Tokenistic import offices, greater liabilities for retailers, higher costs or less items in stock; these are some of the possible outcomes of one proposed regulatory change from the Safe Food for Canadians Act (SFCA), but other sections may streamline dispute resolutions and traceability. Canadian Produce Marketing Association (CPMA) vice president for policy and issue management, Jane Proctor, says authorities are moving rapidly toward implementing the act in law by 2015. Importers and exporters will need to take heed to avoid getting caught out.

While the Food Safety Modernization Act (FSMA) of its neighbor to the south attracts much more attention in the produce industry, Canada has its own changes in the pipeline through the SFCA.

"It's not anywhere near as slow as FSMA has been. It won’t surprise me if the regulation is in place before FSMA ever has its regulations in place," Proctor says.

"It's a very aggressive timeline here and the last thing exporters should do is reach January, 2015, and realize that there are changes they should have built into their business processes that they hadn’t been aware of.

"But a lot of what we are going to see is going to be similar to what's come out of FSMA and regulations in other countries that have gone through similar regulatory modernization."

There are several key sticking points however. The CPMA and other industry players will be fighting to address these issues with the Canadian Food Inspection Agency (CFIA) before it finishes public consultations on Nov. 30.

The biggest issue, not just for the produce industry but across all foods, is arguably the CFIA's plans to remove the non-resident import allowances that exist in the current framework. The move is designed to give Canada greater legislative authority as the government cannot prosecute outside the country if a non-resident breaks the rules.

But the proposal could have impacts in the "millions of dollars", according to Proctor.

"For us and for many other industries this has the potential to have a tremendous impact," she says.

"Many companies that export to Canada act as non-resident importers, so if the change were to occur, what it would mean is if they wanted to maintain their role as an importer they would need to have a physical presence in Canada through an office with at least one staff member."

She says this could give rise to a range of potential scenarios. Retailers or food service operators could take on the burden of liability and filling out customs documentation, or there could be a string of cottage industries with "no real business value", existing purely for the sake of compliance.

"What we know is that there is a reluctance for retail and food service to take on any more of the direct importing that they already do.

"The alternative if they don’t do that is if there’s no other recourse, maybe the retailers and food service operators would delist the product and not import it anymore, or they may say, 'we’ll do that but maybe this is going to add some costs to the food supply'.

"We’re obviously going to fight for it not to be removed, but if it is it's going to be a fundamental difference for anybody exporting to Canada that currently operates as a non-resident importer."

Dispute resolution and traceability

Other proposals by the CFIA as part of the SFCA include a clearer licensing system to resolve conflicts, new rules around traceability and an outcome-based approach to regulation.

"The new regulations proposed will mean that everybody who engages as inter-provincial trade or importing into the country will have to be a member of the Fruit & Vegetable Dispute Resolution Corporation (DRC)," Proctor says.

"We’re very supportive of that because currently there’s sort of a dual membership licensing requirement in terms of produce – one for CFIA and one for DRC. The bulk of the industry, something like 90% is in the DRC.

"We believe, and it's generally accepted in the industry, that because it's easier to maintain a license with CFIA in the current way they license, any bad actors - people who may not be that scrupulous in terms of their business - can maintain a license and are therefore free to do business in Canada because their business is not revoked."

She said changing the licensing system would bring strength to the industry.

"There's much more that we see as being very positive. For example, in these regulations the focus is also towards an outcome-based approach to regulation.

"We’re very supportive of that because we believe it’s something that’s going to bring a lot of capacity for ease and change to meet market demand and innovation.

"It's not about changing the requirements, but saying, 'we’re not going to embed all the preciseness of how you do that in the regulations. Instead we’re going to say, this is what we want you to do, you look at how to achieve that as an industry'-"

In terms of preciseness, Proctor is critical of proposals to require traceability record keeping for three years, which goes further than established industry rules in Canada and elsewhere.

"For example, if you look at food safety protocols, especially the ones here in Canada, it's typically a two-year period. If you look at food law in the EU, the requirement there is I believe five years but for perishable product like produce it is a six month period.

"So we’re challenging that, saying why would we in Canada have requirements that go beyond the record keeping requirements of any other food safety requirements of industry and other legislations?

"That’s the kind of thing where the old adage of the devil being in the detail applies and is an example of the kind of thing we’re going to be certainly working with them on."

The CPMA will be campaigning to change this detail, and pre-emptively trying to prevent any political manoeuvres of the kind that led to the Tester Amendment in the U.S. FSMA, allowing for exclusions of small organizations from the regulations.

"We’re going to fight really hard so we don’t see the same unfortunate results that happened in the U.S.

"When we speak to elected officials, one thing we’re going to be saying is with this Safe Food for Canadians Act and the regulations, these must apply to all.

"In other words there cannot be exclusions based on the size of organizations, because for political reasons it is very attractive to politicians to exclude the small business."

Waste management concerns

While not a part of the SFCA, changes in the types of packaging materials allowed for landfill across different parts of Canada also have the potential to impact produce exporters.

"As with many countries around the world the issue of sustainability is top of mind to many, and that in turn includes regulatory requirements," Proctor says.

"Two areas where the government is focusing on at a provincial level and even at a municipal level is around the secure food approach, and other pieces around stewardship of the environment - a big focus of that is around the notion of waste that goes into landfills."

As an example, she says Quebec plans to ban putting styrofoam in landfill, and other provincial governments are following suit with different products.

"What that means of course, in an industry that ships such a volume of produce moving every day with packaging that's discarded, is that we need to watch keenly now and be engaged with the Retail Council of Canada, looking at what is happening at the provincial level of what regulations are coming into place.

"If someone says you can’t put that [styrofoam] into landfill, that becomes an enormous issue, because if you’re just receiving a product in Styrofoam and that’s the best material for shipment of that commodity, what are you going to do now?

"We're hoping there's more of a Federal approach to this, and what we mean is – in a good way – that they can harmonize regulations across provinces so that you don’t have a disparate situation where if I'm shipping to this province I can't use this, but if I'm shipping to that province I can, and all of these one-off approaches that just drive businesses crazy."

Photo: Flickr Creative Commons, Ian Muttoo

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