Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 66 - Evidence - Meeting of May 14, 2019
OTTAWA, Tuesday, May 14, 2019
The Standing Senate Committee on Agriculture and Forestry met this day at 5:02 p.m. to study the subject matter of those elements contained in Subdivision C of Division 9 of Part 4, insofar as it relates to food, and in Subdivision J of Division 9 of Part 4 of Bill C-97, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2019 and other measures.
Senator Diane F. Griffin (Chair) in the chair.
[English]
The Chair: I’m Senator Diane Griffin from Prince Edward Island and chair of the committee. This evening the committee is going to begin its pre-study of the subject matter of those elements contained in Subdivision C of Division 9 of Part 4, insofar as it relates to food, and in Subdivision J of Division 9 of Part 4 of Bill C-97, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2019 and other measures. For this meeting, we will be concentrating and Subdivision C of Division 9 of Part 4 as it relates to food.
Before we hear from the witnesses, I would like to ask senators to introduce themselves, and we’ll start with Senator Mercer.
Senator Mercer: Terry Mercer, Nova Scotia.
Senator C. Deacon: Colin Deacon, also from Nova Scotia.
Senator R. Black: Robert Black from Ontario.
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Senator Miville-Dechêne: Julie Miville-Dechêne from Quebec.
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Senator Bernard: Wanda Thomas Bernard also from Nova Scotia.
Senator Wallin: Pamela Wallin, Saskatchewan.
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Senator Dagenais: Jean-Guy Dagenais from Quebec.
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Senator Oh: Victor Oh, Ontario.
Senator Doyle: Norman Doyle, Newfoundland and Labrador.
The Chair: You will notice there is a very strong Atlantic Canadian contingent on this committee. Senator Bernard and I have the same issue — we are vertically challenged.
Thank you panellists for joining us this evening. For our first panel we have, from Food and Beverage Canada Kathleen Sullivan, Chief Executive Officer, from Maple Lodge Farms, Michael Burrows, Chief Executive Officer. And from Bonduelle Americas, we have Daniel Vielfaure, the Director General.
Thank you, folks for accepting our invitation to be here. After you make your presentation, the senators will have some brilliant questions for you. We will start off with Kathleen Sullivan to make her presentation.
Kathleen Sullivan, President and Chief Executive Officer, Food and Beverage Canada: Thank you for having us. I’m Kathleen Sullivan. I feel I should disclose that my family is from Amherst, Nova Scotia. I feel I’m in good company.
It is a pleasure to appear here. I have good fortune that my board of directors was meeting here in Ottawa tomorrow. I have the pleasure to be joined by my two co-chairs Michael Burrows, CEO of Maple Lodge Farms, and Daniel Vielfaure, CEO of Bonduelle Americas.
Food and Beverage Canada is a national industry association that represents about 1,500 food and beverage manufacturing companies from across the country. Our members include provincial food and beverage associations like Food and Beverage Atlantic as well as Canadian food and beverage companies.
Before I hand it over, I would like to note that, because my board is in town, also joining me is Tammy Brideau, Executive Director of Food and Beverage Atlantic. We have Scott Woods who is with Ingredion, and Phillip Murphy-Rhéume. We have a number of prominent Canadian companies here, if there are a few minutes for you to chat with them about issues and the companies in your ridings.
Michael Burrows, Chief Executive Officer, Maple Lodge Farms: I’m Co-chair of Food and Beverage Canada and I chair Food and Beverage Ontario.
Maple Lodge Farms is Canada’s largest independently owned poultry processor, founded in 1955. The family started farming in the 1830s and started working with eggs in the 1930s. We employ about 3,000 Canadians at eight facilities in Ontario, New Brunswick and Nova Scotia. And we have Eden Valley Poultry which is in Berwick, Nova Scotia.
I understand that this committee recently undertook a study on how Canada’s value-added food sector can be more competitive in global markets. This included a round table with Food and Beverage Ontario and Food and Beverage Canada last month in Toronto. From this work you would understand the importance of Canada’s food and beverage manufacturing sector to our country’s national and provincial economies.
Food and beverage manufacturing contributes more to GDP and employment than any other manufacturing sector in this country and is the number one manufacturing sector in most provinces.
In 2016, Canadian food and beverage manufacturing shipments were worth just over $112 billion and our sector employed over 250,000 Canadians. Over the past few years, we have been pleased to see the federal government identify food and beverage as a priority sector. This led to last fall’s agri-food Economic Strategy Tables report, which challenged the agri-food sector to expand domestic sales to $140 billion and export sales to $85 billion by 2025. That’s a 30 per cent increase over the next seven years.
The Strategy Tables also identified five key areas requiring attention: regulation, labour, innovation, infrastructure and trade. We were initially optimistic about the agri-food Economic Strategy Tables report but are now concerned about whether its objectives are achievable. I will turn it over to my colleague to speak further on this matter.
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Daniel Vielfaure, Director General, Bonduelle Americas: I am Daniel Vielfaure, CEO of Bonduelle Americas. I am also Co-chair of Food and Beverage Canada, Chair of CTAQ, the association representing food and beverage manufacturing companies in Quebec, and Chair of Agriculture and Agri-Food Canada’s Food Processing Industry Roundtable.
In Canada, Bonduelle leads in frozen and canned vegetable production. We are one of Canada’s largest food manufacturers, employing almost 2,000 people at eight facilities: four in Quebec, three in Ontario and one in Alberta. Food and Beverage Canada was formed to be a partner with government in realizing our sector’s potential to contribute to Canada’s economic growth and prosperity.
For that reason, we were very optimistic when the Agri-Food Economic Strategy Table report was released. Unfortunately, after eight months, that report has yet to be endorsed by the federal government and, while some commitments have been made, there is no significant progress on many of the report’s key recommendations including labour, innovation and regulation.
On regulation, we acknowledge that the federal government made a number of commitments related to regulatory modernization in the fall economic statement. We support these, but we need to be realistic about Canada’s regulatory development process. It is not forward-looking. It is not collaborative. And often we see conflict in the government’s own economic and regulatory goals.
As a case in point, this committee has been asked to review certain provisions of the Budget Implementation Act related to the Food and Drugs Act. The bottom line is that we don’t know what the proposed amendments will mean with respect to the food environment in Canada. We were not consulted on the revisions and are not clear what, if any, difference they will make.
We are also unclear how they relate to the Safe Food for Canadians Act. We are particularly confused given that Treasury Board has spent the last year working on a comprehensive review of agriculture and food regulations and has promised to publish a regulatory road map in the next few weeks. It is unclear how or if the proposed changes in the Budget Implementation Act relate to that process.
We acknowledge that regulation plays a key role in shaping Canada’s business environment and in ensuring food safety. But businesses need certainty and stability. We need much better coordination and communication around regulatory changes.
We look forward to discussing all of these issues with you and thank you again for this invitation to appear.
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The Chair: Thank you for the excellent presentations; nice and concise. We like that.
I must mention to senators as well as the witnesses that in about five minutes you will see lights flashing in the room and bells ringing. There will be a vote at 5:30. We suggest that we pause the meeting at 5:20. We will leave you here, and you can have a coffee. We’ll come back when we finish the vote and pick up where we left off.
Senator Mercer: I’m going to try to be concise, chair. Thank you for being here and for the excellent presentation. You talked about last fall’s agri-food Economic Strategy Tables report and you laid out what some of the challenges were to expand domestic sales to $140 billion and export sales to $85 billion by 2025, a 30 per cent increase overall — very aggressive targets. If government does what it says it is going to do, can you meet those targets?
Ms. Sullivan: No. I think where we have commitments from governments so far have been on regulatory modernization. I think those are impressive commitments and initiatives that have been promised, which I believe are under way.
I think where we are going to fall short is particularly in two fronts: labour and innovation. I know a number of you have had a chance to meet with me at a round table we held in Ontario last month. When we talk to food manufacturing companies in Canada, virtually all will say labour is a number one issue. This is a chronic structural issue across Canada right now. If we do not start to get our heads around this problem and lay out long-term plans, those plans will have to be on multiple fronts. That is, how do we increase the labour force by tapping into underrepresented groups? What is the role of foreign labour in that and how do we look at automation to help us? Unless we look at innovation and labour, we will unfortunately fall short of those targets.
Mr. Burrows: If I can add a comment and give an example, we have about 3,000 employees in all of our eight facilities. We have chronically about 200 positions that are unfilled. These are skilled positions in varying aspects of our plant. They are starting to impact our productivity and certainly our ability to continue to grow at the rate we have grown over the last 10 years.
Senator Oh: My question just got stolen.
The Chair: Those Nova Scotians.
Senator Oh: You say that you are focusing your export sales are going up to $85 billion by 2025. Which area are you looking at for your export, the U.S., the Pacific Rim, EU?
Mr. Vielfaure: We are looking at all the options that governments are negotiating with the trade agreements that Canada is having with a lot of different countries and regions in the world. That’s really helpful. Let’s not kid ourselves, these agreements help us to have access. Regulations are made easier, things like that, and tariffs are somewhat low or non-existent. That’s very positive.
Obviously, our biggest output today and in the future will remain the U.S.A. It is close and, in a lot of cases, we sell food as a fresh item and transportation is a challenge of time and everything. But we need to develop other countries. Canada cannot continue to depend so greatly to export only to the U.S. These trade agreements with Europe, with the trans-Pacific and with others are very welcome for your industry.
Senator Oh: After the new trade agreement with U.S., you see that it is not a permanent way to now do business, we have to shift and have a new strategy going elsewhere?
Mr. Vielfaure: It is always better not to have all your eggs in the same basket. Clearly, that’s what we want. The trade agreements that the Government of Canada has negotiated with other regions and other countries in the world is a good thing.
Mr. Burrows: Canada has a great badge internationally, where we are very respected. From a product perspective, we’re seen as being premium quality, natural, great food safety. We have a very good halo around us. Our opportunity is to capitalize on new technology. Daniel talked about fresh. In our case, in our company, about 15 per cent of our exports are outside of North America. That would be a vast majority of our exports. We see huge opportunities there for premium-priced products and outstanding quality. Our opportunity is through innovation, which we have a focus on. That is, to take new technology that will allow us to ship fresh product that will have a much longer shelf life. It is advantageous in many of the international markets because, candidly, their distribution systems sometimes lack integrity. You are better to have fresh than frozen. Not only is it better accepted by consumers, who pay more money for it, but the distribution network has more integrity.
Senator Oh: With respect to labour, you were saying that there is a big shortage of labour. The government is working on 1 million new immigrants coming into Canada for the next two years. Would you not be working with the government on the particular category that you need as far as new immigrants coming in?
Ms. Sullivan: Yes, we would love to do that. First of all, foreign labour is not the full solution to the problem. It’s part of a solution to a sort of structural deficit in labour.
When we look at foreign labour, we are looking at two different groups. One is for seasonal workers, what you think of temporary foreign workers. Daniel is dealing with fresh produce. There is a seasonality to the products his company is packaging and processing.
We also have a deficit in permanent jobs. Unfortunately, what we have right now, because of how our immigration streams work, is it is very difficult for the people who work in our plants to accumulate enough points to qualify in various provincial nomination programs.
We absolutely have permanent jobs and believe there are skilled foreign workers who would be wonderful additions to communities and companies. What we don’t have is a system set up that works for our industry and the kinds of jobs we have.
I want to be clear. Obviously, we don’t have jobs for doctors. We have some high-tech jobs, but our jobs are skilled and well-paying jobs. They are jobs, in the communities that we are active in, that can support families and bring families into communities which in a lot of cases help solve problems in terms of keeping rural communities alive.
We have to start having a conversation about how we set up an immigration stream that will allow us to bring in future Canadians who are what most of us were at one point and are going to need to keep the economy growing.
The Chair: I’m going to have to put the meeting on pause. Hold all those thoughts, folks. We will return after the vote.
(The committee suspended.)
(The committee resumed.)
The Chair: We will reconvene the meeting. We have a list of questioners.
Senator C. Deacon: Thank you to each of you for being here. It’s nice to see you again, Ms. Sullivan.
We’re looking at Bill C-97. I want to know specifically what concerns you have. I hear your broader concerns quite clearly and appreciate the urgent need for regulatory modernization. The phrase that was used in the table report of “regulatory agility,” I think was used, kind of concerned me because I don’t think we want regulations that are changing all the time. We don’t want them to be too agile because that doesn’t give you the certainty and consistency. I think “modernization” I like as a term that you used.
You put forward three macro issues: regulatory modernization, labour and innovation. I see innovation certainly tied in with the labour issue in terms of how we use new processes and approaches to change our labour needs over time in a productive way. If you can focus in on our pre-study work on Bill C-97 and be as specific as you can as to what you want us to look for, what you’re worried about, where you see change is needed, concerns or things that are being done right.
Ms. Sullivan: I’m happy to comment specifically on Bill C-97. I suppose the pieces of the bill we’re looking at most seem to be some sort of a reorganization of the enforcement and inspection provisions under the Food and Drugs Act.
What the potential implication is — and I think this is where your concern lies — I don’t know. We weren’t made aware that the changes were coming. We don’t know how they fit with the Safe Food for Canadians legislation that came into effect earlier this year. We don’t know how it fits with what we might see in the regulatory roadmaps that are coming, we hope, later this month. We have no way of understanding the potential implications. It could be innocuous; it could simply be a reorganization of powers that already exist. We just don’t know.
I think the concern we have is that we have 6,000 companies in this industry, over 90 per cent of which are small companies. They are trying to figure out some of these structural pieces that we talked about. Should we be spending all of our time trying to figure out how these changes fit with the Safe Food for Canadians Act or with regulatory roadmaps coming up? It would have been a lot easier if industry had been given a heads-up of what these are and mean.
I’m not trying to be hard on anybody. I have worked with government for years. I fully believe that government officials are doing the best with the resources they have. This is just an opportunity to highlight that we all have limited resources and we need to find a better way of doing this. What this means, I don’t know. I don’t know what the regulations are that accompany this; I don’t know if those regulations are going to differ from the regulations that currently exist. We simply don’t know.
Senator C. Deacon: If I could sum up what I think I’ve heard. There is a real concern that the government is not demonstrating the first steps of working with industry to modernize regulation in a way that enables all sides to win, which we believe is possible. We also, I think, have heard very clearly that there needs to be a streamlining of regulation, especially as it relates to municipalities, the provinces, federal government and all the different areas in the federal government. We get and empathize with that. The message I’m hearing from you — and please correct me — is we need to see a new culture of working together to make this happen effectively going forward.
Ms. Sullivan: I completely agree, yes.
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Senator Dagenais: I have a question for each of our witnesses.
First, Mr. Vielfaure, if the government does not consult you and, most importantly, does not consider your recommendations, who do you think is influencing the government in terms of the changes in this budget?
Mr. Vielfaure: It’s hard to say; it would be speculation. I don’t know. However, to partially answer your question, not being consulted is very troubling. I don’t mind if the government consults other people. Everyone has a voice, everyone has a right to influence and express their needs in a constructive way to create a better economy for Canada. That was sort of the mandate of the Barton report. The objectives being put forward are very aggressive; that is very good, and we are ready to achieve them.
However, our industry must be consulted. The food processing sector is probably one of Canada’s largest manufacturing employers, with over 250,000 jobs, and most importantly, jobs across Canada. Our sector is certainly the most widespread in Canada, because we have many SMEs in the regions, where most of the agriculture happens. In this way, we truly represent all Canadians from all provinces, backgrounds and regions. It’s frustrating not to be consulted.
Senator Dagenais: Thank you.
Ms. Sullivan, do you think this budget is likely to encourage the sale of products in Canada from the United States, where production conditions seem much more open than in Canada?
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Ms. Sullivan: Competition is a tricky thing. If you want to be a healthy and vibrant industry, you have to be willing to accept and embrace competition. Where I think challenges arise in the Canadian context is when companies feel that from a competitiveness standpoint the burden of regulation makes it more costly for Canadian companies and perhaps for companies that are bringing their products in.
From a food safety standpoint, and I always like to stress this, any food sold in Canada has to comply with the same requirements and standard. It’s not as though, from a food safety standpoint, there’s any risk that products coming in from other countries, the U.S., for example, are favoured from a safety standpoint. There’s often concern that’s raised about whether, from a competitiveness standpoint, we’re on a level playing field. Some of the structural issues raised earlier addressed that.
As an industry, there is no doubt that the Canadian food and beverage manufacturing sector does fall behind some of our other Canadian manufacturing sectors and industries in other countries from a productivity and innovation standpoint. These are systemic issues that we have to work together to get a handle on.
The challenge we often face in our industry is we’re not the auto or aerospace sector. We’re an industry that has a large number of small companies and it creates unique challenges. I think there is a tendency to take programs or think about programs or policies that might impact competitiveness for some sectors and assume they’re going to apply to ours as well. That’s not always the case. We need to start to think about, if we want to promote the food and beverage manufacturing sector, how do we think about how those policy tools and instruments are that will work and fit for us — and tweak them, frankly.
[Translation]
Senator Dagenais: My last question is for Mr. Burrows.
In the report that we are going to submit on the workforce in your industries, I would like us to make a serious recommendation that has clout. Can you tell us whether we should tackle the problem in terms of the bureaucracy or rather in terms of the qualifications of available human resources?
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Mr. Burrows: I think the approach to labour needs to be multifaceted. I think on the one side we need to work to encourage our youth, young adults, to look at trades as an opportunity.
There is a huge opportunity in Canada right now and a shortage in the trades area. I’m talking about electricians, HVAC, mechanical engineers. We have seen in the food and beverage sector a real shortage. Part of this has to do with not having a clear path of encouragement through the colleges and universities in the country.
We suffer because in my generation, the idea was that our children were to become professionals of some sort. We’ve missed out on this opportunity. We need to put energy into ensuring that the young are aware of the great career potential that exists in trades.
Along with that, we need to reconnect our young with the food and beverage industry. I was born and raised on a farm. If it wasn’t for what I do, my adult children today would have no concept about farming. Many of their friends have never been to a farm. They can’t describe what goes on there. We’ve had a disconnect, and we need to be able to reconnect with food.
What’s fascinating to me is they have an interest in it. They look at food as something that’s going to nourish and fuel their bodies. In my generation, it was more of a tummy stuffer. We inhaled the food. They are in a good position to engage in our industry. We just haven’t connected with them, and we haven’t been sexy in the same way.
The third part, which was already addressed, was the opportunity through immigration to be able to focus on certain skilled labour that we’re missing in our plants that we can access through immigration. Again, these are jobs that are paying $40,000 to $60,000 a year. We’re short now 25 truck drivers. Their salaries are in the $80,000 to $100,000 a year range, which I think is great potential.
[Translation]
Senator Dagenais: Thank you.
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Senator R. Black: I’m disappointed to hear once again that the government has not consulted with you folks. It seems to be a recurring issue that we’ve heard, at least during my time on this Agriculture and Forestry Committee.
Had they consulted with you and asked the question about how important is innovation and what does government need to do to increase innovation and automation in your sector, what would you tell them?
Ms. Sullivan: As a back story, innovation has been a challenge in conversation for us in the last little while with government. I think the hallmark program that has been announced is called SIF, the Strategic Innovation Fund. The last round was handed out in $10 million chunks. To qualify, you have to have a $20 million project. It’s matched funding.
There are 6,000‑plus food processors in this country, and 90 per cent of them have fewer than 100 employees. The vast majority are not companies that will be investing $20 million in capital projects.
Often the innovation investments require that you are creating jobs. We have a structural deficit of employees in our industry. The last thing we want to be doing is creating more jobs we can’t fill. In fact, a lot of times when you’re looking at innovation from an automation standpoint, what you’re really trying to do is the opposite. You’re actually rationalizing the labour force but, at the same time, increasing the skill level of the jobs because you’re looking at workers with higher skills.
There is learning that has to take place. The government needs to sit down with us. We need to start having conversations and really get into the plants and understand what innovation looks like. What are the hurdles to some of these mid-sized and small companies being able to scale up?
I know you had the fortune of touring some processing plants in Ontario last month. The vast majority of companies would not be the size of the companies you were looking at. We need to start to customize programs to look at how do we support small and mid-sized companies that need to invest in innovation and automation to start to scale up their production?
Looking back to the trade piece, Canada has negotiated an incredible suite of trade agreements, nothing like this country has ever seen. A lot of the potential in those trade deals is for small and mid-sized companies. There is a lot of growth that is possible from that cohort within our industry. We need to be focusing on how we empower them to grow. The term I use is “scale up.” That has to be a joint commitment to take a look at that and understand the industry better.
Mr. Burrows: If I may add a comment. It’s also prudent to understand what innovation means. It will be different for Google and Amazon than it is for the food and beverage industry.
The role of innovation is more about automation. It’s about meeting increasingly tough standards for food safety. They’re only getting tougher, which is a good thing. I have no issue with it. It’s around food safety, animal welfare and packaging.
We’re entering, in my view, a very interesting five-to-ten-year transformation where some very clear fundamentals — packaging is a great example — are going to be reinvented. We need to be able to, as an industry, particularly the small and mid-sized companies, access that and do it in a way that’s productive.
Mr. Vielfaure: For packaging, for example, the small companies will have to be able to invest in these new technologies to handle new packaging. That will mean a lot of money.
Like Kathleen talked about, a lot of our members are small companies. That’s the beauty of our industry. That’s why we’re spread in all of the regions. That’s why we create jobs everywhere in Canada. Government likes to have big programs that can be big announcements, or easier to handle one than handling 500. Small accounts.
Ms. Sullivan: If I could just give you a real-life example. I know that some of the committee members who joined the round table that we held in Toronto at Maple Leaf’s ThinkFOOD! Centre. There was a tour afterwards of their test kitchens and test facilities.
Small and mid-sized companies don’t have that kind of equipment and facilities within their plants. They can’t afford those kinds of capital investments. We have to figure out interesting ways of creating community kitchens or test facilities where people can go in. We even have some across Canada, but a lot of companies don’t know about them or use them.
We have some fundamental work. It’s challenging. Even talking to CFIA, for example, with the Safe Food for Canadians Regulations, which now all apply to all food companies in Canada, there’s a new challenge that we have. How do we communicate with 6,000‑plus companies to make them aware of their regulatory obligations, let alone what sorts of facilities might be available for them or policy tools, programs or instruments?
If we’re really committed to this industry, it’s a challenge that we need to embrace. There’s a huge plus side, as Michael said, to having an industry that looks like that. It means we really are creating jobs in every community across the country.
If you think of any province that you are from, you have a food manufacturing sector. In fact, in most provinces, the food manufacturing sector is the largest manufacturing sector in your province.
There are a lot of benefits to having smaller companies and not just larger companies, or benefits to having a large and broad demographic. In order to reap those benefits, we will have to make sure that we’re also ensuring the industries have the tools they need to keep going.
The Chair: Thank you.
Senator Bernard: Both of my questions have been asked and answered. I will ask a supplemental to Senator Black’s question around innovation.
Has the industry partnered with any universities and colleges around innovation? Is there a way that this bill, the recommendations or amendments, would support the development of such partnerships?
Ms. Sullivan: I don’t think legislation is the way to encourage that type of innovation.
To your point about working with universities, we see a lot of individual companies do that. You’ll see different innovation centres crop up — there is one in Ontario, for example, focused on the wine industry — that work with universities and industry to look at innovation in a particular sector or region of the country. We have not done our job as industry to start to invest in them and we are starting to look at how to bring the pieces together across the country.
There is no doubt that we need government assistance. For example, one of our colleagues who is not here now was telling a story of how she was interested in tapping into one of the government innovation funds for investing in equipment, which would have been innovative and would have helped with automation. She was ineligible because the equipment was not made in Canada. The answer was why don’t you spur on an equipment manufacturing industry in Canada. How much do you want to layer on us? In a country of 35 million people, a lot of innovation is taking technologies that may be developed somewhere else and Canadianizing them. There is an innovative element to that as well.
We have to sit down with both the federal government and provincial governments and start to create a community that is looking at the existing innovation resources and innovation hubs that exist in regions, through universities, or in particular sectors. How do we identify the ones we already have and then start to educate industry on what exists and figure out where we could best place government funding. That is, where we have matched programs. There is government funding available, but how do we make sure that the governments that can benefit understand the facilities exist? I don’t think that’s something you legislate. That is cultural, to a previous comment that was made. Ultimately, it’s about people willing to sit down together and try to sort out these problems.
Senator Bernard: Thank you.
Senator Doyle: We are not really into it yet, but I believe the bill talks about the change in classification and reclassification of food and natural health products. How much could the agricultural and agri-food industry be affected and changed with a reclassification of food and agri-food products?
Ms. Sullivan: As I understand in reading it, essentially it allows the government to say where we are now in a world where sometimes foods look like they are in a bit of a grey zone. That is, what we think of food, you may not think of food. It allows the government to categorize is it a food, therapeutic product or a drug? I think the best example for us was around cannabis edibles. Cannabis edibles are not in this particular legislation but it is analogous. They fall under the Cannabis Act not under the Food and Drugs Act and they are specifically defined as not being food. To us, they are food. If I make a brownie that has cannabis in it or one that does not, the product should be subject to the same requirements and standard. This is where we are starting to see, as we take a look at different products that we would consider to be edible — that is, they have nutritional quality, they look like food and they are manufactured like food in food grade plants — that we are starting to define and chop things up. I don’t know the implications of that.
As I understand it and as I read it, it was really done to deal with therapeutic products. Presumably, there will be a spillover on the food side. We saw it on the cannabis side. The cannabis situation has raised concern for cannabis companies. If you don’t have cannabis edibles under the provisions of the Food and Drugs Act, are they really going to be subject to the same level of food safety requirements, for example, as you would have for a product that was identical but did not contain cannabis products in it?
Senator Doyle: Will the changes bring clarity to the industry on what is expected with respect to food and drug makers and what have you? Do you envision this making you better off to see what exactly is required from you or does it muddy the waters a little bit?
Ms. Sullivan: In this case, it muddies the water because I’m not sure of the intent of the changes or the potential implications. We have not seen analysis. In the case of these revisions, it muddies the water a bit. In the case of the Cannabis Act with the regulations that are specific to cannabis edibles it muddies the waters too. Companies are confused about the difference between an edible product versus what we consider to be food.
I think at this point that particular provision without any additional information caused me confusion about what the implications might be.
Senator Doyle: The consultation with the industry was not, in your opinion, what it should be? I think somebody mentioned it before. Why would government embark upon a bill that has some very important changes and the main players in the industry have not — I’m not trying to be political here, I’m just trying to get at the reasoning why consultation with the industry is not what it should be? We are hearing that everywhere, every committee member who comes in.
Ms. Sullivan: People will say I have a soft heart. I think we have a real disconnect. I am going to believe that everybody believes they are doing the right thing. I think there is a significant disconnect between what industry considers to be consultation and often — and I’m not talking specifically about this piece of legislation — what government considers to be consultation. I don’t believe there is necessarily any ill intent, but there is a huge disconnect. I’ve experienced it myself. There is a huge disconnect when government departments consider that they have consulted with industry and industry feels like they are out in the dark. It doesn’t matter at that point who is right or wrong. We have a problem; we have a gap. We need to figure out how we fix that.
Senator Doyle: What are advanced therapeutic products as opposed to therapeutic products? What do you see as advanced therapeutic products? For that matter, I don’t know what therapeutic products are. Maybe you can explain that one, too?
Ms. Sullivan: I don’t know what therapeutic products are. I assume that is something for the medical or medical device communities.
We have an issue that industry has raised for a long time. I haven’t heard Health Canada talk about this at all. We have a piece of legislation that covers food, drugs, therapeutic products, medical devices and natural health products. It is a piece of criminal law. It’s old. We need to move on from it. There is an absolute imperative in this country to do so.
I suppose you will hear from other witnesses that there is also a frustration. I don’t want to read about what are probably housekeeping changes. I want to have a conversation about how we put in place here in Canada a food act that is reflective of industry and reflective of the needs of other groups as well, not just ours. There is an important community of health advocates out there and we need to be listening to them. We need to start and put in place a piece of legislation that recognizes industry and, frankly, allows us to put in tools that perhaps can help us to deal with policy issues or regulate industry in far more constructive ways.
Mr. Burrows: I’ll give you a couple of examples about therapeutic and preventative. I’ll go to the treatment of animals for a moment. This is something that obviously we bring a lot of focus to today. Preventative treatment is something you would give the animal in advance of them demonstrating any root causes or challenges.
The therapeutic side is that they are sick and you have to treat them. That is one example of looking at what therapeutic would mean.
For humans, it’s very similar. What we are seeing — and why I totally agree that it would be appropriate for us to be trying to modernize and look forward — is a real interaction. Food is becoming bigger than just what you consume. It is part of your wellness and you are going to see that. You look at our customers; Loblaw bought Shoppers Drug Mart. Why? In order to be able to live on their mantra of “Live Life Well,” they realize there is a connection beyond traditional food with pharmacies — call it pharmaceuticals — with health care providers. They are going to mash that together as part of their future. That’s where I think the therapeutic piece all of a sudden becomes very relevant as we move forward, but it is not something we are dealing with today. We need to.
Senator C. Deacon: I will follow up on Senator Black’s question around innovation. Of your 1,500 members, how widely are IRAP and the SR&ED programs accessed? I come from that background where small companies are getting tens of thousands and hundreds of thousands in some cases, of dollars through those quite widely used programs.
Mr. Vielfaure: The SR&ED program has become less and less easy to get. The scrutiny that the agents come to challenge the company is now making the SR&ED program almost unattainable for smaller companies. For companies like Bonduelle, we still have our credit because I can have still have two full-time people to work on preparing the dossier when the auditors will come. We will be able to convince them and get our money. If you are a small company, you won’t win. You won’t get your money. It has become too complicated, challenged too much and it doesn’t work. If you are suggesting, doing $10,000 or $20,000 of research, it will cost $50,000 to get it approved.
Senator C. Deacon: What about the IRAP programs?
Mr. Vielfaure: I don’t know about that program.
Senator C. Deacon: Both relate to when companies have technical challenges to overcome. We are not on specifics around Bill C-97. I wanted to follow up because it is an important part.
Mr. Burrows: I would indicate that I think there is an opportunity to update those programs to ensure that they reflect the reality today with business. SR&ED is an example and it comes back to the definition of pure R&D. I’m not going to suggest that everything we do is a new idea. Because we are now so much more global, we are fast adopters of ideas that come in, but they are not necessarily original. However, they don’t qualify in the way —
Senator C. Deacon: There are specific tests for both programs. Technical uncertainty is the first test, and you can prove that or not. That’s an area where you can help us by being specific in the ways the programs might be improved because they are there for all Canadian corporations to access. This is an area where you do not need to convince me of its importance. I want to know what we can do differently to make sure this very important sector in Canada can access these programs successfully and use that to fuel innovation and get us out in front.
I leave that with you. Generalities will not help us. Being specific on why the programs are not working, where there are gaps, those sorts of things will be helpful.
Senator Mercer: Thank you for being here. I have two things. I’m going to give you a hint, and then I am going to ask you a question. On the discussion earlier about cannabis edibles, there is a market for people like me, a former tobacco smoker and an occasional pot smoker, many years ago. I’ve given up both, but I’m interested in getting back to being a pot user as I age and get aches and pains. That goes with aging.
I’m not interested, though, in taking my pot by smoking because my concern is if I smoke pot, the next thing I will do is pick up a cigarette. I was a three-pack-a-day guy, gave it up 30 years ago and I don’t want to do it again. There is a market there for you as you prepare for edibles. That’s a freebie from me. I hope you make a lot of money with it.
My real question was on employment. You talked earlier about the number of vacancies you have in the company. Have you taken the step of meeting with community colleges in the various areas where you operate to say, “Here is our need and here are the programs that would be helpful.”
I’ll give you one example of how it worked positively. When the Government of Canada decided a number of years ago that the shipbuilding program would go to Seaspan in Vancouver and the Halifax Shipyard. The day after the decision was made, the board of Nova Scotia Community College met. They said, “What do they need that we are not providing now?” One of things that was missing was that they had a program but it had dropped off in importance in education, was a welding program. You need a lot of welders to build ships but it had not been a large demand in the general industry.
I know you don’t need welders but you do need other things and if you talk to community colleges, they can respond quicker than anybody else. They are used to responding quickly to the needs of industry. Have you spoken to the community colleges across the country that could affect your markets?
Ms. Sullivan: Yes, we approach skills training from a couple of different angles. I can give you example. In Ontario there is a program called Taste Your Future, which has a number of components but part of it is an online social media platform that tries to reach out to youth to show that the industry can be a viable career choice. As part of that program, there is interaction with colleges and universities about education programs.
The other way we approach training is through the HR skills council. For our sector, it’s called Food Processing Skills Canada . They both offer a suite of online training programs that they develop and they also work with colleges in particular on different certification programs.
It is absolutely an area where we have to do more work. To the points made earlier, as the industry changes evolves and we adopt more automation, digitization, the skills are changing. If you look at last 10 years and the increased focus on food safety in our industry, you are looking at more food science jobs. We are looking at colleges and universities in terms of the training programs. We are going to have to continue to stay on the top of that as the industry and the job requirements evolve.
Mr. Burrows: I’ll come at this two ways: We have been approaching the colleges particularly, and some of the universities. Guelph is a great example, Conestoga, we are doing work with them because the beacon we can hold out to them is a connection to jobs. People are enrolling in the program and they are going to spend $10,000 a year for four years and they really want to come out with a job. That’s a wonderful win-win for the college or university and the student.
How we, as industry, are trying to connect is that we want to offer a co-op program or summer program of some sort. We will take in 25 students from that university and we are also helping them with the curriculum. It is an engineering program but it is customized for food engineering.
We are going to give them real life experience. We get three summers with them. They get to test drive us, and we get to test drive them. Hopefully what happens at the end is they move into a role in our company.
I concur that it is an opportunity. We need to do more of this to create that productivity, no question.
The Chair: I’d like to thank our panel. It has been interesting. As you can tell, the discussion could go on longer, but we have two other panels this evening. It is a busy evening.
For this panel from the Food & Consumer Products of Canada, Susan Abel, Vice-President Safety and Compliance, and Carla Ventin, Senior Vice-President, Government Relations.
From the Canadian National Millers Association, Gordon Harrison, President.
Thank you for accepting our invitation to be here this evening. We will start with Susan Abel.
Susan Abel, Vice-President Safety and Compliance, Food & Consumer Products of Canada: Thank you very much. Food and Consumer Products of Canada, FCPC, would like to thank the committee for the opportunity to provide feedback into the relevant sections of the Budget Implementation Act.
For those who may not be familiar with FCPC, for nearly 60 years our national industry association has been representing the companies that manufacture and distribute the majority of food, beverage and consumer goods available in Canada.
Food processing is the largest employer in the manufacturing sector in Canada, providing Canadians with high-quality jobs in over 6,000 manufacturing facilities. Canada’s food manufacturers employ more than the automotive and aerospace sectors combined. Over the past few years, there have been excellent examples of robust consultation, including the Canadian Food Inspection Agency’s development of the Safe Food for Canadians Regulations, and more recently Health Canada’s approach to reducing the red tape for introducing new, low-risk over-the-counter products.
These consultation models included early engagement with the appropriate stakeholders to allow the frank exchange of ideas. Unfortunately, the changes appearing in the Budget Implementation Act did not go through this kind of consultation process. Neither our association nor our members were consulted on the regulatory amendments identified before the committee today. This leaves us to speculate that these amendments were put forward in response to a number of backlogged issues that have been problematic for Health Canada as well as our industry.
Unfortunately, without the context that develops from successful consultation models, it is extremely difficult for us to provide support or register any concerns that we may have.
For example, the new authority for the minister to classify a thing as being a food, drug, cosmetics and/or a device may be here to help resolve the backlog of special authorizations that Health Canada has been issuing for over five years to allow natural health products that are eaten like food to be sold as food.
Many of these in-limbo products are innovative and contain ingredients not currently permitted in some foods in Canada because of our outdated recipe-like definitions under the Food and Drugs Regulations.
Until the food regulations change to permit the use of these ingredients in these special foods, Health Canada will be forced to continue the red tape exercise of issuing special authorization letters every year.
Perhaps this amendment is intended to fix this. If so, we are supportive. On the other hand, it may be related to changes Canada needs to make our legislation and regulations ready for the new access consumers will have to professional samples of natural health products and over-the-counter drugs under the new CUSMA. We simply do not know because we were not consulted.
Our members were also puzzled by the heading in the Budget Implementation Act, Inspection Modernization.
Food inspections in Canada are conducted by the Canadian Food Inspection Agency, and we have only just as of January 15 of this year seen new authorities for inspectors come into force. With some careful reading, it is our understanding that the intent of these changes is for drugs and medical devices, which are inspected under Health Canada’s oversight. What is surprising is how very different the authorizations are for Health Canada inspectors compared to CFIA’s. The changes in the budget would grant Health Canada’s inspectors significantly broader powers. It is concerning that we may end up having two such very different approaches to inspections under the Minister of Health’s responsibility. We do not understand the rationale and are concerned that this could cause confusion.
Our other concern deals with the definition of the word “sell.” FCPC and other stakeholders have been asking for the definition of the word “sell” to be amended by Health Canada because it is problematic for industry. Unfortunately the proposed amendment for the definition, which includes leases, falls short of addressing industry’s broader concerns with this definition. Because we were not consulted on this change, the proposal falls short of reducing a lot of red tape for industry. We see this as a lost opportunity.
Thank you for hearing some of the concerns that I’ve brought forward here. I would ask Carla Ventin, Senior Vice-President, Government Relations, for additional insights into the broader concerns we have regarding Health Canada’s consultative process.
Carla Ventin, Senior Vice-President, Government Relations, Food & Consumer Products of Canada: Thank you to the committee and to my colleague Susan for providing feedback on the Budget Implementation Act. We look forward to additional details and context from Health Canada.
My comments will address our broader concerns regarding the pace and process for implementing change by Health Canada. It’s been a hectic three and a half years for industry, and I imagine the same to be true for government. The pace of proposed changes to how our industry makes, labels, packages and sells our products is unprecedented. No other manufacturing sector in Canada has been asked to make so many critical changes to the entire life cycle of their products than the food manufacturing industry.
The cumulative impact of all of these changes will permanently alter the landscape of the food industry in Canada. What exactly these changes will look like and the impact they will have on the sector and Canadians is unknown. That is part of the problem.
While we appreciate the government’s ambitious agenda, it has been a challenge for industry to keep up. We see consultations that are rushed with short turnaround for comments or that have unpredictable timelines. For industry, this means it can be difficult to provide meaningful input. For government, this means that critical issues can be overlooked. For Canadians, this can result in unintended consequences.
We’ve also been explicitly excluded from consultations on some files, for example, with the Healthy Eating Strategy, Canada’s Food Guide, marketing to kids and front-of-pack labelling. Industry input was not welcome for various stages of these consultations. By doing so the government sent a message that industry’s input is not valuable or necessary.
We also see a lack of transparency in how industry input is considered and how decisions are made. For example, on marketing to kids, we are confused as to how our views are informing the policy dialogue. We’re also concerned with the lack of alignment and collaboration within Health Canada. We also see a lack of alignment between regulatory and economic departments across the federal government. Many departments are not required to consider the cumulative impact or promote economic growth along with the designated health, safety or environmental mandates. This results in disproportionate regulatory decisions that are not considering business competitiveness impacts.
We’d like to draw your attention to the report by the Chamber of Commerce and sponsored by FCPC and other groups called Cultivating Competitiveness: Turning Agri-food Regulatory Reform Promises into Action. There are important recommendations in this report, that we distributed to the committee in advance, that speak to our broader concerns and we encourage the government to take action to: one, conduct a comprehensive cost-benefit analysis on the cumulative impacts of newly proposed regulatory changes on the agri-food industry; two, make the Treasury Board’s targeted regulatory review of the agri-food sector a permanent, ongoing model for regulatory modernization; three, implement all of the recommendations of the Agri-food Economic Strategy Table report; and, four, pass legislation to make regulatory efficiency and economic growth a permanent part of regulators’ mandates.
In summary, we share the goals of Health Canada toward supporting the public health of Canadians, and we are committed to continuing to work in close collaboration with regulatory departments as well as departments responsible for growing the economy. It’s important we work together to achieve the twin objectives of the government in public health and economic growth. Thank you.
Gordon Harrison, President, Canadian National Millers Association: I also want to thank you for the opportunity to appear. I think this is a wonderful step, a prestudy of the provisions that we’re taking a look at. I think a lot of the discussion in this meeting will fit well into the context of your study on the competitiveness of value-added agriculture. In that context, I met with you on September 20, 2018. I and milling industry members said that the most important thing on our minds, the one thing that if you would like to accomplish something meaningful for this sector would be to amend section 4(1)(a) of the Food and Drugs Act.
We mentioned at the time we had proposed this amendment to the Minister of Finance in early 2018 to be included in the budget implementation legislation for 2018. I must emphasize, we’ve been asking for this amendment since 2011‑12. It’s a long-standing request. I think it’s important to note that we recommended the amendment of section 4 as an interim measure so that we could eventually do much broader things with the creation of a foods act.
In the Fall Economic Statement, Minister Morneau promised a regulatory modernization act. On November 30, I wrote again to say let’s have this amendment to section 4(1)(a) in the budget implementation legislation. The budget plan document spoke to the needs of both modernizing and aligning a regulatory framework with trading partners.
I draw to your attention that as in force today section 4(1)(a) is almost identical to the same section in the Food and Drugs Act of 1920, 99 years ago. It is identical to section 4(1)(a) of the Food and Drugs Act as enacted in 1954, some 65 years ago. Section 4(1)(a) is not aligned with the U.S. Food, Drug and Cosmetic Act, but it would be if we had the amendment that we have proposed for the last seven years.
This is a critical statement. I’m not as nasty as it sounds, but the absence of this requested amendment in the budget bill speaks volumes to the willingness of Health Canada to align the Food and Drugs Act with other things and to move it ahead in an enabling manner.
I want to touch on this notion of we haven’t seen this before; we weren’t consulted. It’s important to note that we don’t often get to look at legislation before it’s tabled in the House of Commons. The Honourable Gerry Ritz, at our request, took the unusual step of allowing some of us to view the first draft of the Safe Food for Canadians Act under a confidentiality agreement.
Subsequently, Susan Abel and other colleagues in the industry were able to work under a confidentiality agreement on the various iterations of the development of those regulations. Those regulations were actually pre-published in their entirety before Canada Gazette to enable comment, the same kind of ongoing work. In addition to that, the Safe Food for Canadians Act did not come into force until all that regulatory work was done. Now we’re looking at amendments to the Food and Drugs Act with no idea of what the regulatory amendments are to follow. This is a serious outage.
I would draw to your attention that the amendments in Bill C-97 propose to empower the Minister of Health to add and remove things from schedules to the Food and Drugs Act that don’t actually exist. They’re not in the Food and Drugs Act, nor does Bill C-97 create those schedules, but those schedules are contemplated and new powers are given to the minister. There’s no reference that makes sense in that part of it.
The proposed amendments in Bill C-97 contain other references to the Food and Drugs Act as in force today that I submit are incorrect. These amendments in many cases are so poorly designed and so obtuse that I describe them as a do-over. I submit they should be taken out of Bill C-97, lock, stock and barrel, and brought back when they’re properly thought through, when we understand what the regulatory evolution will be, the implications for industry, and brought back as a government bill for proper study in the manner that we all worked on at our request to develop the Safe Food for Canadians Act and regulations.
There’s a different way of doing this. I must emphasize that CFIA shared the podium on Tuesday of last week at a Health Canada meeting, and CFIA said, “We broke new ground in doing what we did.” That’s absolutely correct. Health Canada hosted that meeting.
We have many lessons learned, and we’re not applying them here. These provisions don’t belong in this bill. They should come out, and we should do it over again with the lessons learned. Thank you.
The Chair: Thank you.
Senator Doyle: Are most of the health food supplements on the market today currently regulated as to their safety and efficacy? Do you have any knowledge you can share with respect to health foods and what have you?
Ms. Abel: In Canada, nutritional supplements are regulated under the Natural Health Products Regulations. There is a review process that those products go through. They must have a natural health product registration number assigned before they can be sold in Canada. Health Canada goes through a review process for supplements under the Natural Health Products Regulations.
Mr. Harrison: I would add that this morning, I gave myself a tutorial on temporary marketing authorization letters under which many food-like NHPs or supplemented foods containing added vitamins and minerals have been able to come to market under temporary authorizations which are time or geographically limited. They’re enabled to allow companies to get real-world market experience to demonstrate to Health Canada the efficacy and safety of these supplemented foods.
We did not have a policy on supplemented foods for the last 25 years. We used to call it a fortification policy or the addition of vitamins and minerals to foods, which is contained in the Food and Drug Regulations, but we have accommodated in a very ad hoc and temporary way, which Health Canada would like to improve upon, many of the foods that are supplemented and are sort of are on that borderline between natural health products and foods. I hope that helps.
Senator Doyle: Has your industry done any research on, say, the fraction of the agri-food industry that might be impacted by these new definitions and processes that are outlined in the bill?
Mr. Harrison: All of them.
Ms. Abel: To Gordon’s point, our understanding is all industries would be impacted. When they refer to food natural health products, medical devices, cosmetics, that’s pretty much everything that a consumer might purchase. It will impact everything.
Mr. Harrison: We see the implications for food as potentially being very broad. We have no way of knowing how far they will go, but these are meant to deal with the very broad provisions of the Food and Drugs Act. If it affects any foods, it’s likely to affect all packaged foods for certain and some of the supply chains.
Senator Doyle: Thank you.
[Translation]
Senator Dagenais: My first questions will be for Ms. Abel.
I’m going to ask you a question that I have already asked the members of the previous panel. If you were not consulted about preparing the new provisions in the budget, do you have any idea who might have influenced the changes to Bill C-97? Someone must have influenced those choices.
[English]
Ms. Abel: Unfortunately, because we weren’t consulted, the first time we saw the language was when the bill was published. It’s very difficult for us to understand the context, whom these were really designed to support, and what the problems were that they were designed to fix.
I really can’t give you a good answer because we’ve had a very quick and early look at it, a recent look.
Mr. Harrison: I would speculate, if I may, that these provisions are a reflection of how difficult it is to regulate all consumer products, therapeutic products, NHPs under one act, and why we wanted to take foods away from that and treat them separately in tandem with the Safe Food for Canadians Act.
These are provisions the department has looked at as a means of modernizing and clarifying. Our difficulty is we’re not sure how.
I hope that helps.
[Translation]
Senator Dagenais: Let me turn to Ms. Abel again.
What is the “red tape” to which you have referred? Could you give us some examples of what will happen in terms of compliance? Could you also tell us what should be changed to improve development in your sector?
[English]
Ms. Abel: That’s a question we could probably spend most of the day talking about. I’ll try and give you a fairly simple answer.
Right now, we are potentially being faced, on the food side, with four separate full artwork label changes in order to accommodate a sequence of regulatory amendments for full labels. We had hoped to try and have these all happen all at once, but unfortunately, because of the pace of things that happen at Health Canada and the Canadian Food Inspection Agency, as well as some new ideas that were introduced at Health Canada — for example, front-of-pack labelling — it’s clear that we’re not going to be able to make artwork changes in one operation.
One of the interesting things that Carla talked about is that we often don’t speak to other departments and understand what they’re doing. For example, Health Canada is working very hard at a lot of label changes that would impact over-the-counter drugs, natural health products as well as foods.
In theory, over the next five years, if all of these changes happen, there are 200,000 artwork labels that will have to be changed. We’re very concerned, because there are not enough art houses in Canada to enable us to make these changes in that time frame.
We also have the new Safe Food for Canadians Regulations. I think the good news is because of the evolution of those regulations over six years, the food industry in Canada is in a pretty good position to take on, adopt and be compliant with those new requirements. No question, for some small operators — in particular, importers of food — there is a very big change in responsibility. For them the learning curve is going to be pretty steep. As a result, there are going to be some costs incurred in order to become compliant with those new regulations.
If we start looking at the cumulative impact, we’re looking at plastics. This is an important issue for the globe.
I’m talking big “I” innovative, not just those little innovations that make our life better and easier, but the big leap forward. We may be having some very big challenges to our industry as we try and evolve into packaging materials that might be a little more eco-friendly.
We have a big range of activities going on. We have so many things coming at us from so many directions that it’s very challenging.
Kathleen was spot on when she commented that 90 per cent of those 6,000 manufacturing facilities have fewer than 100 people working for them. They’re worrying about, “Where can I find a truck? How can I get five more bodies to come into my plant?” They really don’t have the energy to be looking at some of these additional things that are hitting them.
The cost of compliance is very challenging. It comes from many directions.
Ms. Ventin: The number of changes that the industry is confronted with right now, in Health Canada alone there are many different initiatives. That’s why the first recommendation the Chamber of Commerce report calls for is a comprehensive cost-benefit analysis of all of the proposed changes.
When the department asks us what the impact will be on this and we say it depends on how the policy works for all of these 20 or 30 other changes, we need to look at the big picture and talk about what the impact and cost will be and how that will affect the entire sector.
[Translation]
Senator Dagenais: My question is for Mr. Harrison. Mr. Harrison, I listened carefully to you and I see that the government went to any lengths to introduce regulations to allow the cannabis trade. For the rest, you have to go online. With all the progress you’ve been talking about, which seems to make sense for an industry the size of yours, do you have any idea who’s boycotting you? Are officials or politicians not listening to you? Do you have any idea? You seem to be saying that people don’t listen to you much. Ms. Ventin, if they don’t listen to you either, you can answer my question as well. Feel free to speak up.
[English]
Ms. Ventin: As I mentioned in my opening remarks, the last three-and-a-half years have been extremely challenging for industry to keep up. We have numerous consultations going on in very short time frames and it’s unpredictable. Sometimes we don’t see the roadmap where we’re going and I think that’s extremely challenging for us, industry and Health Canada to keep up.
When there are so many changes and we have such an ambitious agenda, it comes down to a capacity issue. When there is a lot on people’s plates, steps get missed and we take shortcuts. I think that is really what’s happening.
Mr. Harrison: This is important because we give you the sense that there’s a lot of opposition, and at times there has not been. In 2011 and 2012, when we recommended the creation of a foods act, Health Canada and Canadian Food Inspection Agency started to work on a single, consolidated bill.
I’m going to provide the 2012 roadmap to the committee clerk so it can be seen. Our recommendation was to have the food inspection act and the foods act that dealt with standards and integrity in that kind of thing. The two agencies worked for 75 to 90 days to make a single statute. For reasons that we never knew, that process was abandoned in pursuit of the Safe Food for Canadians Act and the foods act wasn’t pursued; foods continued to be under the Food and Drugs Act.
There was a willingness at the time, but I think there was a concern about the unwieldiness of dealing with all of the stakeholders about the elements of the Food and Drugs Act, natural health products and all of those things.
I don’t know about section 4(1)(a). I can tell you that as of Wednesday of last week, Deputy Minister Simon Kennedy promised me in an email that Health Canada would finally provide us with a written explanation for why that section 4(1)(a) amendment has not been pursued. That’s refreshing, but we’ve been asking for many years. There may be a legitimate reason. We’ve never been able to uncover it.
I know that I have some things in common with other people in the industry and people from Health Canada that you’re going to hear from shortly. We’ve talked about how nice it would be to amend the Food and Drugs Act partially, but to take a look at the regulations to see if that can be a surrogate for changing the act.
We’re at a point where we’re dealing with a huge amount, but I sense that there is genuine interest. Some of us have been doing this for a long time. We would like to accomplish these things in the next few years, and in the mandate of the next government. Thank you for your time.
[Translation]
Senator Dagenais: Could you send us, through our clerk, the document you are going to submit to Health Canada?
[English]
Mr. Harrison: It’s actually historical. It’s the regulatory way forward we did in 2012 and presented in support of Bill S-11, the Safe Food for Canadians Act. I’m going to provide that because it goes back to what industry thought would work, including section 4. We’ve accomplished a lot of that under the Safe Food for Canadians Act. We just took a different path to get there, as we have explained.
Ms. Abel: I am going to add one small comment in response to the question: Who doesn’t appear to be listening? I don’t think it’s so much they’re not listening. I think it comes down to resources.
One of the challenges is we have this laundry list of little amendments that are important to small, niche parts of our 6,000 manufacturing facilities, but they’re not big enough to catch the attention of, for example, the minister’s letters, where all of their activities are built around those letters. If it’s not in the letter, it tends to fall to the bottom of the pile and if you don’t have the resources to get to that pile, they just keep shuffling off.
One of the things I mentioned in my notes was the definition of the word “sell.” That’s kind of weird; how could that be a complex thing?
[Translation]
Senator Dagenais: Talk to him about cannabis if you want to get his attention. I’m just joking a little.
[English]
Ms. Abel: Thank you, chair.
Senator C. Deacon: Thanks for being here.
Mr. Harrison, I want to start with section 4(1)(a) of the Food and Drugs Act. For seven or eight budgets you’ve been pushing hard. You’re a compelling speaker. You’ve dealt with two governments and made no headway. I feel the frustration. I also feel the lost opportunity when we’re not having industry at the table as a partner helping to understand priorities and how to manage those priorities.
What are we doing wrong? I’m really asking this out of the context of Bill C-97 and thinking about our major study. What are we doing wrong in how we are moving forward that we’re not engaging in a collaborative manner? If we’re to take advantage of the opportunity that I think we feel is here in front of us to really grow agri-food industries in Canada in a substantive way, and to create a lot more opportunities across the country, we’ve got to break this nut somehow.
Through a couple of different governments and seven or eight budgets, you haven’t succeeded. Why? What are we going to do to disrupt this system, assuming this is a sensible change?
Mr. Harrison: Section 4 means that because there are naturally occurring contaminants in foods — and we touched on this in December — where there are no maximum limits specified, it’s an absolute prohibition. If there’s anything that’s a harmful substance that’s in a food, you’re not supposed to sell it. It’s an offence under that section of the act. It’s criminal law and even if Health Canada and CFIA decide, through an examination, that what’s in the food isn’t going to be worrisome, you’ve still committed the offence. You don’t get a letter saying you’re discharged.
In the United States of America, that would be untenable. Section 402 in the United States’ Food, Drug and Cosmetic Act says you can’t sell an adulterated food — they use that language — but a food is not adulterated if a substance present is at a level that ordinarily wouldn’t be harmful or injurious to health.
All we’ve asked for is to line our section with that section, because that gives the U.S. Food and Drug Administration discretion. Four years ago, I spoke nose-to-nose with the highest official in the U.S. Food and Drug Administration to say we’re advocating this in Canada. “Is there any reason why we shouldn’t? Is there any reason it would be problematic for you if we tried to align?” He said absolutely not. That was in a hallway discussion at a conference.
The problem with section 4 is that if we amend it the way we’re asking, Health Canada would be obligated to demonstrate that what’s in the food is harmful. In most cases they’re not interested in doing that. They’re using discretion that actually isn’t provided for in the law. You’ve still broken the law and that’s not fair because you can’t comply. That’s what it’s about.
All we’re asking is to make sure that you can comply and that the discretion, meaning a case-by-case risk assessment that Health Canada does at CFIA’s request, is enabled in law. Right now, that discretion isn’t enabled in law, it’s a gap. The problem is it obligates the government to acknowledge that the substance can be present and it isn’t harmful in a general way, which it does in the United States. It also obligates the vendor of the food, the food manufacturer or the importer to do the same to satisfy themselves that the food is safe and doesn’t contain a level that’s harmful.
It’s very balanced.
Senator C. Deacon: I’m assuming that. I’m more interested in why haven’t we made headway? Why have we gone through seven or eight budgets, two different governments and we have not made headway? How do we start to change that problem?
Mr. Harrison: The deputy minister promised on Wednesday of last week that we are finally going to get a written answer.
I wrote to the Deputy Minister before last week’s consultation meeting, the day after, and said we have not been given a written explanation in seven years. He responded the next morning saying, “We will give you a satisfactory explanation.” I look forward to that. Maybe we can share that.
Senator C. Deacon: Thank you.
Ms. Ventin and Ms. Abel, we have had a lot of great chances to learn in this committee in our value-added study, and we have learned how small changes in regulations can have massive impacts in terms of the labour costs and the efficiencies of the major capital investments required in the production and processing of food.
Is there no connection when regulations are made? It appears that there is no discussion about the cumulative effect. You are nodding. That’s amazing to me.
Are there discussions about the economic impacts? Because obviously business has to successfully apply a regulation in order for it to achieve its end. Are there discussions about that?
From your perception, is there a concern about the health of our industry? Because if we don’t have a healthy production and processing industry, we are importing food then from other countries that maybe isn’t living up to these standards. Are standards and regulations now purely aspirational because we are buying our stuff from elsewhere and putting our Canadian producers and processors out of business? Could you speak to that from your standpoint?
Ms. Ventin: Our regulators, looking at the big picture from the cumulative and economic impact — I would say the answer is no. We see in the Agri-Food Economic Strategy Tables report one of the recommendations is to have the regulators consider the economic impact and have that lens when introducing legislation. We saw that reiterated in the Chamber of Commerce report that I distributed to the committee in advance.
In theory, we have the Treasury Board saying this is a very good idea, that you can’t have departments or regulators working in silos within their department and not discussing it with Agriculture and Agri-Food Canada or Innovation, Science and Economic Development or Global Affairs Canada. What we see in actual practice is that these conversations are not happening.
I understand you are familiar with the marketing to kids piece of legislation. Has the impact been considered on international trade? Has the impact been considered on the entire value chain? Has the impact been considered on Canada’s brand? And one of the government’s priorities is the national food policy in which the Minister of Agriculture and Agri-Food has spoken about the importance of the Canada brand.
The Canada brand is important, but we have to develop that first in Canada and get Canadians to trust our food, which is one the safest in the world and the highest quality, before we can get the world to.
The issue is: Are regulators currently looking at that broader perspective and picture? I would say no. That is why we have those recommendations in the Economic Strategy Tables and Chamber of Commerce report.
Ms. Abel: We have had a very limited time for developing comments and in particular some of these cost-benefit analyses. There is definitely some cost-benefit analysis that gets done. However, we are typically not given enough time to do an effective job to be able to respond to Health Canada. Sometimes the information they are using is a bit speculative.
They try and reach out. We had one instance where we were asked in 30 days to give them a robust review of the cost of changing 80,000 labels. It’s pretty tough to do that, especially since we are not talking little tiny tweaks to a label. We are changing our packaging in order to accommodate these new label requirements.
There is some work done. It is not necessarily done across agencies, sometimes not even within departments. Often we don’t take enough time to do a good job.
Senator Wallin: Ms. Ventin, you raised an issue that I want to go to next. We are having this conversation about safe food for Canadians and a food strategy and growing the agri-food industry, yet we are talking about legislation. In this case, I want to raise the question of Bill S-228 that is causing potential problems — domestic legislation that could be leveraged against our own producers of food.
I know, Mr. Harrison, you raised in a letter to government last fall about the migration of jobs and all the uncertainty it creates. The jobs have been going south of the border over the last 10 years and it is costing us in terms of investment. How could that have happened? Is it the same problem you are seeing when it comes to issues like labelling or what is a healthy food or what is a harmful substance in a food? To declare bread unhealthy as opposed to its constituent parts is almost beyond me. I would like to hear from all of you.
Mr. Harrison: We raised it today because it is an example of a piece of legislation that came forward through a different process. It came forward without the accompanying information to industry or legislators — the House or Senate — as to how the implementation would occur and what the implications might be. That’s the important context for today.
What you said is all true. We still have those concerns. We are deeply concerned about the way that food is being depicted in order to attempt to achieve behavioural outcomes that can be achieved voluntarily. I mentioned in more recent correspondence that Health Canada set out to reduce sodium intake in Canada. It went from 3,300 milligrams a day to 2,760. We are 25 per cent below the United States of America and we are 40 per cent below Japan. It was all done voluntarily without a regulation to make it happen through a sodium task force that industry participated in, including my friend Paul Hetherington, who is not here today.
Bill S-228 is a very complicated matter. As you know, we recommended that it be dealt with through the Budget Implementation Bill and it has not. That is perhaps a lost opportunity. But the example is we don’t know how things will be implemented. That’s very true of these provisions that we see in Bill C-97.
Senator Wallin: If you could all comment on this. To me, to put a label on a food that is unhealthy and then try and sell it, either domestically or to export it, seems bizarre.
Mr. Harrison: That’s the word that I used.
Senator Wallin: It is to me as well.
Ms. Ventin: The process leading up to that has been very frustrating for industry. I’m speaking about our conversations with Health Canada, whether it’s the unpredictable or shifting timelines in regard to consultations on the marketing to kids piece or explicitly excluding industry from early consultations. Our first opportunity to provide input was not until the summer of 2017 when the rest of the public was provided the opportunity. We have expertise to provide and we need to work in partnership.
Going back to the earlier comments, the result of a flawed process also leads to those unintended consequences and the impact is what we are all concerned about. I do want to go back to public trust. We know the House Agriculture Committee has been studying public trust for quite some time now and it is important in how food is depicted.
In Canada, we have a great food regulatory system. We have high-quality food and great farmers, the top employer in manufacturing and good manufacturers. We have a lot to brag about. But you wouldn’t know it sometimes when you look at what we are doing.
We have members who are concerned about the international trade impacts and the impact on the whole value chain. It’s that flawed, rushed process. It is unpredictable — and having the word “unhealthy” depicting products but yet we want the world to believe we could be a global powerhouse in food production.
Canadians are going to continue to eat in Canada. Where we get our food from will matter. Are we going to import our food or making, growing, processing it here in this country? We would like to support farmers, increase manufacturing in this country and then export to the world and be proud of our brand.
Senator Wallin: Thank you. I will put the same question to Health Canada when we get there.
The Chair: I’m sure you will.
Senator R. Black: Ms. Ventin, you were kind. On December 6,Health Canada said they would consult with industry. Unless it happened in the last couple of weeks, I don’t think it has happened, correct?
Mr. Harrison: Not on Bill C-228.
Senator R. Black: I want to go back to labelling. I know this is broader than the question at hand, but will food products coming in from out of the country, south of the border or offshore, have to comply with those same labelling restrictions or conditions going forward? You talked about 200,000 food products having to be relabelled within the next five years. Will they also have to comply?
Ms. Abel: Under the new Safe Food for Canadians Regulations, in theory it becomes a level playing field. An importer will have to sign off when they get their licence that the products they are importing will meet the Safe Food for Canadians Regulations requirements, which includes labelling. In theory, the answer is yes.
How CFIA will be able to manage to enforce that will be a challenge because, of course, that’s pretty massive when you think of all the products out there in all the various formats. There is an awful lot of wonderful food coming in from other countries. It’s daunting and that is one of conversations we are having with CFIA.
Interestingly enough, they have just started up a brand new project on counterfeit food so clearly they are hearing our concerns and they are taking those seriously. But, yes, in theory, under the new regulations, when it is an importer brings a product into Canada, it is their responsibility to ensure that product meets regulations. If they are egregious in ignoring those requirements, there are consequences, including things like suspension or even loss of that licence and the ability to import.
Once again, how well that is enforceable, this is all new territory for everyone. I think that’s something that CFIA is also working closely on.
Mr. Harrison: I would say we are optimistic. We are not negative on that. We are optimistic because we have had such involvement and we had a meeting on Friday with CFIA. We told them how pleased we were about the way things were going and how optimistic we were. We have agreed with CFIA and they said, in public, last Tuesday: “We need to refine the statute. We need to refine the regulations.” We are ready to go and there is an advisory committee already in place to help with that. That’s well in hand; it’s going to be all right.
Senator R. Black: If in Canada it requires three boxes and two circles, will the same product coming in require the same or do I have to sign off and say yes it was there?
Ms. Abel: It will be the same rules.
The Chair: Mr. Harrison, you were very definitive in saying that most of the provisions in Bill C-97 are so poorly drafted they need a do-over and deserve to be removed from this particular bill at this particular time. Do you mean removing only the food from Bill C-97 or would you also delete the entire part, including drugs and cosmetics for instance?
Mr. Harrison: I view, for all the reasons we have stated, everything else that’s happening in the food regulatory sphere and long awaited enabling changes that we have asked for, including the foods act. We should look carefully and parse out those things that are meant to apply to food until we understand how they will be implemented and what the potential impact is on the regulation of the food sector, domestic and imported.
I would defer to our friends at Health Canada to explain the purpose of the other provisions that touch upon drugs, foods and so forth to see what they would argue should be saved, and it might be all of it. I have to say again that you cannot go from A to B and go through those provisions in Bill C-97 and understand what they are supposed to mean. They make reference to existing pieces in the Food and Drugs Act that doesn’t exist. They talk about a schedule G that was repealed. I have the Food and Drugs Act with me. They are not well done, and they talk about schedule A. You are going to look at those clauses. Schedule A is a schedule of diseases and health states and it deals with prohibitions against making claims in other matters.
The provisions of Bill C-97 talk about four different schedule A’s or sections of schedule A, and those don’t exist. There is no provision in Bill C-97 that says there shall be four sections of schedule A and something called schedule A.1. It’s that fundamental. You can’t look at the existing act and say, “We are going to change that.”
I would add that these provisions actually alter the definition of a food by virtue of their complexity; that’s not a good thing. It is so mind-boggling that I would have to go back and read it again, but they alter the definition of a food by virtue of these other provisions. I would argue anything that touches on the regulation of food should probably come out. And I would argue that the provisions in there that deal with penalties and enforcement as applicable to foods actually don’t recognize as well as they should the existing provisions for enforcement, penalties, incarceration and fines that are summary convictions under the Safe Food for Canadians regulations. We have the Agriculture and Agri-Food Administrative Monetary Penalties Act that now gives CFIA so much more discretion to give people a warning, then a second warning, then a fine and then take them to court on indictment. It is a whole series of steps. We don’t have that here. It needs to be brought into the Food and Drugs Act. It is being added to the Canada Labour Code and the Canada Occupational Health and Safety Regulations, so they can issue warnings and do things differently.
But under this law as we have today, it’s a summary conviction on some things, $50,000 and/or six months in jail. That’s pretty severe.
Anything to do with food, unless there is a compelling case to explain why it is there and how it will be implemented, that should come back at a later date. That’s wise. It is not being unduly pejorative to Health Canada. I know it sounds harsh and critical. I can’t help but be that way. This morning I did a clause-by-clause review of the provisions you are studying with the most knowledgeable person in food and drug regulations who I know in the country. We went through this in the space of 45 minutes and by the time we finished, he agreed that he couldn’t understand what these were for. When he first read this, when it was introduced, he thought he had an idea that it was about further implementation of Vanessa’s Law, whole life cycle approach to regulating and other matters. By the time we finished he said, “Yes, you are right. It is like tic-tac-toe. You go back and forth.” He said that you should not have to go here and there to understand when something is to be done.
We had this problem in the Safe Food for Canadians Regulations, draft one that we got to comment on, and we fixed a lot of that. This deserves process, but the food provisions need to come out unless they are demonstrated to be clear, simple, straightforward and enabling. How will they enable innovation? How will they enable getting rid of temporary marketing authorization letters? I will stop there, but it is a wonderful question and I thank you.
The Chair: Thank you for telling us exactly what you think.
Mr. Harrison: Put me down as undecided, as I like to say.
Senator Kutcher: I am finding that trying to wrap my head around all these things to be a vexatious challenge. I want to come back to Mr. Harrison’s letter talking about the contaminants, et cetera. I’m trying to understand that. I had to write it down because I got confused in my thinking, so please bear with me.
In the early sixteenth century, Paracelsus said that the dose makes the poison. It’s dose, not the contaminant we use.
Is the science there? Because you can have contaminants in foods. You can get biomagnification. As you go up the food chain, you can get contaminants. You can get persistent consumption of the same food with the same contaminant, and it can build up over time. You can get cross-additive contaminants from different foods, and you can get cumulative impact from different contaminants because of their effect on the liver and other organs.
I’ll ask Health Canada the same question: Is it the fact that there is — I’m not a food scientist. I don’t know anything about food science, but is it that the food science is not there to tell us? Is that why these things are ignored?
Mr. Harrison: Scientific evidence includes post-market experience and very detailed observational animal studies. CFIA has done excellent work over many years looking at contaminants in food to understand what we have in Canada and the levels and so forth. In turn, Health Canada looked at those and said, “We don’t see a problem. These are not the problem.”
The two major contaminants in grain-based foods are global. They’re not our problem; it’s the whole world’s problem. In North America, on the advice of the former Director General of Health Canada, he said at the food directorate there has never been, in recent memory, a documented case of an adverse health outcome associated for these two contaminants.
In one case, the contaminant is water soluble, metabolized and excreted from mammals and humans. Very unlikely that we would ever have a problem.
The science should be there for something like that. The shortcoming is occasionally because of climate and growing conditions, we have years in which they are unusually high. In those years, even countries like the European Union and France do what they call an excursion. We have to step outside of the usual law or regulation, and we will make an allowance this year so we can have a food supply.
There is lots of science around some contaminants. Others that are foods and not contaminants are allergenic foods, including wheat, mustard and soybean. Globally, not just in Canada, we have very little science that would say, “This is a threshold dose or an eliciting dose that would cause an allergic reaction.” Because of 4(1)(a), it’s very complicated, we treat allergenic foods like contaminants. It’s hard not to, but it is another complication.
I will add that in the feeds regulations, incorporated by reference, is section 4(1)(a). It puts prohibitions on the sale of feedstuffs that have the same outcome. That’s for another day, but it’s quite complicated. Agriculture and CFIA have spent years trying to overhaul those regulations. Great progress is about to be made. In some cases, the science is not there. In some cases, we know full well that there is not a health risk, and that’s what Health Canada has concluded about the two most prevalent contaminants in grain-based foods.
Senator Kutcher: This issue is all about a construct of safety as opposed to there is no claim being made for a therapeutic benefit. I see your point about maybe a different approach to foods because you are not making a therapeutic benefit for the food. It is an issue of safety, which is slightly different than drugs and natural products primary claim of therapeutic benefits.
Mr. Harrison: In Canada we started in 1996 to elaborate a policy for health claims for foods. We completed it in 2009. It was a pre-market evaluation framework for health claims for foods.
When we started in 1996, the U.S.A. had approved 11, Japan approved 42, and we had approved none. Today, if you look at the food and drug regulations, there are six model claims for foods, five for chewing gum. That is as far as we have gotten in all of these years. It has been so difficult. The marketplace has changed. The opportunity for health claims for foods that appeared to be there in the mid-1990s, like for natural food products, seems to have moved on. That’s an example of how we are not ready for innovation.
It is a very complicated subject. No, it’s not about health claims; it’s about ensuring we have safe food. The important thing is it has to be practically achievable in the real world. We have to know we can get there 90 per cent of the time in most crop years when you are dealing with agricultural products.
The Chair: We have had a great discussion. I thank the panel. It has been excellent to have you participate in our pre-study related to Bill C-97.
In panel 3, from Health Canada, we have David K. Lee, Chief Regulatory Officer, Health Products and Food Branch; and Greg Loyst, Director General, Policy and Regulatory Strategies Directorate.
Gentlemen, welcome. Great to have you here. I think Mr. Lee is the first presenter.
David K. Lee, Chief Regulatory Officer, Health Products and Food Branch, Health Canada: Thank you, Madam Chair.
I will try to clarify for you the provisions in Bill C-97. Because consultation has come up, these provisions are a result of consultations conducted through regulatory review. That took place on the biomedical side and the agriculture and aquafood sides. You will see that most of these provisions are aligned on the biomedical side, and I will try to move you through those. There were a few points that touched on food as well, so I will do my best to clarify.
The two key pieces that really go to modernization that touch on food are classification, as has already been mentioned, and clinical trials, but for a fairly narrow set of foods, like those you would get in a hospital or that are infant formulas.
In terms of the classification, it is the case right now that for each of the product definitions in the act — food, drug, device and cosmetics — certain products can become both and fall under more than one definition. If you think as someone who has to file a regulatory application with Health Canada, you’ve got to figure out which one you are. You do all this, work on your application and file it. It’s only when it’s in with the department that we decide, yes, you are a drug or device; or if you filed as a natural health product, we may say that you’re a food.
The problem right now is we say that it’s only to the person who applied. Nobody else sees that decision. It’s not transparent. We don’t describe why we’ve classified it that way. The proposal here is to make that a more formal exercise so that the uncertainty doesn’t sit with small businesses or large ones, and you can get out ahead of the classification decision. It would be done by an order, which is a regulation so it requires consultation. It’s a heads up: here’s the product line; what do you think in terms of the classification? Then it would be scheduled; there is a schedule, and it’s 8.1. The minister would schedule it as a food, drug or a device.
Following that, all it means is all the prohibitions and the provisions for that particular product line would apply, and not the others. You can be subject to multiple lines of regulatory overlap right now, and that’s pretty confusing. If you look at the Food and Drug Regulations, there’s a lot of volume.
That’s the intent of the classification provisions. This is to enable innovation, because in early development cycles you want to know what you are and know which regulations you need to comply with.
For clinical trials, again, the main proposal is really to take account of very important new ways to, largely, study drugs and devices. There are many advanced ways that are now limited in our current structure. That was really why the proposal went ahead.
We also noted, from the food side, that the current case in Canada is that for special dietary foods, if you’ve got a medical condition you’re treating, if it’s infant formula or you’re intubated in a hospital and it’s your sole source of nutrition, we want to make sure that works.
Right now it’s not enabled in Canada. You have to go to another country to do your studies and bring it here. That’s a real loss because we have great clinicians and research centres.
That’s the intent of including food in the trials. It’s just enabling. We will have to develop regulations to make this happen. It’s a new space and, of course, that will require a lot of consultation. That’s really the intent. It’s not a huge number of foods; it’s going to be for those foods that are medically targeted.
Those are the main provisions, but I would take the chance, given the conversation, to elaborate on advanced therapeutic products. Those are both drugs or devices — one or the other or a combination. We’ve been seeing in our consultations that we have incredible new therapies that have been developed.
For example, in a hospital I’ve seen a lab where they can print a tissue, embed it with live human cells, genetically manipulate it and put it in the patient.
Our current structure is not made to accommodate this. There are artificial intelligence applications for diagnostics. These are going to matter in important areas like cancer. We’re seeing a lot of support from cancer physicians working in hospitals on-site. Companies are coming up with new ways to fabricate.
That new pathway is to be able to fairly rapidly tailor the requirements you need. Our track record for making regulations for each product line can be very slow and these are now in clinics and hospitals.
That’s really meant to be on the health product side. It really wasn’t intended to intersect with food. Really, the intersections are classifications and the clinical trials.
With that, Madam Chair, I will turn to my colleague for the inspection pieces.
Greg Loyst, Director General, Policy and Regulatory Strategies Directorate, Health Canada: Thank you for the opportunity to provide a brief overview of clauses 170 and 171 of the BIA, which seek to amend the Food and Drugs Act and, in particular, the powers of inspectors.
[Translation]
The context in which we work is increasingly complex and technologies are evolving at an unprecedented rate. Our inspection powers have not kept pace with the changes. The proposed amendments would clarify some of the powers under the legislation. They would give inspectors modern powers to enforce the legislation, enabling them to adopt more flexible and adaptable approaches.
[English]
The objective of the proposed amendments is to give us a better capacity to protect the health and safety of Canadians. The powers that we are seeking are in keeping with those found in other modern federal statutes, including a number at Health Canada.
Perhaps I can highlight some of the authorities being sought, and then I would be happy to answer any questions that you might have with regard to other powers.
The proposed amendments would allow an inspector to order a person to provide an inspector with a document, information or sample specified by the inspector. This could be done whether the inspector is on site or not.
It would also add electronic data to the list of records or documents that can be examined. This is a modernization where that doesn’t currently exist. It would give us the ability to reproduce this electronic data or use a computer or telecommunications system in the place being inspected. Inspectors would be permitted to take photographs, make recordings or sketches during an inspection. The inspector would be able to enter a place remotely by means of telecommunication.
There’s a limitation of this power: it would have to be done with the knowledge of the owner and for a time that’s prescribed in that way. That would allow us to go in and witness the destruction of a product, for example, by video link rather than having to be present to do that to access a computer system, again, with the knowledge and permission of the owner.
They would be able to examine and take samples of anything in the place being inspected and remove anything from the place being inspected for the purposes of that inspection.
With these new powers, we would be able to order a person to move or stop a conveyance and give the inspector the authority to enter that conveyance for the purpose of an inspection.
It would also give the authority to an inspector to enter a pass-through private property. This, of course, would not apply to a dwelling house, so the sanctity of the home would remain. The only way we would enter those premises would be with consent or a warrant from the courts.
This gives you a sense of the powers being sought.
One other thing I would mention is that in clauses 173 to 175, you will see that the offence provisions of the act are being amended. Essentially, what we’ve done is where an obligation is created by these new authorities, we’ve fit them up within the existing infrastructure of the penalty schemes that apply. There’s been no change to the penalties; we just fit them within the existing infrastructure.
Thank you.
The Chair: Thank you.
Senator C. Deacon: Thank you, panellists. I’m a big believer in regulation and enforcement. If you don’t have good rules and you’re not enforcing your rules there are a lot of problems that start to unfold in our lives. I’m all in favour of modernizing enforcement.
I am concerned, though, at how we create the rules that we then enforce and the collaborative manner in which that’s done, because we will never have enough inspectors to go and find every problem.
We have to count on our businesses to do an excellent job.
I’d rather more time is spent on things coming into the country and more self-policing of what’s in the country. That’s my own personal belief, because I want to make sure we have a level playing field for our Canadian producers and processors.
What I heard at the beginning is you did consult, but we’ve just heard from two panels that it wasn’t obvious to them, would be the most generous way of putting it.
Talk about how you’re building your regulations and modernizing regulations. I heard a lot of good words. I heard “consultation,” “transparency,” “evidence-based.” There are a lot of good words. I want to know how you’re actually changing your process so that you’re getting out and working with those who will be enforced under these regulations to make sure that they’re effective and cost-efficient, that allow us to compete, that we don’t have a regulatory burden that puts our businesses out of business.
Please speak to how that had either been done and somebody’s missed it or is changing or will be done.
Mr. Lee: The regulatory review is a large exercise. My understanding of it is that there was a canvassing through round tables and other modes to reach out and say, “What in the industries are you seeing as irritants? What are some of the ideas that could be fixed?” It then came in through departments to analyze.
Most of these measures, as I mentioned, came in through the biomedical sector. We did some foresight exercises. We did some iterative discussions, especially on the trial side, and the advanced technologies went to hospitals and so on.
We recognize that more of those conversations need to take place, in terms of things like clinical trials for medical foods. That will need a lot of discussion, but again, with the people who conduct those trials, with the people who will produce those foods and pay for those trials, and if they’re going to do it here, what would it take for them to do it here?
Not to mislead you, we didn’t consult on the text of the bill until it was tabled. That was part of the division we’re in.
Senator C. Deacon: Do people have a sense of where you’re looking to make changes and what the problem is you’re trying to solve? Is there clarity around that in your process? It doesn’t sound like there is.
Mr. Lee: Classification came up quite a bit. The main frustration that was articulated, not necessarily the answer that we’re giving now, but what was articulated across a number of sectors was in the course of an inspection or when I’ve put all this money into a filing and I’ve given it to Health Canada, then all of a sudden there’s this discussion. I get a letter back. I didn’t predict that. I go on your website, and I can’t see any decisions. I can’t see where I fall.
It was expressed in that form, and I would say widely on the classification side.
Constraints were very specific on the clinical trial side. We heard from trialists that really had limitations getting drugs across the border, a lot of pediatric or children’s oncology trials. We heard a lot about that.
It was more about, in this consultation cycle, what was frustrating people, what were irritants. We saw these particular proposals as a way to address those.
The transparency word that I used is really the mechanism for classification. Instead of it being in the department and a few officials making a decision and rendering it to a company, this is an exercise that would cause the minister to be able to schedule something on A1 and would have to go out and say, “I’m going to schedule this and have a consultation.” It would all be subject to the Statutory Instruments Act, the good lawmaking precepts, and then it gets scheduled. But there’s a discussion around it industry-wide. That’s why we think the mechanism, if I can put it to you that way, is more transparent, because it lifts the conversation out, at least to industry and whoever wants to comment on the classification, which doesn’t happen now.
Senator C. Deacon: Thank you. I’ll let others carry on with that.
Senator Moodie: Mr. Lee, bear with me, because I’m building my question as I speak.
I have been approached by a number of very specific stakeholders whose interests are the safety of a particular subpopulation: children.
As I read some of the changes here, you talk about changes in the oversight of drugs, medical devices, advanced therapeutics. You’re talking about clinical trials and loosening up the flexibility and the oversight to allow, I’m assuming, for more rapid cycles. You also talked about safety and effectiveness.
Specifically, one of the examples I’ve come across in my reading is for foods for preterm infants, highly specialized foods for hospital-based infants.
Help me understand. What is it you’re trying to solve here? Are you trying to address the needs of this group of stakeholders I’m talking to who say we need definitive legislation, regulation, that provides a pathway for safe drugs and therapeutics for children, thinking about the off-label drug problem specifically? Help me here.
Mr. Lee: That is one area for certain where I have spent a lot of time in dialogue.
The idea of the clinical trial changes is really not to lessen safety at all.
Senator Moodie: No.
Mr. Lee: Safety of the subjects is going to be absolute.
There are new forms of studies. You can do what we call umbrella or platform studies.
The problem with children’s studies is enrolling them. There may be only 20 across the country. Now we can maybe enroll a whole cohort and be able to annex in drugs, devices, or foods, and see how the treatment goes.
Other countries are doing it. Right now there are limitations in our regulations.
It’s to help that very important study environment that clinicians need to do, and this is the first step. The next step would be rewriting the clinical trial regulations across the product lines, but inventing new ones for food, because right now that’s not enabled.
If you want to look at an infant formula, we have regulations for that if you want to sell one. If you want to say you met the requirements, the clinical studies that you have to do are not enabled here, and that’s really the issue. That problem we’re trying to tackle. If we have our good clinicians here in Canada who want to do a study to show that this particular product meets that requirement. For children in hospital we have to make sure that these foods are working, then it allows them to conduct a clinical trial.
Senator Moodie: We’ve also heard discussion about external products coming into the market. Can you help me understand? Is Health Canada accepting the research and available data from trusted external sources? Are they accepting that to approve products specific to children here in Canada?
Mr. Lee: Yes, we are. Many of the clinical trials that we get, both on drugs and, as I just mentioned, on things like hospital or infant foods, are from other countries. We trust them. We review them carefully scientifically. We have a lot of dialogue with our partners at the U.S. FDA, the European Medicines Agency and others to see if we can compare.
It’s a space that we think needs to be looked at, can we share more? Especially because off-label use by children is an issue, and it is something that we want to address.
Enabling on the food side is definitely a pediatric issue. If we can do it globally, that’s even better.
As we write these regulations, it’s important to make sure that we’re in sync with the best practices around the world.
Senator Moodie: I’ll be in touch.
Senator Wallin: Two questions. First, we just heard testimony from our previous panel who said there are references in this legislation to rules, regulations and schedules that don’t exist. You can imagine that that’s pretty troubling for all of us.
How would that happen?
Mr. Lee: In my view, respectfully, senator, it didn’t. To explain, the schedule A that was referred to has been there for quite a long time. It supports advertising rules that are currently in section 3.
It’s a list that you can’t advertise certain foods, drugs, medical devices if it’s a disease state.
That’s not the schedule we’re talking about. We made an A.1 because the provision comes before 3 in terms of the classification. We needed to call it something, and it was A.1. That will be a schedule for the classification. That’s created through here.
The other schedule is Schedule G. It was an empty schedule at this point and so we used it. G was available as a letter. That will support any listing that we make to the advanced therapeutic products because there’s a deliberative exercise where we have to look at whether this should belong in the advanced therapeutic. If it fits in the normal regulations, we wouldn’t schedule it there; if there’s provincial concern, we wouldn’t schedule it there because their laws already deal with it if it’s a surgery, for example. There’s a test to put it on the schedule, but the Schedule G is created through this instrument. Those are the only two schedules created here.
Senator Wallin: I want to come back to the example I raised earlier. To me, it’s very clear in Bill S-228. I know it’s not part of this, but it covers the same territory.
When you declare a food unhealthy, is there legal advice that you receive from either DOJ, outside sources or through consultation with the industry that walks you through the unintended consequences? For example, declaring a food unhealthy could well be a trade barrier which makes us vulnerable to retaliation. Declaring a food unhealthy, in law, might trigger something that’s called indirect expropriation. It means when the government adopts a measure that deprives somebody of the value of their product, they’re subject to being sued about it.
Did you get legal advice on that? We have seen the unintended consequences of these things most explicitly or at least most clearly, in my mind, in Bill S-228. Advertising to kids is an issue and we all kind of agree on that. Declaring bread unhealthy when we’re well in the global context for its component parts. I don’t know how you can get there and expect that 65,000 grain farmers will survive, that the bread and grain industry will survive. I don’t know the science to your point, Senator Kutcher, the scientific evaluation that this food is unhealthy, so unhealthy that we shouldn’t consume, sell and export it. We need some science. We need some evidence. We need some law on this.
Mr. Lee: I am here on Bill C-97. To clarify, since we departmentally clarified just on one point in terms of declarations, while the word “unhealthy” is in Bill S-228, the intention is not a vilify foods. There’s not an official declaration made about the food. It is that if it is unhealthy in the sense that it has a high level of an ingredient that will go to children’s health, then you shouldn’t advertise it to children under 13. That’s really the intent. But again, I’m here for Bill C-97.
Senator Wallin: It’s the unintended consequences of all of this that we have to look.
Mr. Lee: We can certainly take that back, senator, and —
Senator Wallin: Thank you.
Senator R. Black: I’d love to talk about Bill S-228 as well, but I won’t.
You pointed out, senator, about the unintended consequences. Has there been enough consultation, study and discussion around the changes in Bill C-97 with the agri-food industry and not just doctors and clinical trial specialists and things like that? Has there been enough consultation that there won’t be unintended consequences with these changes? I believe we heard in two previous panels that there’s been very little consultation. What’s Health Canada’s definition of “consultation” versus the rest of the world. Thank you.
Mr. Lee: It’s a fair question.
In terms of the clinical trials, I’ll start there. We see this as enabling. It sets up the discussion about what that trial framework would be. I doubt that we would hear, “Please don’t do clinical trials here in Canada for special foods for kids.” In principle we think that when we make those regulations it will take a lot of engaging, but then you’re in that exercise. This basically sets that up.
On the classification side, what we heard was that it was an irritant. The proposal, again, it is important to understand will it work? The simple mechanism that we see being proposed here is if it’s more than one thing — you do that assessment — could it fall under more than one definition? If it does, consult and decide which one. The consultation takes place on which one should it be, and then we schedule it.
Right now we have the force of being able to classify things. This doesn’t add to our powers. In fact, we do it all the time. There were episodes in the past when you were talking about the temporary market authorizations, where we took drinks that were high in caffeine that were under the Natural Health Product Regulations where you drank a dose of a can and we moved those over to foods. But we did it very administratively. People were bewildered about that. They didn’t consult.
What we’re putting forward is this at least moves the conversation out there about what should it be and then the minister can act. That’s the intention.
Senator R. Black: I’ll go to the highlights that Mr. Loyst provided. Has there been a review of these authorities sought around unintended consequences? Again, I think of our folks who spoke in the previous two panels. Have you done enough study and consultation, having inspectors coming in and taking photographs or whatever? I’m just asking.
Mr. Loyst: The powers that we’re seeking, as I mentioned, are in keeping with those found in other statutes. We’ve had some of these powers in the statutes at Health Canada for close to a decade in one case. You can find them in the Canada Consumer Product Safety Act, the Controlled Drugs and Substances Act, the Cannabis Act and some in the Assisted Human Reproduction Act. There are a variety of places where these have lived in real life for a number of years. We’re really harmonizing up to those powers.
I think it’s important to note the powers don’t create a significant administrative duty on the regulatee. What they’re doing is making sure that our inspectors have the ability to do things.
You mentioned taking photographs and why that might be important. The lack of an explicit power to take a photograph means that if an inspector uses a photograph as part of an investigation that we would want to pursue as a prosecution, it might be inadmissible in the court because we don’t have an express authority to do that, whereas in these other acts we do. We’ve had living experiment with these powers and they’re well regarded across industry.
The other thing that’s important is the coherence of the powers and why it’s important to have coherence across our acts and regulations. If you look at the traditional product lines, consumer products would be one thing and drugs another thing. Now we’re seeing a blending of these things. Electronic cigarettes is an example where it can be a drug, a consumer product or a tobacco product, depending on health claims and presence of nicotine and things of this nature. Another reason we want to bring these into place is to harmonize these powers — that we’re treating regulated entities similarly across the regulated fields that we work in.
Senator R. Black: If I can just add. We were out in mid-March on a tour with some of this group. We were in some places where the company wouldn’t allow us to take pictures of the machine that did something — folded a pastry or whatever — because they had the patent and the only product in Canada. They didn’t want it to be seen. You’ve just given yourselves a right to potentially take a picture of that product or that machine. How does that company deal with that? Forgive me if I’m not clear.
Mr. Loyst: There is confidential business information that’s collected during the process of an inspection, so whether we’re looking at records. If you have sales records, for example, where I source from, to whom I sell and things of this nature. There are protections that are afforded to companies around privacy and confidential business information. If there were proprietary interests with this particular machine you reference, then it would be treated the same as confidential business information that we might collect.
Senator R. Black: Thank you.
Senator Kutcher: There are parts of this which make intuitive sense to me, 165 and 166. What I don’t understand is this classification of a “thing.” I also don’t understand the process. If someone wants something classified as a “thing,” do they put the thing on the table and it gets classified as a “thing,” or do you have to go through a process? I’m confused.
Mr. Lee: We spent a lot of time in the drafting room on the word “thing.” The basic idea, the concept that’s holding is that if it’s more than one product, you have to describe it some way. It’s going to move into one of the product lines and finish the process as a drug or device. Before you place it there, we needed something that was more neutral. We were going to use “product,” but we thought that might have some limitations. We wanted to have something that was so broad that you could not worry about whether it is a “thing” first. You can get on with scheduling it. That’s the job the word “thing” is supposed to do. We all felt a little uncomfortable about the word, but when we analyzed it, it technically does what it’s supposed to.
[Translation]
Senator Dagenais: My thanks to our two guests.
I would like to talk to you about efficiency. We all know that products approved in the United States sometimes take months or years to reach the Canadian market. Then the producers tell us that they are waiting for Health Canada’s approval. Sometimes we give the impression of a country where the government seems unable to make business decisions. The government often blames officials. Do you recognize that the machine is so cumbersome that it can jeopardize the financial health of entrepreneurs? Also, do you recognize that there are more regulations than you are able to enforce?
[English]
Mr. Lee: My understanding of the regulatory review — and it’s an exercise that for us when we received it was to make sure that we understood some of the impediments in the various sectors to bringing products in and being competitive. As a safety department, that is something that is core for us, but we also wanted to look fairly at the impediments.
We spend time talking to the EMA and the Food and Drug Administration in the United States. We are on a lot of international working groups. We want to be able to spot those areas that could be changed well within the mandates of the act still doing what it does. There could be a change to make that environment better. We have had even recently stakeholder days that really start to look at how we identify which of the regulations are in the way but could be changed, what are the new ways to put in regulations.
This will be an upcoming exercise. My understanding is that it would be an annual discussion. It’s something that we’re paying attention to and trying to do as much work as we can. This is a legislative and a fairly narrow legislative offering, but there is a lot of work on going on the regulation side.
Mr. Loyst: To complement my colleague, one of the challenges we have is pacing. Technological evolution. The fact that our products are coming to market at a speeds never seen before. We have complex global supply chains. I talked about the traditional product lines we used to observe where you had a made-in-Canada product where you knew who the manufacturers were, where their plant was, whom they sold it to and where consumers would buy it. Now we have products coming from all over, with constituent elements coming from all over. There are challenges with the pacing.
When you look to the example of the advanced therapeutic products, this is an acknowledgement that we have to have approaches that are non-traditional in some cases as a means of facilitation. As David rightly points out, as a department whose mandate is around health and safety, that has to be a priority when you are doing this. It is important for us to ensure we are finding a balance where we are protecting the health and safety of Canadians but allowing for innovation and for those products to come to market. It’s very much a live issue when we’re looking at regulations in terms of how we sort that balance out.
[Translation]
Senator Dagenais: What do you mean by “non-traditional approaches”?
[English]
Mr. Lee: Perhaps I can explain. It’s housed, really, in the advanced therapeutic products piece. It acknowledges that there are some therapies that are so advanced — and this is everywhere in the world. They are trying to figure out how to regulate artificial intelligence applications for diagnostics. Even in the food industry we are going to see some changes that are technologically driven.
Making a regulation each time is the traditional mode of doing that. You really articulate a regulatory code and that can take some time. I have seen in my work there it can take sometimes 10 years to get out where the technology may already be well absorbed in other countries. The advanced therapeutic product pathway would allow us to articulate the licensing in a much more rapid way through consultation requirements for this kind of product. It’s something that represents a newer approach but one that fits for purpose. It is meant to rapidly tailor requirements. That’s what I believe my colleague was referring to.
The Chair: I would like to thank our panel. Lots of questions. It has been a full evening. You are the third in a line of three panels. Plus we had to leave at one point for a vote. It has been a full evening. I thank all the senators, and I thank the panel for their presentations.
(The committee adjourned.)