the fertilizer industry?

Mr. Larson: Yes, with the government amendments at report stage, I think we have resolved most of the major issues and concerns that we had around workability. The bill is at the point where we can work with it.

We would like to see other changes. We ran through those at the introduction of our brief, so I will not do so again. However, we would certainly like to see some other things happen in Bill C-32. The broad answer is that most of the bill is workable to the point where we are asking for a half a dozen changes, not 200.

Ms Rutherford: I think we are in the same position in regard to the legislation as Mr. Larson just outlined for the CFI.

I appreciate the attitude with which this committee is dealing with its witnesses. To speak to your question, as often as not, Environment Canada sees us as the enemy, right off the bat. It is difficult for both sides to get past that. When one side assumes that the other is wrong, you do not end up with a very good dialogue. You are not able to impart certain information or have the other side believe that it is important information.

The House of Commons Committee on the Environment was incredibly rancorous. It was very insulting, frankly. As a Canadian, I am certainly entitled to my opinion. My organization is entitled to its opinion, whether anyone else agrees with it or not. To be given the opportunity to come here and to be asked questions politely is a real credit to yourselves and to the process.

We must deal in a better way with Environment Canada. We have had an opportunity on the Health Canada side with the Pest Management Regulatory Agency (PMRA), with which we have also had a difficult relationship over a number of years, but with whom now, much to everyone's surprise, we are developing a good working relationship. We do not agree on many things, but we have at least reached the point where we can work together to find appropriate solutions that will actually work. That is the position we would like to be in with Environment Canada.

Certainly, a different process was used for the endangered species legislation than was used for CEPA. They have made efforts to move in that direction, but it is a hard move for everyone.

Senator Cochrane: Are other sectors of industry in the same situation with regard to the Department of the Environment as you are in?

Ms Rutherford: I think it is pretty widely held. If you make any money at all off anything besides consulting on environmental issues, there is a black mark against you before the walk in the door. You can often erase that quickly.

By the same token, we are often suspicious when we are called up and asked. It would be nice to be able to eliminate some of those difficulties. I think all sides are attempting to work at that. It does not exist only on the private sector side but within the government itself. It is a matter of territory and turf and trust, but if we could all enter the process with the feeling that we all want the best for the environment, understanding that we are all coming at it from different points of view and different attitudes, then the process will work better.

With the PMRA situation, we have given a lot more than anyone ever thought we would. Simply having someone sit down and explain some of the things we did not understand and being able to explain to them what they did not understand has made a huge difference. If we could have that kind of relationship with Environment Canada more often, we would all be better off.

The Chairman: Thank you all for being here today and sharing your thoughts with us.

The committee adjourned.