Vol. 147, No. 10 — May 8, 2013

Registration

SOR/2013-75 April 26, 2013

MEAT INSPECTION ACT

Regulations Amending the Meat Inspection Regulations, 1990

P.C. 2013-421 April 25, 2013

His Excellency the Governor General in Council, on the recommendation of the Minister of Agriculture and Agri-Food, pursuant to section 20 (see footnote a) of the Meat Inspection Act (see footnote b), makes the annexed Regulations Amending the Meat Inspection Regulations, 1990.

REGULATIONS AMENDING THE MEAT INSPECTION REGULATIONS, 1990

AMENDMENTS

1. The portion of section 2.1 of the Meat Inspection Regulations, 1990 (see footnote 1) before paragraph (a) is replaced by the following:

2.1 A person who is required or authorized to submit a document under the Act or Regulations shall submit it in writing by one of the following ways:

2. Subsections 54(4) and (5) of the Regulations are replaced by the following:

(4) No substance or treatment shall be used to denature a meat product unless the substance or treatment does not pose a risk to the health of

• (a) an animal that consumes the meat product;
• (b) an animal or a person that consumes or is exposed to a product derived from the meat product; or
• (c) a person who is exposed to the meat product.

3. Section 110 of the Regulations is repealed.

COMING INTO FORCE

4. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Background

Pre-market approval, mandatory registration of labels and recipes requirements (applies to the MIR and the PPR)

Pre-market label review and registration is currently required for domestic and imported meat products regulated under the MIR and domestic processed fruit and vegetable products regulated under the PPR. The MIR also require the review and registration of meat product recipes.

Currently, CFIA processes approximately 13 785 pre-market label submissions for meat products and processed products annually. This includes reviewing labels and formulations, prior to market entry against current standards. Compliant products are provided a registration number for both domestic and imported products. Under this amendment, recognizing that it is the industry that is responsible for ensuring that their labels are compliant, CFIA would shift from direct pre-market label reviews to providing expert labelling information and responding to specific questions regarding labelling requirements.

This initiative will not affect food safety. The rules for labelling are not changing. There are also no changes to labelling regulations related to food safety and consumer protection. CFIA will continue to enforce all labelling requirements including allergens, nutrition and compositional standards.

Repeal of requirements to use registered construction and packaging materials and chemicals (applies to the FIR)

The FIR prescribe construction and packaging materials and non-food chemical products used in the construction and operation of establishments or in their equipment by referencing the Reference Listing of Accepted Construction Materials, Packaging Materials and Non-Food Chemical Products, published on February 1, 1998, by the Agency, as amended from time to time. These requirements are prescriptive and might not have been suitable for all industry, thus creating a regulatory burden for small business.

The Reference Listing is a current list of materials and non-food chemicals which have been found by CFIA to be acceptable for use in establishments operating under its authority. The primary purpose of this publication is to provide a ready reference for both inspection personnel and representatives of the managerial staff of establishments, to indicate acceptance status for products intended for use in establishments. The Reference Listing is amended from time to time to remain current. The removal of this Reference Listing will not have a significant impact to industry. Pursuant to the Regulations, industry will still be responsible for using acceptable food contact materials that meet food safety requirements.

Repeal of requirements to use registered chemical agents and cleaning compounds (applies to the ER)

The ER require that facilities have a sanitation plan and that the eggs produced are safe and wholesome, but then offer further specifications regarding the chemical agents for cleaning the egg station and the cleaning compounds for washing eggs. Operators of egg stations must either use products that are included on the Reference Listing of Accepted Construction Materials, Packaging Materials and Non-Food Chemical Products (Reference Listing) or use chemical cleaning agents and shell cleaning compounds that the operator has demonstrated to be equally safe and effective.

The Reference Listing is amended from time to time to remain current. The removal of this Reference Listing will not have a significant impact to industry. Pursuant to the Regulations, industry will still be responsible for using acceptable food contact materials that meet food safety requirements.

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II (applies to the Plant Protection Regulations)

Native to Asia, the emerald ash borer (EAB) is a highly destructive insect that kills ash trees. Since being detected in North America in 2002, this insect has killed millions of ash trees and continues to spread into new areas, causing considerable economic and ecological impacts. EAB is currently found in the provinces of Ontario and Quebec.

Efforts to control the spread of EAB within Canada are currently managed by the Emerald Ash Borer Infested Places Order made by the Minister of Agriculture and Agri-Food under the Plant Protection Act. The Ministerial Order defines areas of EAB infestation and restricts the movement of ash trees, nursery stock, logs, lumber, wood packaging or dunnage, wood or bark, wood chips or bark chips, as well as firewood of all species (regulated articles) outside an area of infestation.

Ash trees are a major component of forests and urban landscapes in both Canada and the United States, and are commonly found ranging from the Atlantic Provinces through to Western Canada, where they are one of a few tree genera suitable for urban planting. Ash trees aid in maintaining the health of the environment by providing habitat to numerous animals and birds. They are also integral to air quality and the ecological health of soil and watersheds. The loss of ash trees would reduce or eliminate sources of food and shelter for wildlife, decrease biodiversity, diminish the health of Canadian forests, and impact urban landscapes. In addition, blue ash and pumpkin ash are two species already considered rare or vulnerable in their native range of southwest Ontario; these may be extirpated due to EAB. (see footnote 2)

The CFIA initially attempted eradication efforts for EAB; however, these efforts are no longer considered feasible given the rate of spread of this pest. There is growing scientific evidence in Canada and the U.S. that EAB cannot be eradicated and the CFIA has shifted its focus from eradication to management to slow the spread. EAB is now considered an established pest in the current regulated areas. The CFIA adopted a complementary “slow-the-spread” management strategy in 2006.

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products (applies to the FR)

CFIA carries out pre-sale product evaluation and registration of some fertilizers and most supplements imported into or sold in Canada. Product applications are reviewed to ensure that products are safe, effective and in compliance with labelling and other standards. This includes bystander and worker exposure, safety of food crops grown on land that has been treated with the product, impacts on animals and plants other than the target crop species, and ecosystem effects including impact on soil, biodiversity, leaching to waterways, etc.

Efficacy assessments of fertilizer and supplement products can range from simple calculations, ensuring that the product delivers a sufficient amount of nutrients to satisfy plant needs, to highly complex statistical analysis of performance data generated from field or greenhouse trials. In all instances, the efficacy claims that appear on a product label must be supported by scientifically valid information and the product benefits must be substantiated in a clear and definite manner. A variety of factors are considered by CFIA evaluators when evaluating product performance including product application rates, nutritional requirements of the target crop, usage pattern, frequency of application, current agricultural practices, appropriate statistical methods, research trial designs, and Canadian climate and soil conditions.

On average, 730 submissions are received annually by CFIA of which approximately 300 are for re-registration and approximately 100 are for new registration. Other submissions that require product evaluation are amendments to registered products; industry, public and CFIA inquiries, or complaints; research authorization for conducting field trials; and submissions for companies requesting the evaluation of products that do not require registration. Over the past few years, the fertilizer industry in Canada has expressed concerns regarding the rate at which CFIA is able to process submissions.

The GoC has, through its 2012 budget plan and announcements, refocused on protecting the health and safety of Canadians. Accordingly, transitioning the CFIA out of activities related to efficacy and quality of fertilizer and supplement products over the coming year allows the CFIA to focus its efforts on the safety of these products.

The CFIA will continue to verify the safety of regulated fertilizer and supplement products for humans, plants, animals, and the environment. Fertilizers and supplement products must continue to be properly labelled to avoid product misrepresentation in the marketplace and to protect consumers.

Issue

Through Budget 2012, the GoC committed to changing how CFIA monitors and enforces regulatory requirements. In particular, the GoC committed to repealing regulations related to pre-market approvals and mandatory registration of labels and recipes.

Repealing the pre-market registration requirement for labels from the MIR and PPR should allow producers to more quickly change formulations while remaining responsible for maintaining compliance with all food safety and labelling requirements.

Repealing requirements to use registered chemical agents and cleaning compounds under the ER, removing the prescriptive provisions concerning construction and packaging materials and non-food chemical products in the FIR, and shifting activities away from the regulation of quality and efficacy of fertilizer products have all been identified as part of CFIA’s response to GoC commitments to streamline services and find economies.

In addition, the GoC’s shift toward outcome and performance based regulations assists industry by allowing them to use some products suitable for their operations without prescribing them in regulation. Removal of the prescriptive provisions concerning construction and packaging materials and non-food chemical products in the FIR will allow industry to use the most up-to-date and cost-effective products for their business.

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II

EAB continues to spread in Canada. Under the previous control regime, periodic renewal of the Ministerial Order was required to declare new areas of EAB infestation and to implement new restrictions to control its spread. As further spread of EAB is anticipated, a more permanent regulatory tool was required to allow for the ability to respond to new EAB finds in a prompt and efficient manner and to manage and control the spread of EAB. This regulatory amendment added EAB to Schedule II of the Plant Protection Regulations as an enumerated pest. This eliminates the need to periodically update and renew the Ministerial Order and it has been repealed accordingly.

Objectives

The objective of these regulatory amendments is to assist in honouring the commitment of

• — the GoC to remove unnecessary barriers for the importation of new products from international markets;
• — CFIA to participate in broader GoC initiatives such as Red Tape Reduction Commission and the U.S.-Canada Regulatory Cooperation Council (RCC) exercises, both seeking to ease the burden on smaller businesses and facilitate trade; and
• — CFIA to develop regulatory frameworks that provide small business the necessary flexibility in developing approaches suited to their business size.

The change in pre-market labelling would provide for increased consistency for all food products sold in Canada. Currently, only meat and processed fruit and vegetable products require mandatory pre-market label registration. This amendment will mean that no labels for food products regulated by the CFIA would be subject to pre-market registration requirements.

The amendments to the PPR and MIR will also reduce regulatory burden by eliminating mandatory label review and registration of meat and processed products, as well as the requirement for meat recipe review and registration. Companies will no longer be required to submit labels and, in the case of meat products, recipes for review and registration before being able to market their products. This change will not affect requirements for health and safety information currently required on labels.

Description

Pre-market approval, mandatory registration of labels and recipes requirements

Pre-market label review and registration are currently required for domestic and imported meat and domestic processed fruit and vegetable products regulated under the MIR and the PPR. The MIR also require the review and registration of meat product recipes. Mandatory label review and registration in both regulations has been eliminated as well as mandatory meat product recipe review and registration.

Concurrent with the repeal of the aforementioned regulations, CFIA will establish the means to further provide expert labelling advice, and will continue to encourage compliance through promoting a uniform, consistent approach to food labelling regulations across all domestic and imported food. The labelling requirements stated in the PPR and MIR apply to both domestic and imported products. CFIA will continue to develop work plans to monitor and enforce both the domestic and import labels of processed products by establishing frequencies of inspections for label verifications which include claims, nutritional information and other mandatory information. Regardless of label registration, label verification of domestic and imported products has always been a task performed by CFIA inspectors to monitor the compliance with Canadian regulations.

Imported meat products are subject to well-defined import inspection procedures,which are intended to subject imported products to the same rigorous inspection requirements as domestic products. Imported products which are fully and accurately labelled for consumer use may continue to proceed directly to retail sale. Imported products which do not meet Canadian retail labelling requirements will continue to proceed directly to a registered establishment for further processing or for additional labelling. Inspectors must follow inspection and sampling procedures, ensuring products are labelled completely and accurately before release for retail sale.

With annual increases in label submissions for review and registration, CFIA could no longer maintain high levels of quality service for mandatory label review and registration without a substantial increase in program resources.

This initiative will not affect food safety. The rules for labelling are not changing. There are also no changes to labelling regulations related to food safety and consumer protection. CFIA will continue to enforce all labelling requirements, including allergens, nutrition and compositional standards. Pre-registering labels was an unnecessary step that did not contribute to the safety of products. This amendment will allow the CFIA to refocus its activities on those that represent its core mandate of food safety and consumer protection.

CFIA will continue to be responsible for oversight of Canadian rules for labelling products in the marketplace.

Repeal of requirements to use registered construction and packaging materials and chemicals

This amendment removes the reference to the Reference Listing in Schedule I to the FIR. The Reference Listing sets out requirements concerning the use of construction and packaging materials and non-food chemical products for the purpose of Schedule I to the FIR. These requirements are prescriptive and may not be suitable for all industry, thus creating a regulatory burden for small business. This amendment will result in greater flexibility to industry to use any product that is safe and available to them on the market without having to wait for the product through the process to be included on the Reference Listing.

Pursuant to the FIR, industry will still be responsible for using acceptable food contact materials that meet food safety requirements but will no longer be limited to products included in the Reference Listing. The CFIA will be developing guidance for industry on the proper selection of these products.

Repeal of requirements to use registered chemical agents and cleaning compounds

This amendment removes the references to the Reference Listing from the ER. Registered egg stations will remain responsible for using chemical agents and shell cleaning compounds that are safe and effective, but will no longer be limited to products included in the Reference Listing.

Currently, chemical companies submit an application to CFIA for their cleaning compounds to be included on the Reference Listing. The costs associated with applying for products to be listed, including the submission of all the required paperwork and test results, are the responsibility of the chemical manufacturing company and not that of the egg industry.

This amendment will result in greater flexibility to industry to use any product that is safe and effective that is available to them on the market without having to wait for the product to go through the process to be included on the Reference Listing.

Many regulated parties, especially the small to medium size companies, prefer to use the Reference Listing as it allows them to ensure which products are safe without having to spend resources determining product safety on their own, which can be costly and lengthy. CFIA will be moving to providing more guidance to small business on the proper selection and use of these products.

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II

This regulatory amendment adds EAB as an enumerated pest to Schedule II of the Plant Protection Regulations as well as the regulated articles susceptible to EAB infestation. The addition of EAB to Schedule II will restrict the movement of the regulated articles from an area infested with EAB to any other area in Canada. Movement of the regulated articles outside an area of EAB infestation would be conditional upon obtaining a Movement Certificate or by treating or processing the regulated article in a manner which eliminates the risk of EAB infestation.

This amendment does not add any additional restrictions or regulatory burden, it simply mirrors the restrictions contained in the current Ministerial Order in a more permanent and responsive manner.

Adding EAB to Schedule II to the Regulations does not increase resource requirements or cause regulated parties to incur costs. Some savings may be attributed to CFIA and GoC by possibly reducing the need to issue individual Notices of Prohibition of Movement, and by eliminating the need for periodic renewal of the Ministerial Order. It is anticipated that there will be a greater responsiveness by adding EAB to Schedule II to the Regulations in the context of controlling the continued spread of EAB. This further promotes compliance with international plant health obligations in relation to Canada’s official control obligations under the International Plant Protection Convention.

This amendment will see Canada adopt control measures fundamentally similar to those of the United States in an effort to harmonize the approach to EAB control.

The CFIA initially attempted eradication efforts for EAB; however, these efforts are no longer considered feasible given the rate of spread of this pest. There is growing scientific evidence in Canada and the U.S. that EAB cannot be eradicated and the CFIA has shifted its focus from eradication to management to slow the spread. EAB is now considered an established pest in the current regulated areas. The CFIA adopted a complementary “slow-the-spread” management strategy in 2006.

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

CFIA is simplifying the pre-market approvals for fertilizers by repealing regulatory requirements concerning efficacy and quality of fertilizer products. Transitioning CFIA out of activities related to efficacy and quality of fertilizer and supplement products allows CFIA to focus its efforts on the safety of these products and places the accountability with the industry.

CFIA will continue to ensure that regulated fertilizer and supplement products are safe for humans, plants, animals, and the environment. Fertilizers and supplement products must continue to be properly labelled to avoid product misrepresentation in the marketplace and protect consumers.

Farmers’ and producers’ desire for high quality fertilizers will provide industry incentive to ensure the quality and efficacy of their products. This initiative will provide industry with greater flexibility, less red tape and a reduction in costs for product approvals.

Regulatory and non-regulatory options considered

Option 1 — Status quo

Pre-market approval, mandatory registration of labels and recipes requirements

Do not repeal requirements related to mandatory label review and registration. This option is unacceptable given the GoC’s commitment to move forward with these repeals. In addition, the current label registration system would continue to place a significant administrative burden on both industry and CFIA.

Repeal of requirements to use registered construction and packaging materials and chemicals, repeal requirements to use registered chemical agents and cleaning compounds, addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II, and repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

Do not repeal requirements to use registered chemical agents and cleaning compounds under the ER, do not remove the prescriptive provisions concerning construction and packaging materials and non-food chemical products in the FIR, do not add EAB to Schedule II of the Plant Protection Regulations, and do not repeal the quality and efficacy requirements for fertilizer products under the FR. With this option, CFIA would not be well positioned to respond to GoC commitments to streamline services and find economies.

Option 2 — Preferred option

Pre-market approval, mandatory registration of labels, recipes, and packaging materials requirements

This option removes from regulation the requirement for mandatory pre-market review and registration of labels in the PPR and MIR, and the mandatory recipe review and registration requirement in the MIR. This is consistent with the GoC’s decision to eliminate mandatory pre-market review and registration of labels.

CFIA would continue to provide information regarding processed products label regulations through local CFIA offices and through the reference document Guide to Food Labelling and Advertising. Chapter 11 of the Guide to Food Labelling and Advertising contains all the labelling requirements for processed products and is available on CFIA’s Web site. Information on labelling requirements for meat products would be available in the Meat Hygiene Manual of Procedures and from CFIA inspectors. This initiative will not affect food safety. The rules for labelling are not changing.

Repeal of requirements to use registered construction and packaging materials and chemicals, repeal of requirements to use registered chemical agents and cleaning compounds, addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II, and repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

Repealing requirements to use registered chemical agents and cleaning compounds under the ER, removing the prescriptive provisions concerning construction and packaging materials and non-food chemical products in the FIR, adding EAB to Schedule II of the Plant Protection Regulations, and repealing the quality and efficacy requirements for fertilizer products under the FRconstitute part of CFIA’s response to GoC commitments to streamline services and find economies.

In addition, the removal of the requirement for CFIA to assess the quality and performance aspects of fertilizers and supplements before they enter the marketplace is consistent with the GoC’s decision to focus on health and safety while building on the growing demand from consumers for greater responsibility from industry for the quality of the products it produces.

CFIA is intending to create a more flexible and responsive regulatory framework for pre-market approval of fertilizer products that would focus the Agency’s regulatory role on safety and permit the industry to take on a greater role for the quality and performance aspects of its fertilizer products.

Benefits and costs

Pre-market approval, mandatory registration of labels and recipes requirements

This amendment reduces the regulatory burden on industry by eliminating the requirements for mandatory label review and registration. Applicants were required to submit information either electronically or on paper to CFIA for the purposes of label and formulation review by CFIA program specialists. Cost recovery fees were charged to the applicants. Products found to be compliant were assigned a registration number either for a domestic product or an imported product.

However, this amendment does not remove the requirement for industry to continue to comply with all product standards as well as all labelling requirements, including nutrition labelling, allergen labelling and core labelling provisions, that contribute to consumer protection. This regulatory amendment would not alter information that must be present on food labels.

The repeal of mandatory label review and registration would help to expedite the design of new labels and the launch of new products. This should improve industry competitiveness by bringing products to the market sooner.

Table: Costs sample (April 2010–March 2011) for those applying for a registration number

product	Incoming Submissions	Accepted Submissions	Costs ($)
Paper	7 302	7 170	418,395
Electronic	6 104	5 803	360,168
Exemptions	379	330	N/A
Total	13 785	13 303	778,563

Benefits

Based on the table above, CFIA received 13 785 submissions, of which 13 303 were accepted and assigned a registration number. The submission reviews cost industry $778,563 and correspondingly generated the same amount for the CFIA through cost recovery fees. (see footnote 3) The total savings over a 10-year period using a discount rate of 7% is $5.8M.

Industry also incurred an administrative burden that will be eliminated by the repeal of these requirements. Based on data from stakeholders previously submitting information, the savings for industry, over a 10-year period using a discount rate of 7%, is $7M. This amount is in constant 2010 dollars.

Therefore, the total savings to industry, including the savings from cost recovery fees, over a 10-year period is $12.8M.

CFIA will no longer benefit from the cost-recovered amount of $778,563. However, that is to be expected since CFIA will no longer offer the services of label and formulation reviews and registration of the products. The annualized CFIA resource savings in regard to these services should be $129,448 per year or $909,186 over a 10-year period.

The total savings to industry and CFIA over a 10-year period using a discount rate of 7% is $13.7M.

Costs

CFIA will still provide expert labelling advice and guidance. Additional costs could be incurred by CFIA should the volume of advice requested by industry, or the complexity of the requests, significantly increase.

Repeal of requirements to use registered chemical agents and cleaning compounds

Canada’s egg industry operates under an orderly marketing policy framework called supply management that is designed to encourage production of a sufficient volume of eggs to meet market needs. In 2009, there were 1 015 registered egg farms in Canada, generating $588.6 million in total farm cash receipts. (see footnote 4)

Today, about 70% of Canada’s total egg production is sold for the table market while the remaining 30% is used in the manufacturing of value-added food and other products (liquid, frozen or dried eggs form). Canada only exported slightly less than $400,000 of fresh/preserved/cooked shell eggs. Canada imported $46.4 million of eggs and egg products. (see footnote 5)

In 2009, there were 261 federally registered egg grading stations in Canada. (see footnote 6)

The amendments will impact the 220 federally registered egg grading stations, and the chemical manufacturing companies who used to submit applications to CFIA for the inclusion of their products in the Reference Listing.

At the grading station, the eggs go through an automated process where they are washed and sanitized. The eggs are then inspected to determine their quality and eggs are divided into three grades: A, B or C. Under the previous regulatory requirements, regulated parties were required to only use chemical cleaning agents that were included on the Reference Listing, or that the operator had demonstrated to be equally safe and effective.

Chemical companies were required to submit an application to CFIA in order for their cleaning compounds to be included on the Reference Listing. From 1993 to date, 109 shell egg cleaning compounds and 52 shell egg sanitizing compounds were listed in the Reference Listing. These products were supplied by 55 companies. Based on CFIA data for the last five years (2007 to 2011), there was an average of 10 products added to the List annually. (see footnote 7)

CFIA inspectors across Canada monitor operations and take random food samples from egg grading and egg processing stations for laboratory analysis to verify compliance with food safety regulations and product standards. CFIA activities included registration of egg stations and processed egg stations; inspection and certification of domestically produced egg products and exports; import monitoring; composition, microbiological and chemical residue testing; and label verification.

Benefits

Chemical manufacturers will no longer need to make submissions to CFIA in order to get their products added to Reference Listings. This will decrease the resources (time and human resources) required for the submissions.

In terms of large egg grading stations, those which choose to conduct research on their own rather than use the Reference Listing will not be impacted by the amendment. Egg grading stations which previously chose products from the Reference Listing will now have the flexibility to use any safe product without having to wait for the product to be included on the Reference Listing.

Costs

There could be some impact on small and medium egg grading stations which lack knowledge regarding cleaning and washing chemical compounds that are fit for the purpose. They may incur minor incremental costs in learning the proper selection and use of chemical cleaning agents in complying with the ER.

There will be some reduction in the need for resources in CFIA to maintain scientific expertise to review and accept materials, and an administrative cost reduction to manage and maintain database information for approved materials. There will also be a small cost incurred to develop education material for egg stations on the proper selection and use of chemical cleaning agents.

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II

The addition of EAB to Schedule II of the Plant Protection Regulations will not result in additional costs to stakeholders. Minimal savings may be attributed to CFIA or GoC by reducing the need to issue individual Notices of Prohibition of Movement in the interim of new measures being put into place, and by eliminating the need for periodic renewal of the Ministerial Order.

No additional compliance or administrative costs will be incurred by the following stakeholders:

1. Lumber and wood packaging producers and manufacturers
2. Woodlot associations
3. Firewood producers
4. Horticulture/nursery stock distributors
5. Nurseries
6. First Nations communities
7. Hardwood/softwood sawmills and logging

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

The repeal of the regulatory requirements concerning efficacy and quality of fertilizer products under the Fertilizers Regulations is anticipated to result in annualized savings of $855K. These amendments will result in an administrative burden reduction for industry of $1.3 million over 10 years at a 7% discount rate.

“One-for-One” Rule

Estimated reduction in administrative burden

In total, CFIA estimates that the repeals, as described above, will result in a reduction in annualized administrative burden to industry of $1.2 million (in constant 2012 dollars). These results are summarized in the following tables:

Pre-market approval, mandatory registration of labels and recipes requirements

Current initiative is an “OUT” (“One-for-One” Rule).

costs	Values to Report in RIAS (see footnote 8)	Unit
Total annualized average administrative costs (constant 2012 $)	$1,050,056	Constant 2012 dollars, present value base year 2012
Annualized average administrative costs per business (constant 2012 $)	$149	Constant 2012 dollars, present value base year 2012

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

Current initiative is an “OUT” (“One-for-One” Rule).

costs	Values to Report in RIAS (see footnote 9)	Unit
Total annualized average administrative costs (constant 2012 $)	$184,896	Constant 2012 dollars, present value base year 2012
Annualized average administrative costs per business (constant 2012 $)	$948	Constant 2012 dollars, present value base year 2012

Assumptions used in the calculation of administrative burden

Pre-market approval, mandatory registration of labels and recipes requirements

This amendment reduces the regulatory burden on industry by eliminating the requirements for mandatory pre-market label review and registration. Previously, every time a business wished to introduce a new label or a recipe for a meat product, or change an existing one, they were required to submit information to CFIA for the purposes of label and formulation review by CFIA program specialists. It is estimated through the Regulatory Cost Calculator that 7 065 businesses will be impacted by this repeal. Out of that number, 6 856 are small businesses.

Between April 2010 and March 2011, CFIA received 13 785 applications for the pre-market review of labels. The majority of submissions originated from the meat industry constituting over 11 000 submissions. Due to the number of applications received from the meat industry and insufficient data from the remaining industry, the administrative burden calculation was modelled on the meat industry. CFIA estimated that completing the various administrative tasks (planning and completing forms) took three hours for an employee at the clerical level.

Based on these estimates, the total administrative costs saved over a 10-year period using a discount rate of 7% is $7M. This amount is in constant 2010 dollars.

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

Businesses have had to apply for registration of all fertilizers and supplements. Based on CFIA records, CFIA received approximately 400 registration applications per year. In addition, certain products further required a business to provide CFIA efficacy information. CFIA received approximately 50 submissions per year containing efficacy information.

CFIA estimates that completing and submitting one registration application required five hours of work by a scientist to obtain the necessary information, one hour from the company’s regulatory coordinator to complete the application, and half an hour from an employee at the clerical level to submit the application. The applications which required efficacy information required 20 additional hours from a scientist to obtain the necessary information. In the event that efficacy data for a product did not exist, businesses could apply for an exemption from registration to carry out research. The CFIA received approximately 80 applications for research exemptions per year. Those businesses requiring research exemptions were estimated to require 20 hours of work by a scientist to obtain the necessary information, one hour from the company’s regulatory coordinator to complete the application, and half an hour from an employee at the clerical level to submit the application.

Based on these estimates, the amendments will result in an administrative burden reduction for industry of $1.3 million over 10 years at a 7% discount rate. This amount is in constant 2010 dollars.

Validation with stakeholders on estimates

All estimates regarding the administrative burden placed on stakeholders by regulatory requirements being repealed were based on records, knowledge, and experience within relevant CFIA programs. Due to the nature of the regulatory actions herein and corresponding sensitivities, CFIA could not realistically validate these estimates with stakeholders.

Small business lens

Pre-market approval, mandatory registration of labels and recipes requirements

The Regulatory Cost Calculator was used to calculate savings to business resulting from the elimination of the requirements. The following table is a summary of these savings. The numbers are shown in 2010 dollars.

description	Initial Option		Flexible Option
Short description	e.g. all firms face the same reporting requirements		e.g. small businesses can report less frequently
Number of small businesses impacted	6 856		6 856
	Annualized Average ($ 2010)	Present Value ($ 2010)	Annualized Average ($ 2010)	Present Value ($ 2010)
Compliance costs	$-	$-	$-	$-
Administrative costs	$970,684	$6,817,675	$970,684	$6,817,675
Total costs	$970,684	$6,817,675	$970,684	$6,817,675
Total cost per small business	$142	$994	$142	$994
Risk considerations

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

The Regulatory Cost Calculator was used to calculate savings to business resulting from the elimination of the requirements. The following table is a summary of these savings. The numbers are shown in 2010 dollars.

description	Initial Option		Flexible Option
Short description	e.g. all firms face the same reporting requirements		e.g. small businesses can report less frequently
Number of small businesses impacted	189		189
	Annualized Average ($ 2010)	Present Value ($ 2010)	Annualized Average ($ 2010)	Present Value ($ 2010)
Compliance costs	$-	$-	$-	$-
Administrative costs	$182,661	$1,282,934	$182,661	$1,282,934
Total costs	$182,661	$1,282,934	$182,661	$1,282,934
Total cost per small business	$966	$6,788	$966	$6,788
Risk considerations

ER, FIR

The small business lens is not applicable as there are no administrative or compliance cost savings to calculate.

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II

The small business lens is not applicable as there are no administrative or compliance cost savings to calculate.

Consultation

These regulatory amendments either directly address a GoC commitment or constitute CFIA’s necessary response to GoC commitments to streamline services and find economies. For this reason, industry has not been consulted through prepublication in the Canada Gazette, Part I, on these changes but industry is aware that we are moving forward. There have, however, been consultations for some in the past on similar proposals. Industry reaction is, therefore, expected to be mixed.

Pre-market approval, mandatory registration of labels, recipes, and packaging materials requirements

Four years ago, the CFIA consulted with stakeholders on the possibility of repealing pre-market registration requirements for labels under the MIR and the PPR. The following stakeholders participated in those consultations: Canadian Poultry and Egg Processors Council; Food Processors of Canada; Canadian Meat Council; Food and Consumer Products of Canada; Further Poultry Processors Association of Canada; Canadian Council of Grocery Distributors; Canadian Association of Regulated Importers, Nestlé Canada Inc.; Canadian Federation of Independent Businesses; Canadian Association of Importers/Exporters; Canadian Pork Council.

The Canadian Meat Council had expressed strong support for this initiative, as it would ensure a more consistent approach to label review across all food sectors. Currently only meat and processed fruit and vegetables require pre-market review and registration, while other food commodities do not.

The Canadian Council of Grocery Distributors expressed their strong support for the then-proposed amendment. Industry posed a variety of questions mostly concerning the services available after the regulations would be repealed. The Further Poultry Processors Association of Canada stated a strong preference for maintaining the current review and registration system.

The Canadian Poultry and Egg Processors Council has also been generally supportive of the repeal.

The Food Processors of Canada supported maintaining premarket label registration as they deemed it to be more efficient than other compliance mechanisms and believed it maintains a level playing field with imported products.

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II

Although this amendment is a direct response to the GoC’s Budget commitment, CFIA had conducted previous consultations with industry and stakeholder groups concerning a revision to the Ministerial Order to account for new EAB finds and a possible amendment to the Plant Protection Regulations.

An EAB Day was held on December 2, 2010, in Gatineau, Quebec, and involved approximately 180 participants including federal, provincial, and municipal governments, representatives from different forest industry sectors (Ontario Woodlot Association, Hydro-Québec, Eastern Forest Model, Tree Canada), the National Capital Commission, and representatives from wood facilities. During discussions, stakeholders voiced the desire for CFIA to develop new, more effective administrative options concerning EAB. CFIA responded with the option of amending Schedule II to the Regulations to allow for a quicker, more effective response to new EAB finds. No issues were raised.

Regulatory cooperation

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

There are currently some voluntary industry-led initiatives for ensuring fertilizer quality, and industry can build on those efforts. This could provide consumers with information on product quality assurance and performance.

Rationale

Pre-market approval, mandatory registration of labels and recipes requirements

The GoC has committed to repealing regulations related to pre-market approval of labels. Repealing the pre-market registration requirement for labels should allow producers to more quickly change formulations while remaining responsible for maintaining compliance with all food safety and labelling requirements. These regulatory amendments respond to this commitment.

Repeal of requirements to use registered construction and packaging materials and chemicals

The change in regulatory requirements from prescriptive to performance-based outcomes will allow industry greater flexibility in using construction and packaging materials suitable for food. This will provide industry the option to use the most cost-effective methods and materials available to them. Industry will have access to new technologies and materials and, in turn, will allow them to function in a more competitive manner.

The removal of the reference to the materials manual in Schedule 1 of the FIR will not have a significant impact to industry. As part of the Quality Management Program of registered establishments, they will, however, be responsible to demonstrate they are using acceptable food contact materials to CFIA.

Repeal of requirements to use registered chemical agents and cleaning compounds

CFIA can no longer maintain high levels of quality service for reviews of the safety and efficacy of chemical agents and shell cleaning compounds to update the Reference Listing in a timely manner without a substantial increase in program resources.

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II

This regulatory amendment was undertaken as part of CFIA’s response to the GoC’s 2012 budget commitments. CFIA is adjusting its approach on certain plant pests including EAB from eradication to management with the goal of continuing to keep pests from spreading to other areas of the country. This new approach was guided by science-based decision making and collaboration between other levels of government and industry stakeholders.

By making adjustments to the management of EAB, CFIA will be in a better position to redirect resources quickly to respond to any new or emerging plant health issues, such as a new plant pest. CFIA will continue to work closely with its provincial and municipal partners to combat pests.

No additional regulatory burden, compliance or administrative costs will be incurred by the following stakeholders as a result of this amendment: lumber and wood packaging producers and manufacturers; woodlot associations; firewood producers; horticulture/nursery stock distributors; nurseries; First Nations communities; hardwood/softwood sawmills and logging operations.

Cost savings to the GoC are expected to be minimal. They result from the elimination of the need to periodically update and renew the Ministerial Order by CFIA.

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

This amendment is consistent with the Agency’s plan to focus on health and safety while building on the growing demand from consumers for greater responsibility from industry for the quality of the products it produces.

CFIA currently assesses the quality and performance aspects of fertilizers before they enter the marketplace. It is generally understood that the quality and efficacy of a product are the responsibility of its manufacturer and through their choices, consumers have a means of rewarding these manufacturers who present an efficacious product.

This amendment provides industry with the opportunity to take on the responsibility of monitoring and policing the quality aspects of fertilizer production to maintain consumer confidence while CFIA remains focused on the safety of fertilizer products.

Implementation, enforcement and service standards

Pre-market approval, mandatory registration of labels and recipes requirements

Although pre-market label registration would be eliminated, industry must continue to comply with all applicable labelling regulations under the MIR and the PPR. CFIA will continue to enforce all of the current labelling requirements by establishing frequencies of inspections for label verifications, which include claims, nutritional information, responding to complaints, as well as providing guidance and oversight to industry to ensure that requirements are understood and enforced.

Inspection activities are undertaken at the establishment and retail levels. CFIA verifies that inspections are taking place as defined. Within the Compliance Verification System, activities are specified to be performed by the inspector as part of the Meat Inspection Manual.

Given that these amendments repeal regulations, no service standards are necessary.

Open and transparent communication will be maintained throughout the implementation period for these regulatory amendments. Outreach will be carried out with individual stakeholders, as well as in group settings for face-to-face sessions. These activities will serve to inform stakeholders of the changes as well as to gather information to facilitate the implementation of the budget announcement.

Repeal of requirements to use registered chemical agents and cleaning compounds

Although the requirement to use chemical agents and shell cleaning compounds included in the Reference Listing is removed, industry must continue to comply with the requirements to maintain clean and sanitary conditions in the egg station and use chemical agents and shell cleaning compounds that are safe and effective. CFIA would continue to enforce these requirements.

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II

CFIA will inform partners and stakeholders of these amendments via various communications materials including a news release and a Questions and Answers document that will be also available on CFIA’s Web site. There are no additional regulatory requirements as a result of this amendment and enforcement measures will remain the same. There is no negative impact anticipated on currently regulated stakeholders.

The main change resulting from this amendment relates to the future enlargement of regulated areas following new EAB detections that would happen in a more timely manner. Accordingly, partners and stakeholders will be informed with communication materials before the new areas become regulated.

CFIA will continue its surveillance program, regulatory and enforcement activities and communications efforts across Canada relating to EAB.

CFIA will continue to consult with affected partners and stakeholders toward a long-term collaborative management strategy for EAB, and will support and promote research for better detection and control methods.

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

Amendments to the FR will only be in force as of the later of April 1, 2013, and the day on which the amendments are registered under the Statutory Instruments Act.

Contacts

Please direct all questions and enquiries to

Pre-market approval, mandatory registration of labels, recipes, and packaging materials requirements in the PPR and MIR

Parthiban Muthukumarasamy
Director
Meat Programs Division
Canadian Food Inspection Agency
1400 Merivale Road, Tower 1
4th Floor, Room 234
Ottawa, Ontario
K1A 0Y9
Telephone: 613-773-6156
Fax: 613-773-6281
Email: Parthiban.Muthukumarasamy@inspection.gc.ca

Repeal of requirements to use registered construction and packaging materials and chemicals in the FIR

Terence McRae
Director
Fish, Seafood, and Production Division
1400 Merivale Road, Tower 2
5th Floor, Room 213
Ottawa, Ontario
K1A 0Y9
Telephone: 613-773-5491
Fax: 613-773-5959
Email: Terence.McRae@inspection.gc.ca

Repeal of requirements to use registered chemical agents and cleaning compounds

Judy Scaife
Chief
National Egg Program
Canadian Food Inspection Agency
1400 Merivale Road, Tower 1
4th Floor, Room 141
Ottawa, Ontario
K1A 0Y9
Telephone: 613-773-6207
Fax: 613-773-6282
Email: Judy.Scaife@inspection.gc.ca

Addition of the emerald ash borer (EAB) as an enumerated pest in Schedule II

Michael Wood
Acting Director
Plant Biosecurity and Forestry Division
Canadian Food Inspection Agency
59 Camelot Drive
Ottawa, Ontario
K1A 0Y9
Telephone: 613-773-7630
Fax: 613-773-7261
Email: Michael.Wood@inspection.gc.ca

Repeal of the regulatory requirements concerning efficacy and quality of fertilizer products

Ewa Madey
National Manager
Fertilizer Safety
Canadian Food Inspection Agency
59 Camelot Drive
Ottawa, Ontario
K1A 0Y9
Telephone: 613-773-7185
Fax: 613-773-7163
Email: Ewa.Madey@inspection.gc.ca

• Footnote a
  S.C. 1993, c. 44, s. 184
• Footnote b
  R.S., c. 25 (1st Supp.)
• Footnote 1
  SOR/90-288
• Footnote 2
  www.inspection.gc.ca/plants/plant-protection/directives/forestry/d-03-08/eng/1323821135864/1323821347324
• Footnote 3
  The fees are $100 for a new application and $45 for an application renewal.
• Footnote 4
  Source: Canada’s egg industry. Agriculture and Agri-Food Canada (AAFC). Available from www.agr.gc.ca/poultry/gleg_eng.htm (accessed April 2012).
• Footnote 5
  Source: ibid.
• Footnote 6
  Source: ibid.
• Footnote 7
  Source: Reference Listing of Accepted Construction Materials, Packing Materials and Non-Food Chemical Products. CFIA. Available from http://active.inspection.gc.ca/scripts/fssa/reference/refresults.asp?lang=e&cmd=4&cat=
  12&subcat=55&sub=SUBMIT (accessed April 2012). The calculation was conducted by an analyst at CFIA.
• Footnote 8
  If proposal is an "OUT," these values are decreases in administrative costs.
• Footnote 9
  If proposal is an "OUT," these values are decreases in administrative costs.