THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Tuesday, April 9, 2019
The Standing Senate Committee on Agriculture and Forestry met this day at 6 p.m. to study how the value-added food sector can be more competitive in global markets.
Senator Diane F. Griffin (Chair) in the chair.
[English]
The Chair: Hello. I’m Diane Griffin from Prince Edward Island and I’m chair of the committee. This evening, the committee is continuing its study on how the value-added food sector can be more competitive in global markets.
Before we hear from the witnesses, I would like to ask the senators to introduce themselves.
Senator Moodie: Rosemary Moodie, Ontario.
Senator C. Deacon: Colin Deacon, Nova Scotia.
Senator R. Black: Rob Black, Ontario.
Senator Doyle: Norman Doyle, Newfoundland and Labrador.
Senator McIntyre: Paul McIntyre, New Brunswick.
The Chair: Thank you. For our first panel, we have a big group here at the end of the table. Welcome, folks. From Agriculture and Agri-Food Canada, we have Marco Valicenti, Director General, Sector Development and Analysis Directorate, Market and Industry Services Branch; from the Canadian Food Inspection Agency, we have Daniel Miller, Executive Director, International Programs Directorate, International Affairs Branch; from Global Affairs Canada, we have Christopher Wilkie, Director General, Trade Sectors; and from Canada Border Services Agency we have Doug Band, Director General, Trade and Anti-dumping Programs Directorate; and Fred Gaspar, Director General, Commercial Program Directorate.
Thanks, folks, for accepting our invitation to appear this evening. I understand you are making your presentations in this order: AAFC, then the CFIA, the GAC, with CBSA following up. I’m ready to go home. That’s a lot of acronyms.
The floor is yours.
Marco Valicenti, Director General, Sector Development and Analysis Directorate, Market and Industry Services Branch, Agriculture and Agri-Food Canada: Good evening and thank you very much, Madam Chair. It’s a great honour to appear before this committee along with my colleagues at this table. My remarks will focus on the Canadian value-added sector, its current business environment and ability to complete in global markets.
At this point, I understand you have already spoken to a number of witnesses on this topic, including people in the industry. Therefore, you probably have a good sense of how important the agri-food sector is to the Canadian economy.
Let me start with a few facts. In 2018, the agri-food sector was a key contributor to the Canadian gross domestic product, generating exports of $59.3 billion — $66.2 billion if we include fish and seafood exports.
The food beverage processing industry is a cornerstone of the value-added food sector in Canada and the largest manufacturing sector in terms of GDP and the largest manufacturing employer in the country, with over 279,000 employees.
Small- and medium-sized enterprises which account for over 95 per cent of the establishments are a key component of this industry.
Large establishments account for about half of the industry’s total output. In total, Canadian-based processors supply about 70 per cent of all food processed and beverages that Canadians consume every day.
If we look at the performance of the industry, we see industry revenues increased at an average rate of 3.7 per cent per year to a total value of $115.6 billion in 2018. Manufacturing sales grew 2.1 per cent per year on average, slightly above the Canadian population growth rate. In the context of exports, Canada exported a record value of $36.5 billion in processed foods and beverages in 2018. Our trade balance went from a deficit of about $1 billion in 2013 to a surplus of approximately $2.7 billion in 2018.
In our discussions with industry, stakeholders have indicated that the Canadian food-processing industry has the potential to grow even more, but there are challenges they are facing. In particular, industry stakeholders have expressed concerns about challenges in accessing labour, which they feel is holding back sales growth and plans for further expansion. In addition, industry has reported regulatory challenges and the potential impacts of regulatory environment on business growth and competitiveness.
Industry has asked for government support in these areas, particularly as they recognize the growth potential arising from global population growth and the increase in disposable income in emerging economies.
As you are well aware, the government provided a forum for the Canadian agri-food sector to develop a vision of how to unlock its capacity to innovate through the Agri-Food Table, an Economic Strategy, led by my colleagues over at Innovation, Science and Economic Development Canada, ISEDC. Back in September 2018, the table made recommendations to support growth of the value-added sector in the areas of regulation and competitiveness, transportation and information technologies, export market development and diversification, innovation, and labour and skills.
Increasing the competitiveness of the valued-added food industry requires several areas of sustained focus. One is in the area of growing capital investment, another is building a culture of innovation, and a third is about diversifying our Canadian export markets, looking beyond the U.S. I will take a few minutes to go through those three areas.
Capital investment — which gives rise to enhanced productivity, better product quality and improved sustainability — plays a key role in supporting growth and competitiveness in the food-manufacturing industry. Over the past five years, investment in machinery and equipment in the industry has been stable at about $1.7 billion per year, or 1.6 per cent of industry sales, which I have to say is lower than some of our global competitors. This is not to say that the Canadian industry does not invest in advanced technologies, but the industry’s level of technology adoption is lagging behind some of our global competitors, such as the U.S. and certain European countries.
In response to the need for support to capital investment and adoption of new technologies, the government introduced the immediate expensing of manufacturing equipment through the 2018 Fall Economic Statement, which will certainly help support investment in the food industry.
As technology advancements continue to change the face of manufacturing, it is also important to continue working with the industry to better understand how these emerging technologies can play a key role in manufacturing, specifically increasing productivity.
In the context of culture of innovation — you’ll hear me say that a few times throughout the presentation — supporting capital investment is important in terms of helping industry grow, but at the same time, improving competitiveness and the use of innovation in increasing competitiveness is a key emphasis for this sector.
We saw in 2018 that the food-manufacturing industry investment and research and development, R&D, increased significantly to reach $179 million, which represents 0.17 per cent of the industry’s sales. Again, Canada is lagging behind global competitors in the area of R&D intensity. That’s something we wish to discussion.
In our discussions with the industry, the fragmentation in the Canadian innovation system has been recognized as an issue. We need to build a culture of innovation that puts a great emphasis on R&D, as well as more collaboration within the ecosystem of innovation across this country, whether it’s on pre-competitive or proprietary research.
The government also recognizes innovation as an important priority and has launched several initiatives in that area. Initiatives such as the Protein Industries Canada supercluster will position Canada as the global leading source for sustainable and innovative plant-based protein products and ingredients. Agriculture and Agri-Food Canada has also provided $107 million through its AgriInnovate Program to support industry in the areas of capital investment, again to encourage innovation and new technologies.
The government is also encouraging increased collaboration in agriculture and the agri-food sector through the Strategic Innovation Fund, including the stream four of that fund where competition is currently under way specifically for the ag sector, with funding up to $50 million for national initiatives that highlight new technologies, automation and digitization.
In the context of export diversification, Canada’s export performance in processed foods and beverages has been strong. The industry remains very focused on the U.S., which accounts for 71 per cent of the country’s total exports.
There is a strong linkage between the Canadian dollar and our trade balance. We currently have a $7-billion trade balance with the U.S. in processed foods. By gaining just 1 per cent in the U.S. market, it could represent additional $9 billion in exports, which means Canada still has significant opportunities for growth in the U.S.
We have been engaged in the context of trying to expand our markets beyond the U.S., but we understand that there could be some challenges for some of the small and medium enterprises, whether based on being priced competitively in foreign markets, logistical issues with shipping, shelf life and barriers related to regulatory frameworks. We are actively engaged with our SMEs in ensuring they have the needed tools to compete in global markets.
In the past couple of years, the government has implemented three landmark trade agreements, which will certainly help. CETA, CPTPP and CUSMA are extremely helpful for the valued-added processing industry.
If we talk about support we’ve provided to the valued-added food industry, I think the government listened to the advice provided by the Economic Strategy Table, both in the measures that were identified through the Fall Economic Statement in 2018 and Budget 2019. I will give a few examples: There was a further $100 million through the Strategic Innovation Fund to support the industry through innovation. There was the agri-food and aquaculture regulatory review, a key point in the context of ensuring that investments meet the regulatory modernization in Canada. In the context of transportation, there was the acceleration of funding to the National Trade Corridors Fund. There was also the launch of the Trade Diversification Strategy, which included more trade commissioners abroad, as well as engagement in international standard-setting bodies.
The intersection of food and health is gaining a lot of traction in Canada and globally as food is increasingly looked at for its potential contribution to good health. We recognize the importance of this intersection. We are engaged with the industry in looking at how we can help the industry move forward in the context of food and health.
You may also be aware of food policy for Canada, which was announced in Budget 2019. It proposed an additional $135 million in new investments over five years. Again, this is the first of its kind. It sets out a coordinated and collaborative approach to addressing food-related issues.
In conclusion, going forward, there are significant economic opportunities to grow valued-added in the sector through consideration of areas such as increased capital investment, innovation and market diversification. The government, through the Fall Economic Statement and the budget, has addressed, shown and highlighted some initiatives to support the industry in this area.
From my perspective, it will be important to continue working collaboratively with the industry to ensure that potential challenges to growth are understood and actioned.
The Chair: Thank you for your presentation. We will now hear from the Canadian Food Inspection Agency.
Daniel Miller, Executive Director, International Programs Directorate, International Affairs Branch, Canadian Food Inspection Agency: Good evening. As mentioned earlier, I’m the Executive Director for the International Affairs Branch at the Canadian Food Inspection Agency.
I value the opportunity to be able to speak about this subject and highlight some of the important investments Canada has made in terms of its approach going forward, as well as some of the opportunities and challenges being faced by industry as they try to invest in the international market.
More specifically, I appreciate being able to provide the perspective of the agency and how it can contribute to your examination of how Canadian food processors can take advantage of the opportunities that enable them to strengthen our economy and a sound domestic marketplace while continuing to support and export qualify valued-added foods to key markets around the world.
As Marco said regarding diversification beyond the U.S., in regulations we deal with all countries around the world. We are actively doing that and continue to be in those spaces.
At the agency, we have been working to improve market access in the valued-added sector such as, for example, finding ways to export more Canadian-made potato chips, homegrown potatoes, ready-to-eat meals and cookies, in addition to taking advantage of opportunities. That’s the centre aisle of a grocery store, for visualization purposes, that we’re talking about in terms of some of those areas of activity.
There are three specific areas that contribute to achieving these objectives that I would like to talk about.
One is Canada’s reputation as leader in the food safety and consumer protection area. The second is our efforts in regulatory modernization and the electronic certification that helps our products move around the world, and the importance of scientific rigour and partnerships as demonstrated among the stable of all the departments involved in a very complex issue.
Canada has an excellent international reputation with a strong and modern regulatory framework supported by scientific evidence at the agency and throughout the other departments, such as Health Canada. This foundation enables us to protect consumers both in Canada and abroad and protects Canada’s animal and plant resources, a very important element of sustainability.
Furthermore, it enables us to maintain current market access, facilitate access to new international markets and build trust in Canada’s food system. This is part of the Canada Brand of agriculture and agri-food products, which I know you have already discussed as part of your study. It’s important to recognize that there is a need to continue to improve, and as such we have made some great strides this year to support the valued-added food sector.
As of January 15, 2019, the Safe Food for Canadians Regulations came into force. These regulations represent one of the largest regulatory changes in Canada’s history, and the largest at the Canadian Food Inspection Agency. These new regulations replace 14 existing commodity-based regulations with a single set that applies to all food. No longer are we commodity-based; we are now moved into a single food program that is seen as a world leader in this area in terms of regulatory processes. That reduces the regulatory burden to the food industry and provides flexibility in terms of their ability to meet the demanding changes in the world today in terms of producing in this sector.
Outcome-based regulations specify the desired result that a regulation is intended to achieve. One of the main outcomes of this regulation is that there is a outcome base. It doesn’t mean there is freedom to be able to produce things. It gives the industry the flexibility if you take, for example, things like pasteurization. Before, we might have told them what kind of machine or what temperatures to use. Now we are saying they need to be pasteurized and safe for Canadians, allowing industry to have more flexibility in the type of equipment they buy in terms of investments and changing science. That means our regulations don’t have to be changed constantly.
This approach allows them to be innovative and deal with emerging trends, such as packaging. If you remember Tetra Paks and cans, it allows industry to be innovative in those spaces. It also lets them respond to emerging threats like E. coli that could happen in different products as we evolve.
What we state in the Safe Food for Canadian Regulations is that food has to be safe. We also have a preventative control plan, which I can talk about in more detail. That allows industry to update their science but also come up with practices suitable for the time and us as an agency to monitor those activities.
It is important to note that our regulations are based on international standards. Why is this important? It is very important because it allows us to trade internationally and get into other countries as we move forward in the future.
Many Canadian trading partners like the United States, the EU, Australia and New Zealand also use these codex standards. It puts us on a level playing field with trading partners who are competing for other markets similar to ourselves. We can benefit from the area of equivalence, which I can talk about, as well as the importance of food safety.
Food imports into Canada is always an important conversation. We want to tell you that the imports into Canada are subject to the same regulations as our domestic people as it relates to food. This is a very important element that all food in Canada is subject, whether it’s leaving or coming into the country, to the same food safety and labelling requirements as part of the regime going forward under the Safe Food or Canadians Regulations.
The regulations also allow Canada to leverage food safety systems regulations arrangements with other trading partners. On January 15, 2019, we took advantage of what is called the Foreign Supplier Verification Program with the United States. Canada benefited from having an arrangement with the United States to allow us to trade. What we had to do differently from other countries around the world was to identify that companies were in good standing and held a licence in Canada which allowed these people to sell their products in the United States and to not have the burden of increased paperwork like other countries around the world. That was based on our reputation and our ability to work closely with the United States on a regulatory regime.
Canada food businesses exporting foods that are regulated by the U.S. and the FDA are required to meet the Foreign Supplier Verification Program, and we have done that successfully. We are also able to build on our technology and are able to produce that list electronically to the U.S., which is continually updated as part of our process.
As these businesses are required to be licensed under the Safe Food for Canadians Regulations, the CFIA is able to optimize this opportunity and can publish that list and update it, as I mentioned earlier, as part of the process.
To be in good standing, food manufacturers need to have an acceptable preventative control plan. They have to control the risks and know their risk and they also have to know where they are getting their ingredients and products, and build responsible programs to manage the risk as part of this. This is a shared responsibility with industry and the regulator.
This also provided the U.S. importer with assurances that products exported from Canada meet the U.S. requirements and facilitate food exports from Canada to the United States. These include products from the valued-added food sector, such as snacks, cereals and baked goods regulated by the U.S. FDA. These new regulations also provide CFIA with broader authority to certify Canadian food products exported from Canada that are manufactured safely.
Previously, some exports have not been accessible for certain types of processes in manufactured food because the CFIA did not have the authority to issue export certificates that were needed to these markets. There was what was called a manufacturer’s declaration; now we have a certification process that is electronic, the first one at the agency that we issue in terms of this area. This has allowed exporters to have the certificate and enter into markets that were previously inaccessible.
For the implementation of the SFCR and the authority to certify certain goods and parallel implementation, we used our electronic system.
The third point is the opportunity concerning products under new technologies and novel approaches in biotechnology. We work closely with our Health Canada partners to ensure that we follow approaches that allow products to be entered into the market through a rigorous scientific and risk-management approach in partnership with Health Canada, and also working with our colleagues at Agriculture and others to ensure we are accessing other markets around the world and domestically as part of that process.
In conclusion, we often think part of my responsibility is to deal with all of the free trade agreements in terms implementing them around the world. I get the opportunity to chair many of those groups in terms of operationalizing those with our colleagues and support from GAC, as well as agriculture, and it’s an important element. One of the things we benefit from here in Canada is our diverse population and the ability to customize our food products to Canada because of our diversity, but also to sell around the world because of our reputation. Every meeting that I go to in our international standard-setting bodies, Canada is always recognized for the reputation, but reputation alone will not allow us to enter into the market. It’s because of our strong regulations. I know there are conversations about the importance of regulations. It’s also our safety record that allows us to do that.
In conclusion I’d like to thank you and the committee. I’ll hand it over to Christopher to take over on the other end. Thank you.
The Chair: The floor is yours.
Christopher Wilkie, Director General, Trade Sectors, Global Affairs Canada: It’s a great pleasure to be before you today to speak a bit about our piece of the pie at Global Affairs Canada and enhanced prospects for competitiveness, and one of the ways we do that is through exporting abroad. We do that as well through close cooperation with AAFC, CFIA and others. I’d like to describe a little bit about how we do that.
As with all agricultural commodities, given the close relationships with agricultural partners and stakeholders, AAFC, that’s Agriculture and Agri-Food Canada, is the departmental lead on international business development in the agricultural and agri-food sector. It performs these functions through its international affairs branch, of which Marco is a member, led by assistant deputy minister and also by 35 AAFC trade commissioners in priority markets who are co-located with us at Global Affairs Canada offices abroad.
In addition to AAFC trade commissioners, GAC’s Trade Commissioner Service, the TCS, devotes resources to support the agriculture and agri-food sector. Again, these resources work closely with AAFC trade commissioners to further Canadian exports, in particular, in markets where there is no AAFC representation on the ground. In many instances they are trade commissioners who work in some of our smaller offices and cover multiple sectors, ag being one.
How do we work with AAFC? The allocation of these resources is determined in response to the ebb and flow of client demand and market opportunity. The total number of TCS trade commissioners working in support of this sector fluctuates regularly and we consult closely on this.
Currently, we have the equivalent of 63 GAC trade commissioners covering the agriculture and agri-food file in our 160 offices abroad. That sounds a little bit confusing, but, as I noted, some of the trade commissioners may spend half of their time or a proportion of their time on agriculture. There is agriculture representation throughout our network and, of course, that is a supplement to the 35 full-time ag commissioners from AAFC.
As I noted, the two departments work closely together to ensure strong international business development coordination in the sector. I have responsibility for coordinating engagement from the TCS side. We meet regularly with AAFC colleagues to discuss how to optimize all aspects of our collaborative work. This can include foreign direct investment attraction, innovation and cooperation between our regional offices across Canada, as well as increasingly trade diversification. That imperative has made itself apparent over the last several years.
My colleagues at Global Affairs Canada with responsibility for each of these areas join me in our meetings with AAFC when we have issues to discuss related to their files. The last time we had a formal coordination meeting to address broader issues was on March 1; however, we are in contact with AAFC on a daily basis across all of these files.
A key area of focus recently has been expanding access to AAFC colleagues to our business planning system at GAC, which is known as Strategia. That covers everything that our mission does in a foreign market, whether it be trade, development or foreign affairs. The client management system, known as TRIO, which is what we at Trade Commissioner Service use, is also open to AAFC colleagues, and we also collaborate in this system as well.
Strategia is a business planning tool, as I’ve said, which our offices abroad use to outline their strategies for the year across all business lines. It includes the initiatives, the budget requests and resource allocation decisions, as well as identifying appropriate key performance indicators to measure results.
AAFC access to Strategia has been critical in ensuring coordination between the department and the Trade Commissioner Service in supporting joint promotion initiatives abroad. One example is the 2019-20 business plan developed by the trade program at the embassy of Canada in Tokyo. AAFC has provided input on the business plan through Strategia for this year on specific initiatives, and also used Strategia as a platform to allocate AAFC resources to support specific initiatives. For those projects funded by AAFC is that department approves these initiatives. All of this is done online through Strategia, which ensures there is clear coordination that leads to strong, unified business plans between our two departments.
TRIO, as I’ve noted, is the Trade Commissioner Service’s client management system, which is used to track services provided to our clients and interactions that we have with them. It is also used to track business leads that the trade commissioners have generated, and foreign direct investment projects, the targeting of foreign companies for purposes of investment attraction.
AAFC access to TRIO and the critical data that it holds is used to help determine where AAFC allocates its trade commissioners internationally. By having access to TRIO’s list of agri-food companies that are clients of the Trade Commissioner Service and AAFC trade commissioners and the markets in which they are served, AAFC has the raw data necessary to support the allocation of its international resources.
In addition, AAFC access to TRIO allows it to monitor KPIs, key performance indicators, and successes for the purpose of reporting. This includes items for measurements such as economic outcomes facilitated, opportunities pursued, and the number of outcomes made by officers in the field.
This is just a glimpse into how the trade commissioner service and AAFC coordinate together to support Canadian agriculture and agri-food companies internationally. One stat I’d leave with you at the end and I’d be happy to talk about this in greater detail is that through cooperation over the two-year period from 2016 to 2018, we jointly provided 5,005 services to 1,458 agriculture and agri-food clients abroad. Thank you, Madam Chair.
The Chair: Thank you. Now we’ll hear from the Canadian Border Services Agency.
Fred Gaspar, Director General, Commercial Program Directorate, Canada Border Services Agency: Thank you, Madam Chair. In light of the time, I will be brief.
Thank you for inviting the CBSA to participate in this committee’s study on how the value-added food sector can be more competitive in global markets. I’m here today with my colleague Doug Band, Director General of the CBSA’s Trade and Anti-dumping Programs Directorate.
The agency is responsible for providing integrated border services across the functions of customs, enforcement of immigration and refugee policy, and food, plant and animal inspection. In doing so, we administer and enforce over 90 acts, regulations and international agreements on behalf of federal, provincial and territorial partners.
[Translation]
Our initial mandate remains the same. Our goal is to facilitate the entry of eligible low-risk travellers and goods, while preventing the entry of travellers and goods that are ineligible or that may pose a threat to Canada. However, border management is an increasingly dynamic and complex activity. To keep pace with this changing environment, the CBSA’s commercial modernization agenda is guided by the principle of risk-based compliance. This principle involves identifying trends and patterns associated with high-risk behaviours and goods and focusing our enforcement activities on these risks. To that end, we analyze data, share information with our partners, simplify the client experience—for example, our single window initiative—and facilitate the entry of low-risk travellers and goods through our trusted traveller and trader programs. We use pre-arrival information and detection technology. We’re strengthening compliance activities related to exports and revenue collection.
[English]
The CBSA’s commercial and trade mandate has several objectives including but not limited to managing the movement of commercial goods into and out of Canada; ensuring importers and exporters understand and respect applicable Canadian trade laws and international agreements; and collecting the duties and taxes on imported goods owed to the Crown.
Commercial importations of food, plant and animal products are subject to the same reporting, accounting and release procedures as importations of any other commodity. They are, however, often subject to specific import requirements, such as permits, licences and supporting documents that aim to assist the agency in preventing diseases, pests and invasive species from entering the country, and protect Canada from potential threats to global biodiversity from the trade of endangered species.
The Canadian Food Inspection Agency, Environment and Climate Change Canada, and Fisheries and Oceans Canada establish the regulatory requirements for all food, plants and animals and related products entering or leaving the country. The CBSA enforces these requirements in partnership with these other government departments in both the traveller and commercial streams of our business, inclusive of the land, air, marine, rail, international mail and courier streams.
Importers are required to educate themselves on the specific requirements for the product they are bringing into Canada. In many cases, importers must comply with more than one Canadian act and/or regulation. To assist importers, the CBSA has set up a Step-by-Step Guide to Importing Commercial Goods Into Canada on its website, as well as a link to CFIA’s Automated Import Reference System, or AIRS. The CFIA’s AIRS system provides importers with the requirements for CFIA-regulated commodities.
In its enforcement of food, plant and animal legislation and regulations, the CBSA has a number of tools at its disposal. Under the Customs Act, Border Services officers may detain any goods and refer them to the appropriate authority to be dealt with or refuse the entry of any prohibited goods, unless the prescribed conditions, such as import permits, are met. The CBSA may also issue agriculture and agri-food administrative monetary penalties for violations of the CFIA’s legislation, including the Health of Animals Act and the Plant Protection Act. These penalties are designed to deter non-compliance and enforce mandated regulatory requirements with the program legislation.
[Translation]
Madam Chair, the objective of the CBSA’s food, plant and animal program is to protect the health of Canadians and support Canada’s competitiveness by ensuring food safety and environmental protection and by preventing the importation of ineligible food, plants, animals and related products.
[English]
That concludes my remarks. I’d be happy to answer any questions the committee may have.
The Chair: We’re a little pressed for time this evening. I’ll ask people to come with their best question first. Ask your question and state to whom you are directing it so that we don’t have all four necessarily having to answer the same question.
Senator Doyle: Mr. Valicenti, I will take you back to your presentation, the bottom of page 3. Maybe you can educate me a little bit on R&D. You said Canada is lagging far behind global competitors in R&D intensity for food manufacturing.
I had a note that said a very small percentage of R&D investment actually results in commercialization at 3 per cent. What causes that? How do we compare with, say, the U.S.? What is the cost? Is R&D not what it should be? Educate me a little bit on that, please.
Mr. Valicenti: I will give a couple of examples. Whether we take the U.S. or the Netherlands, in both instances, they spend probably four times more in the context of research and development than we do. The Netherlands, if you think about the country itself, is fairly small, but they have a great ability to engage actively between industry, government and academia in defining the priorities, again, that the industry feels need to be tackled. We don’t see as much of that in Canada. We have a tremendous number of assets, whether you’re talking about university institutions that have food science programs, some provincial food tech centres, the federal government and some of our research stations, we have some great assets out there that are doing research and development, and innovation, to increase productivity. We’re not seeing the collaboration or the discussion among them in the sense of moving forward as an industry, as a collective.
We talk about culture of innovation. One of the things the Economic Strategy Table talked about was the need to reduce the fragmentation in the sector. To coordinate and ensure that there’s collaboration among what I’ll call science assets across the country so that, first, they understand what they’re doing; second, the industry can acknowledge that there are those assets that might be able to help them in that area; and third, to ensure that even if it’s — in some cases, they’re concerned about privacy and competitive advantage over their competitors, but I think even in the pre-competitive state, they should be looking at areas of collaboration and innovation.
We’re not seeing that expansion like they do in the Netherlands or the U.S.
They are spending more money. There is a need to engage actively. That’s something we’re trying to promote in ensuring collaboration across the country.
Senator Doyle: We probably need to spend more than what we’re currently spending on R&D. You mentioned $179 million. Do we need a bigger investment in R&D to achieve the numbers we need to achieve?
Mr. Valicenti: We’re spending a significant amount of money in innovation. We’re saying that we need to ensure we’re connecting the dots — connecting the research programs to the industry, and that the industry is defining a need that others are actioning, whether it’s academia, the federal government or others.
There is a significant amount of investment that we’re providing through federal programming, as well.
Senator Doyle: Thank you.
Senator Kutcher: Thank you very much. SMEs make up the lion’s share of the food and beverage industry. What challenges do they face that are different than those faced by LEs, both in R&D and export market development? How are those being addressed?
Mr. Valicenti: I’ll start, and then I’ll ask my colleagues to interject.
In the context of the SMEs, they’re smaller; they’re more nimble but yet don’t have the capacity to understand full international markets. If they’re thinking about looking at the EU market, do they understand consumer trends? Do they understand distribution channels? Do they understand what it takes to be successful in the European market? We’re trying to connect them through our trade commissioners on the ground to give them some of that advice, as Christopher talked about.
The larger companies have that ability. We see that through their networks. Whether they have a distribution office in Europe or the U.S., they have more resources at their disposal. We’re trying to tackle some of the capacity issues with the small- and medium-sized enterprises. We do that through our regional network, domestically. They can go and talk to a regional office, either at Agriculture and Agri-Food Canada or at Global Affairs Canada to say, “I’m thinking of exporting to this market. Can you give me some perspectives, advice and strategies to engage there?”
They need a bit more hand-holding. We have some tools that we need to try to tackle and engage.
I indicated that 71 per cent of our exports are to the U.S. It’s closer, there are no language barriers, they understand pricing, shelf life is similar and regulatory framework is similar. It’s easier for them. We see it as a stepping stone. They go to the U.S., see it as a stepping stone, build their network and then look at other markets abroad, whether it’s in Europe, Asia or other areas.
There are specific tools that we use. For example, in agriculture, we have trade shows that many of the SMEs use to build their networks and importer base, again, to try to promote their products. We have different tools. There are some capacity issues, and it’s a matter of engaging.
I don’t know if either Daniel or Christopher want to add to that.
Mr. Miller: There are three areas I think might be relevant to your question.
I didn’t mention this in my remarks, but in my branch I am co-located with Agriculture in the sense that I have a colleague who sits with me and looks after the agriculture component for Marco. As part of that, we at the agency very much see the importance of understanding the market access side, as well as the regulatory side. Structurally, we are doing that within the CFIA and Agriculture.
There’s also the importance of understanding that regulations can be complex. What we have been doing is similar to CBSA in making all of our guidance and regulations to allow people who want to do business in other countries to be aware of their obligations and what they need to do to get into those other countries.
For the Safe Food for Canadians Regulations that we put forward, I mentioned that the regulations came into effect on January 15. The regulations show more flexibility for companies under the $100,000 threshold in terms of the regulations. We have given them more time and provided more aids for them to make their plans to enter into markets, recognizing that in industry, no business starts out wanting to stay at $100,000. They want to grow. We have seen it as an important part of our escalation to provide them with the tools to do that at the agency.
Mr. Wilkie: Marco captured the dynamic very well with respect to SMEs in particular. They need more help in penetrating new markets. Larger firms have departments that can address some of the services that we provide. The services we provide are: market potential assessment to work with the firm on markets they have indicated an interest in; preparation for international markets; problem solving if we get to the point of actually exporting; and qualified contacts, because sometimes the ability to sell in foreign markets depends on an appropriate contact.
We work closely with clients. The regulatory and market access environment through our trade agreements is the water we all swim in. We must take that into account when we’re performing the services for SMEs. That is where the rubber hits the road in terms of our services to Canadian firms and their ability to break into new markets, particularly abroad, which is increasingly an imperative for Canada.
Senator C. Deacon: My question is to the majority of the panel. I heard a lot of really great things from your presentations and a lot of effort being made to streamline and use new technologies to work together. The only key performance indicator I really care about honestly is the steady growth of high-value-added products in Canada and global markets from Canadian producers. In the meetings we’ve had, some of the witnesses we have heard from don’t currently share the confidence that we’re cooperating as well as I’m hearing at a federal level. In fact, it’s hard to get decisions made, a single solution or get different agencies to work together.
As a result, their high-capital investments as producers and processors are generating a lower return than what might otherwise be possible if we had greater levels of cooperation.
I really want to get at what we can do to ensure that what I hear being said is actually coming to life a little more commonly from the perspective of companies and the businesses that are out there struggling to make their way through the red tape and all the different groups they have to work with. It’s the only way we will compete.
I want to hear how much you’re doubling down on this. As much as it has been good news tonight, we have not heard that at all. I challenge you now to say how you are going to double down and start to make a really big difference in uniting these dozens of areas of government that the individual has to keep trying to figure their way through with everybody saying to go somewhere else and talk to someone else. That’s a tough question, but the contrast is stark from my standpoint.
Mr. Miller: I like tough questions. That’s how we get better at dealing with these things.
Let me give two examples of things you may be referring to. Recently, coming back from CETA discussions on meat access to Europeans and different products that want to go to Europe. It was a very successful meeting chaired by GAC with participation from AFC. We were there as the lead in the regulatory environment.
What was happening before we went there? The industry has not been able to take advantage of the quota they have, so that’s part of the story. In terms of auditing the Europeans’ system, we need to ensure our system is compatible with theirs with regard to safety requirements to go over into those markets.
I think we have worked well together in an example like that. I can give you another example as it relates to China and some of the stuff we have done there for access. The current situation is unique. It takes time to get into some of these markets. In the conversations, we can push hard on the Canadian side. It’s the receptivity of other governments and industry as part of that. It’s also important to look at things like logistics such as cold storage, other facilities and proper vendors and brokers. Chris can talk about what that means on the ground.
I think we can do better collectively. I think the agency has demonstrated its current realignment. I hear the frustrations every day from the regulatory people, and that’s part of what our jobs are. It’s very important that we tell the complete picture that there are things that we all collectively can do and are doing in those spaces and we will continue to do at the agency.
Senator C. Deacon: Does urgency require somebody owning the file more completely than is currently the case? It’s Canada’s largest commodity export industry and our largest manufacturing industry, but nobody owns the file.
Mr. Miller: From the regulatory side and the work that Chris and Agriculture would do to open up a market to develop it regarding regulations and the urgency on the agency, we prioritize by country. We use the prioritization tools that are out there. We are certainly putting all of our efforts into opening those markets.
Again, I would say we have to rely on the receptivity of those other countries to do what they want for businesses to get the logistics on the ground to be able to move their product in those countries.
Your question is extremely valid in that we can do better collectively. If there is anybody at the table who says we can’t, then we’ve stopped trying and that’s not what we are doing.
Mr. Valicenti: Through the Agri-Food Economic Strategy Table, 15 wise business leaders basically gave us the road map. They talked about more agile regulations, increased infrastructure, both physical as well as digital, labour needs in the short and medium term, innovation and needing to be better at foreign direct investment.
In all those areas, many of us around this table have to play. That is the frame. That is the game plan. We work not only with CFIA in the context of regulations, but we work with colleagues from DFO, Health Canada and the pest management regulatory agency all in driving to look at increasing export sales.
We have been told we need a more agile framework. How do we play and engage together in some of these topics? If we think about market diversification, we are active with ourselves, CFIA and Global Affairs. In the sense of infrastructure, it is engaging with provinces. We know there are dialogues and discussions from an interprovincial perspective and we are engaging on that.
I think the EST was interesting in the sense that the business leaders were saying these are the five areas we want you to work on collectively, and that has spurred additional growth internally to engage in those five areas. I would say in the last 18 months it has been really good to see the dialogue we are having, not only with industry in telling us their focus, but also dealing within government in the context of some of those issues and dealing with some of the challenges that the industry is facing. I think we are really pushing our approach.
Mr. Gaspar: We can point to some important efforts in that regard but mostly on the import stream. I mentioned in my comments the single-window initiative. It’s an important one for the agency and it very much is premised on exactly what you mentioned, the need to provide that singular experience and to really own the experience. We’ve been at this for some time now. I’m pleased to report this year we are expected to bring to a close the delivery of a new portal whereby importers of products into Canada will be able to have single window shopping with regards to all the different rules they have to conform to, all the information draws. Different departments have different requirements of advanced information in order to bring products into Canada. That’s really what this is intended to be is a single form that they will be able to fill out and make their request for a release of goods.
On the export side we don’t have similar programs because there are fewer sets of controls on export and they are more targeted and focused on certain products that are either in national security or other interests. With the demand it’s perhaps not as great but we certainly are mindful of the requirement to cooperate as much as possible and investing in where and as appropriate.
Mr. Wilkie: Yes, we do have service standards as well. We know how important it is to respond effectively and quickly to client firms that have concerns in foreign markets. We work closely with our ag colleagues as I think I have described and we can always do better. It is a tough, competitive environment. I think many of the problems that firms have referred to more recently have been outside our domain but they are what we are dealing with at the pointy end when we’re abroad. Numbers are great on exports to the EU, but there are individual commodities that have been hard hit and they are hard hit in areas that our representatives abroad have to deal with directly.
Can we do better? I think we’ve all agreed yes. Foreign markets are increasingly difficult to crack and I think we do a pretty good job, notwithstanding the fact that we can always do better.
The Chair: I will mix things up here a bit. We are going to bring our next panel to the table and leave the first panel intact.
We have with us tonight from Innovation, Science and Economic Development Canada Andrea Johnston, Assistant Deputy Minister for Innovation Canada; Mesmin Pierre, Director General, Trade-marks Branch, Canadian Intellectual Property Office; and Iyana Goyette, Deputy Director, Trademarks Branch.
Who is making the presentation?
Andrea Johnston, Assistant Deputy Minister, Innovation Canada, Innovation, Science and Economic Development Canada: I have remarks and my colleague Mesmin has remarks as well. Thank you very much for the invitation on behalf of the ISED portfolio. I’m here to talk a little about the Strategic Innovation Fund, the government’s supercluster, and Marco talked about the economic strategy table so I will quickly go over that. Those are three key areas where we feel the Department of Innovation, Science and Economic Development have supported the value added in the food sector.
Launched as part of Budget 2017, the Innovation and Skills Plan represents a major redesign of innovation policy to support business R&D and commercialization. The Innovation Supercluster Initiative is a key component of the plan. The government is investing up to $950 million in large-scale collaborations between the private sector, academia and government to accelerate innovation by bringing industry partners together in new ways, challenge them to set the bar high and pursue priorities that will supercharge their local innovation ecosystems.
This industry-led program is of an unprecedented scale in Canada. On February 15, 2018, five superclusters were announced. These superclusters are expected to generate $50 billion in GDP and 50,000 jobs over the next 10 years, representing more than 450 businesses and 60 post-secondary institutions across Canada.
From West to East the successful superclusters are: the Digital Technology Supercluster based in British Columbia, the Protein Industries Supercluster based in the Prairie provinces, the Advanced Manufacturing Supercluster based in Ontario, the SCALE.AI Supercluster based in the Quebec-Windsor corridor and the Ocean Supercluster based in Atlantic Canada.
[Translation]
Our government is investing up to $153 million in the protein industries supercluster. This supercluster will increase the value of key Canadian crops, such as canola, wheat and pulses. It will serve the expanding middle class in high-growth foreign markets. Through plant genomics that improve nutrition solutions and digital solutions from farm to fork, the supercluster will help Canada capture premium markets for its agribusiness and feed the world.
[English]
Over five years the superclusters are expected to deliver collaborative projects and activities. For example, in PICs we expected to see ecosystem-wide benefits that include: new opportunities for Western Canadian entrepreneurs, researchers and students; capital investment, market and business development services to support the success of growth-oriented SMEs; and dedicated training that will grow the next generation of talent.
The superclusters are kicking into high gear. They are currently hiring staff, developing project selection processes and finalizing strategies. We can expect within the coming months the announcements of the PIC five-year supercluster strategy, a membership launch and a call out for projects.
[Translation]
I also want to take this opportunity to speak about two other initiatives that support the food processing industry. These initiatives are the economic strategy tables and the strategic innovation fund.
[English]
As part of the Innovation and Skills Plan, six industry-led, sector-specific Economic Strategy Tables were created to identify innovation bottlenecks and further opportunities for supporting innovation across Canada’s industries. These tables released the report in fall 2018 and outline specific targets and proposals.
It’s worth mentioning that the Agri-Food Economic Strategy Table was one of the six tables, demonstrating the strength and importance of this sector to the national economy. My colleague Marco talked a little bit about the recommendations, so I will not go forward in detail.
Another ISED initiative that supports the valued-added food sector is the Strategic Innovation Fund. This program takes a new approach to spurring innovation by supporting all sectors of the economy and strengthening supply chains. SIF, or the Strategic Innovation Fund, provides contributions of more than $10 million to firms across Canada. The program aims to encourage R&D to accelerate commercialization, facilitate the growth and expansion of firms in Canada, attract and retain large-scale investments in Canada and advance large-scale industrial research, development and technology demonstrations through high-impact collaborations.
In December 2018, we launched a competition to develop and deliver a large-scale disruptive approach to automation and digital technologies within the agriculture and agri-food supply chain. This competition is now closed and successful applicants are expected to be announced this spring.
[Translation]
To reflect the importance of innovation in the food processing industry, Budget 2019 announced that the program will allocate $100 million to spur innovation in the food processing sector. We’ll continue to work with our partners to identify eligible projects.
[English]
There are many other interesting areas that I could talk about within the portfolio such as the National Research Council that supports innovation and the value added as well as the regional development agencies, but I recognize the time. I thank you for the opportunity to present those three key initiatives.
The Chair: Thank you. We have a few people left over from the first round who have yet to ask a question.
Senator McIntyre: Thank you all for your fine presentations.
My question is directed to Mr. Valicenti. On page 2 of your opening remarks, in the section entitled “Recent Industry Performance and Structural Challenges,” you mention that industry stakeholders have expressed concerns about challenges in accessing labour. That said, and as I understand it, there appears to be a labour shortage in the agricultural sector, primarily in light of the sectors unattractiveness, particularly due to the physical demands of the work, the seasonal nature of the work and the sometimes isolated locations of agricultural operations.
What factors account for the agricultural sector’s unattractiveness to Canadian workers, and what measures could be taken to make the agricultural sector more attractive to Canadian workers?
Mr. Valicenti: My colleague talked about some of the recommendations that came out of the Economic Strategy Table. It was very interesting to hear the dialogue among the business leaders. They weren’t only talking about the current labour shortages. We can acknowledge that in the context of the processing sector, whether you are talking meat, or fish and seafood, we’re seeing a high turnover specifically in the context of location and job satisfaction within those sectors.
It was also interesting that the Economic Strategy Table also talked about some of the longer-term skills and development that are needed. If you think about new technologies, and you are thinking about robotics or automation, do graduates coming out of universities or colleges have the appropriate skill sets to meet the demand of where these new technologies are going in two, three or five years? We and our colleagues from ESDC, ISEDC and IRCC are looking at how we manage using new technologies and meeting some of the those labour challenges, and whether we have the right skill sets.
It’s not just thinking about the here and now but also four to five years from now.
In the context of the shorter term, as part of Budget 2019, we saw an agriculture pilot announced. Also, as part of the provincial nominee program, additional spaces were provided through the IRCC and engaging with the provinces. I think we have seen successes in the past. We have seen, in Manitoba, for example, the work on meat processing, trying to define those labour gaps and looking at how we address some of those shortages through the provincial nominee program or some of the pilots announced in Budget 2019.
The Chair: You may have a short question, Senator McIntyre, but we missed a preparation. I was not aware that Mr. Pierre from the Canadian Intellectual Property Office section was going to make a presentation.
Senator McIntyre: This question is directed to the Canadian Food Inspection Agency. This committee has learned that truckers currently wait a long time for the Canadian Food Inspection Agency to process trade data. As a result, they are delayed for hours at the border while their cargo is being cleared.
What inspection procedures must Canadian carriers undergo, and does the Canadian Food Inspection Agency have the necessary funding to perform its inspections in a reasonable period of time?
Mr. Miller: In terms of the question for the border, are you referring to coming into the country or leaving?
Senator McIntyre: Both.
Mr. Miller: In terms of coming in, I’ll rely on my colleague from CBSA to help out with an answer, because they are the ones that have the border control. They also operate with our air system and the required paperwork Fred talked about earlier.
In terms of inspection coming into the country, we work closely under regulatory cooperation with the United States to ensure that our regulations in certain areas — we work with industry on both sides of the border, with colleagues in the USDA, for example, to ensure we are streamlining where we can on regulations to minimize time. Paramount to everything is our safety.
We are also working toward moving electronically. One of the strategic priorities of the agency is around e-enablement in terms of electronic certificates we had talked about. We are currently working on that as a project to help with industry to be able to move cargo, whether at the borders or whatever mode of transportation it comes through into Canada.
Mr. Gaspar: For importers of food or any products, advanced commercial information is required before the commodity arrives at the border. In that case, I’m pleased to report that the vast majority receive machine or automated release notices back. The systems are fully automated.
If information we receive through our national targeting centre activities suggest that a certain shipment requires inspection or closer examination, then at that point, yes, they are referred to a secondary inspection. That can delay them.
In addition, there is the random check authority that border services officers have when they take note visually of anything that might cause concern. The vast majority of shipments coming into Canada are released automatically, based on the platform available for importers.
The Chair: Thank you. Mr. Pierre, please make your presentation.
Mesmin Pierre, Director General, Trade-marks Branch, Canadian Intellectual Property Office, Innovation, Science and Economic Development Canada: Thank you, Madam Chair and members of the committee, for your invitation to speak to you this evening on the geographical indication framework on Canada’s Trade-marks Act.
By way of context Canadian Intellect Property is part of Innovation, Science and Economic Development Canada, and it is a special operating agency. We are responsible for the administration and processing of the greater part of intellectual property in Canada. The trademark branch has the mandate to deliver high-quality and timely trademark rights to stakeholders, and includes administering the geographical indication system in Canada.
A geographical indication, commonly known as a GI, is a term used on goods that have a specific geographical origin and are said to possess qualities or characteristics that are essentially attributable to that place of origin. Well-known examples include Roquefort cheese, Champagne, Cognac, Parmigiano Reggiano, Scotch Whisky and Canadian Whiskey.
Canada has what is referred to as an open system, which means anyone can file the requests to have a geographical indication added to the Canadian list of protected terms. Those wishing to add a geographical indication on Canada’s list must submit a request with all supporting documentation, and pay a $450 fee. The term of protection for geographical indication is unlimited. Those who hold the rights can prevent the use of that geographical location by others on goods or products that do not come from that region or location.
Products displaying a geographical indication tell consumers that the product is produced in a certain location and possesses qualities, a reputation or characteristics that can be attributed only to that place of production.
From this perspective, geographical indications can be beneficial to consumers by providing more information on the origin of products and their specifications. In Canada, geographical indications are governed by the Trade-marks Act. Under this legislation, the Minister of Industry is designated as the minister responsible.
On September 21, 2017, Canada expanded the system to include agricultural products and foods and added 172 geographical indications from the European Union as agreed to in the Canada European - EU Comprehensive Economic Trade Agreement Act. This agreement included obligations to recognize and protect a list of European Union geographical indications for agricultural products and food such as certain meats and cheeses.
Prior to September 21, 2017, Canada’s system for the protection of geographical indications applied only to wines and spirits.
As of today, there are a total of 835 geographical indications on the Canadian list. These include 650 wines and spirits and 185 for agricultural products and food.
In closing, the administration of Canada’s geographical indication system is divided between the Canadian Intellectual Property Office and Agriculture and Agri-Food Canada, as set out in a memorandum of understanding between the two organizations, which has been in place for 23 years, since 1996.
Under that memorandum, the Canadian Intellectual Property Office maintains the responsibility for administration of the geographical indication system, which includes the request, examination, publication, objection and listing processes. Agriculture and Agri-Food Canada provides the expertise and information to support the Canadian Intellectual Property Office in formulating recommendations on geographical indication requests.
The handout we have provided offers more information on how requests for the protection of geographical indications are processed in Canada.
I will take this opportunity to thank you, Madam Chair, for your attention, and the members. We are pleased to take your questions on this topic.
Senator R. Black: We heard, while we’ve been travelling with some of our witnesses, about interprovincial trade barriers and municipal barriers. I know you can’t deal with municipal barriers, but what are we doing with interprovincial barriers, and how are we dealing with those issues?
Mr. Valicenti: Again, I don’t want to sound like a broken record, but we got a lot of perspective from the economic strategy table and some of the areas they felt we needed to improve. One of the areas was increased momentum, increased emphasis on reducing some of those interprovincial barriers. For example, one area we talked about that came up with our food processing industry was product of Canada. Product of Canada is basically how much of the ingredients has to meet a certain threshold to be defined as a product of Canada.
We saw that there’s a certain definition for the national, and then there are also provincial definitions. We’re saying, “Why should they be different?” We heard from industry. I can say, just as an example, ourselves, AAFC, along with our Canadian Food Inspection Agency and industry are working to try to come to a different frame and a definition to help support domestic product marketing.
Just an example, that’s one area that has different jurisdictions, different levels. Why? Creating challenges for the sector. Let’s see if we can get ourselves in the room with industry and find a better approach. That is happening. We’re looking at online consultations that are ongoing and closed, I believe, next week.
Senator R. Black: Is that a fix that’s going to happen in a month, six months or five years?
Mr. Valicenti: I don’t want to put any undue pressure on my colleagues from the CFIA. I know they are looking in the next few months. That’s what we’re talking about for that specific example.
Senator Oh: Thank you, witnesses. My question will be directed to the deputy minister. For you, looking at your Strategic Innovation Fund, SIF, you mentioned you have payable and nonpayable contributions for more than $10 million to firms across Canada in the industry and technology sectors. How do you classify nonpayable?
Ms. Johnston: The Strategic Innovation Fund is a new fund started in 2017. It’s a fund that cuts across every economic sector in Canada. Basically, we negotiate with a company that has a project that we consider as transformative; so it has to be over $10 million. In that negotiation, we’ll indicate, in addition to the R&D, how many jobs are you going to create? How many R&D collaborations are you going to have with universities? How many co-ops are you going to create? Based on all those additional considerations, we determine what would be repayable and nonrepayable. If there’s a significant public benefit, then some of the contributions would be nonrepayable. If the benefit derived mainly to the company, then most of it would be repayable.
Senator Oh: This is only to the company, not to institutions, schools, learning centres?
Ms. Johnston: For the most part, the Strategic Innovation Fund is directed toward companies because it’s meant to increase business R&D. There are some projects we have that are collaborative projects where we work with not-for-profits and academic institutions.
Senator Oh: For the Budget 2019, you announced the SIF was at $100 million. That is a lot of money.
Ms. Johnston: Yes.
Senator Oh: And to support innovation and the food-processing sector.
Ms. Johnston: It was just announced, as you know, in Budget 2019. Right now we’ll be working with the industry sector to bring the people together so they can understand. We set the bar high for the Strategic Innovation Fund. They need to know the objectives of the Strategic Innovation Fund. We’ll bring the industry associations, the companies, and then we’ll have a discussion in terms of what the best projects are to move forward.
Senator Oh: How high is the funding?
Ms. Johnston: The minimum is ten, and there have been larger projects above $50 million. But on average they’re between $20 million and $30 million.
[Translation]
Senator Miville-Dechêne: While I was listening to Mr. Pierre, I immediately thought of a recent news item in Quebec. I don’t know whether you can answer my question. However, I’m asking the question because I find that it raises some fairly complex issues regarding the desires of consumers.
We learned, in quick succession, that the apples used to make our Canadian apple juice come from China, and that the chicken used to make Saint-Hubert chicken pies comes from Thailand.
I know that you aren’t in charge of labelling. However, I’ve wondered a great deal about the following idea. If we have, as you say, trademarks—and I know this is a Canadian practice—with Chinese apples and Thai chicken, it’s a little worrying for some consumers.
Shouldn’t we know where our food comes from? Perhaps this would help us better promote it.
Mr. Pierre: As I said earlier in my presentation, our mandate is to give Canadian and foreign entrepreneurs the opportunity to register trademarks or geographical indications. The system really focuses on where products and food come from. Labelling is more a part of the mandate given to my colleagues here.
Our goal as administrators of the geographical indication system is really to create an effective system that provides this recommendation, depending on where the food comes from.
My colleagues may be able to give you more information about the different labelling regulations in place so that better information can be provided to consumers.
[English]
Mr. Miller: I didn’t pick up all of the question. I want to make sure I’m precise on the answer.
Senator Miville-Dechêne: I’m a bit puzzled by the fact that we’re talking about food and about having more value in the food. In some of our products, for example, apple juice, the apples often come from China and nothing is written on the packaging. We just had a big story in Quebec about the fact that in chicken pie from very the well-known producer St. Hubert, the chicken comes from Thailand and it’s not written on the package. None of that is known.
If we want value added to our food, we also want to know where the ingredients come from. Are you interested in that problem? Do you think it’s a problem? What can we do about it?
Mr. Miller: I had the opportunity of launching, back in 2013, the food labelling modernization within the agency. We did extensive consultations across the country. Country of origin was one of the issues that came up as part of that.
As part of the Safe Food for Canadians Regulations now, all countries that import into Canada are responsible for labelling requirements. Mesmin Pierre is here as part of the team that’s now leading that work.
In terms of the identification of products and where the things are coming from, if it’s manufactured or processed here, in terms of ingredients as part of what’s there, there’s the ingredients list but you don’t have to specify where the ingredients come from in the ingredients list.
Senator Miville-Dechêne: Is this a problem, according to you?
Mr. Miller: I know that consumers are asking for more information, not less, around what they eat.
The other side of that coin is that industry also has concerns about the amount of labelling space they have on particular products in terms of packaging. What we’ve heard out of our consultation as we move forward to come to solutions on those very topics, I can speak about what that policy is currently. I think what you’re talking about is our future. I think the on-demand convenience economy and people wanting to have more information about where their product comes from, geographical indicators, who makes it and what labour was involved is a very big trend in labelling around the world. The labelling space on a particular package is limited.
Senator Miville-Dechêne: Are you reviewing it?
Mr. Miller: One of the things we are very interested in is labelling beyond what everyone probably around this table would constitute as a label on a food product. This might be the label of the future, which provides access to information for people who have special dietary needs. Are we looking at that? We certainly are. I think in terms of advantages for Canadian consumers and producers, that information is important.
I’ll close by referring you to the online labelling tool put together by the Canadian Food Inspection Agency, which provides information to consumers and industry about what labelling requirements are and their opportunity to understand the labelling environment as part of that.
The future of labelling is not traditionally what people would consider to be labelling. If you’ve heard terms like block chain, where people want to know where their product comes from, in the future they will probably be able, with GPS, tell you what farm it came from. That future is probably there.
Senator Moodie: Thank you for your excellent presentations.
My question is directed to Assistant Deputy Minister Andrea Johnston. I’m thinking about your Strategic Innovation Fund, which is a large investment of money. How do you define success? How do you balance this whole idea of accountability and too much regulation, perhaps, versus encouraging inventiveness, innovation and sustainability? How do you define all these things? These are things that, at the end of the day, we want to know our return on investment will ensure that all of these things are present.
Ms. Johnston: Maybe I will step back a bit. The government has announced close to 40 projects under the Strategic Innovation Fund totalling $1.12 billion in federal government contributions. That’s fairly significant. But what has that really created? That’s created over 54,000 jobs in Canada. We’ve secured $8.4 billion in private sector R&D commitments. We’ve reduced over 8.75 million tonnes of greenhouse gas emissions, so that is another area in which we work with the companies in terms of reducing greenhouse gas emissions. Our R&D commitments have leveraged an investment of over $10 billion in Canada from the private sector. We’ve obtained over 7,500 co-ops and training opportunities.
What we’re trying to do is leverage federal funds to get as big a bang out of our buck as possible and in many areas in terms of jobs, training opportunities and greenhouse gas reductions.
As I said earlier, the bar is set pretty high because we are looking at transformational-type R&D projects. We have a large pipeline. Many companies in Canada are interested in applying so we continue to look at projects that cut across the six economic strategy tables or the six economic sectors.
For us, our ability to negotiate over $1 billion in projects since the launch of the program in 2017 is a success. We’re also happy with the additional benefits, such as the job creations and GHG reductions.
The Chair: We’re pretty close to the end here, folks. I know we had a couple of people on second round and I have to apologize — okay, one tiny question.
Senator C. Deacon: I want to reinforce what I said earlier, that in the challenge of so many different hands in the pot slowing things down, trying to speed things up and whatever else, there are so many different parts of government. We heard another huge one in Health Canada and food labelling. The opportunity for traceability and for that to be a competitive advantage for Canada is that we can offer food to Canadians and the world that is traceable right back to the producer and provide confidence.
We have to get really strategic, really quickly, and we have to make sure there are departments that have a lead and can make decisions and get things done in a speedy way. The producers and the processors are not feeling the good news that I think you’re delivering. That’s what we’re hearing loud and clear. It’s a real concern to me. I believe that you’re working hard. There are some strategic opportunities here that are huge for Canada, but we have to move fast because the world is moving faster than us.
The Chair: Is that a speech?
Senator C. Deacon: That was a speech.
The Chair: As opposed to a question.
Senator Kutcher: Tidal Bay in Nova Scotia must be one of those GIC wine designations, is that right?
Mr. Pierre: Yes.
Senator Kutcher: How do these GICs relate to Brand Canada? We heard previous testimony that said that Brand Canada was recognized, but the sub-brands weren’t, and that the labelling would take away from Brand Canada. Are these GICs a value add to export or a minus?
Mr. Pierre: When we look at geographical indications, they are a value add to exports. They provide information for consumers. They provide a uniqueness to the product and food. People look for them. Some countries have a significant number of geographical indications.
With respect to the specific area you’re mentioning, it’s a bit new to me. I don’t know, Ms. Goyette, if you have further information. From what we understand and the interaction we have with our counterparts, geographical indications are definitely value added to the system.
The Chair: Guess what I’m going to do? I’m going to thank our panellists and adjourn the meeting.
(The committee adjourned.)