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Regulatory Change to Ease Consumer Confusion

by 5m Editor
10 May 2008, at 5:32am

CANADA - Canadian farmers are counting on recommendations from the House of Commons Standing Committee on Agriculture and Agri-Food to result in changes to Canada’s food labelling regulations that will make it easier for consumers to identify and purchase foods grown in Canada.

Committee Concludes Public Hearings

The standing committee completed an exhaustive series of public hearings Thursday (May 8) which examined the labelling of food products in Canada and will now prepare a report and provide recommendations for improvement to the federal government.

Agriculture Committee chairman James Bezan acknowledges this has been an issue that has been around for awhile. “Essentially we’re looking at regulations and rules that were brought into play over 30 years ago and haven’t been touched since”

“He recalls, “When the Standing Committee on Agriculture and Agri-Food did its cross Canada hearings last year and the year before on the agriculture policy framework, producers kept telling us over and over again that they believe that the “Product of Canada” labelling is misleading and needs to be updated.”

Input Gathered from Full Spectrum of Stakeholders

Committee members heard from farm groups, consumer organizations, manufacturers, food processors, agricultural retailers, grocery distributors and regulators. The primary concern relates to uncertainty on the part of consumers over what the Product of Canada designation actually means.

“Currently all that really means is that at least 51 percent of the total retail value of the product was added here in Canada,” explains Ian Wishart the president of Keystone Agricultural Producers (KAP). “It could be product that was grown in Canada or it could simply be the processing process or the repackaging process that adds that value. So it does provide the opportunity for products that are grown in other locations around the world to come into Canada, be processed and packaged here and appear on our consumer shelves with a Product of Canada label on it even though they weren’t actually produced here in Canada.”

Recent media reports have drawn increased attention to the matter.

“I think these days consumers really want to know what it is they’re eating and that’s why it has become a very current issue,” says Wishart.

Grading Procedures Add Additional Confusion

The grading of imported ingredients adds an additional level of uncertainty.

“Our labelling system allows for things like “Canada Number One,” says Wishart. Even though a product may have originated in another country if it was processed and packaged in a Canadian facility, and therefore graded here, it will say Canada Number One.”

“It certainly makes it very tough for them to know where this product came from or where it was processed,” he says.

Labelling Structure Disadvantages Canadian Producers

Glen Blakley the president of the Agricultural Producers Association of Saskatchewan (APAS) complains, “We have to follow certain guidelines and yet, when you see products sold in our stores and our consumers are buying goods that say they’re a product of Canada, there might very well be very little or no product inside that was actually grown in Canada. It’s misleading to the consumer and it’s definitely a disadvantage for our Canadian producers.”

As an example, he points to apple concentrate from China. “When they add the water and cardboard carton in Canada, the processing costs amount to significantly more than 51 percent of the product’s value. This makes it a Product of Canada when actually all the apple juice concentrate came from China.”

The confusion surrounding the Product of Canada designation varies from commodity to commodity and country to country.

Wishart notes products that originate in third world countries, where labour is cheap, have very little value and the Canadian add on is often the highest portion. “The more heavily processed a product is the more likely it is to qualify as a product of Canada here in our labelling system,” he adds.

Two Options Under Consideration

Two main options have been suggested for addressing the situation. One would be to simply increase the percentage of value that would have to be added in Canada for a product to qualify as a Product of Canada. Another would be to introduce a dual type label which would distinguish between “Grown in Canada” and “Manufactured in Canada.”

Wishart favours the dual label. “Certainly there would be more clarity in the supermarket,” he says. “That would make it really clear to them that this was a product from Canada that was processed in Canada as compared, for instance, to a product that was just processed in Canada and in fact may have originated anywhere in the world.”

Blakley agrees, “What we need is a label that reflects that the content is actually grown in Canada or where ever it happens to be grown. It should be labelled as such so then our producers will be competing on a level playing field in the market place.”

He points out, “Some of the concern, from a producer’s perspective, is that our costs are significantly higher because of the regulations that we follow in regards to safe food and producers in those countries definitely don’t have to meet those stringent regulations and added costs.”

Buy Local Movement Gains Momentum

Blakley is convinced Canadian consumers are prepared to support Canadian products if they are able to identify them.

“Ontario and Quebec actually have Made in Ontario, [and] Made in Quebec labels that they’re working on. I think there is an appetite amongst the consumers now and awareness that was not there before that they need to be looking at what’s coming into the stores and what they’re buying.”

Committee Prepares Deliberations

Having just concluded their hearings, committee members will now consult amongst themselves and come to some sort of consensus on a final recommendation.

“We have a lot of things that we have to think about as we move forward on the issue,” says Bezan. “We don’t want to penalize manufacturers who are bringing in offshore product or U.S. product and making it into a Canadian good. They’re creating jobs and functioning within the regulatory framework that we have here in Canada which provides a very safe food product, the safest in the world in my opinion, so we don’t want to penalize them from not being able to use the name Canada. We’re hoping to have a report finalized and presented in the house in June and hopefully provide some direction to government.”

Labelling Investigation Viewed as Valuable

Bezan considers the study to have been worthwhile and one that has generated a great deal of interest from across all segments of Canadian society. “I believe that, at the end of the day, we’re going to see changes that will enhance our competitive position as producers in the Canadian market and provide better information to consumers.”

5m Editor