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VOIC Notes for Remarks to Room
9, For transcript of the entire proceeding, please
visit: CLICK
HERE! The Agreement on Internal
Trade (AIT): A Litany of Broken Promises and Missed Opportunities Good afternoon.
I am Background:
The Regulatory Jungle for Dairy Alternatives The inception of VOIC in
2002-2003 was due in part to interprovincial trade issues, beginning
with efforts to address That issue, although it has
garnered the most publicity over the years, is really part of a
bigger interprovincial trade issue which is one of VOIC’s
principal focuses: opening the Canadian market to a range of
innovative vegetable oil-based products that are alternatives to
traditional dairy products. These are blended dairy and
vegetable oil spreads and beverages and so-called dairy analogs,
products that are 100% canola or soy and could substitute for a
traditional dairy product. These
products meet a consumer demand for foods lower in saturated fat and
rich in vegetable oil polyunsaturated fats that are known to be a
factor in reducing the risk of heart disease.
These products also meet the demand for alternatives among
the 20 per cent of the Canadian population that is dairy-intolerant. As illustrated by Appendix 1
(prepared by the Federal/Provincial/Territorial Agri-Food Inspection
Committee), makers or potential makers of these products face
different regulations from province to province.
Some provinces allow the manufacture and sale of these
products; some do not; some only allow through ministerial
exemption; others specifically disallow.
And, generally speaking, some of these regulations are
actively enforced and others are not. Overlaying these differing
and conflicting provincial regulations are federal requirements,
mainly those overseen by Health As noted in a report
submitted by Agriculture Canada to all Agriculture Ministers at that
time: “… in the
Canadian agri-food industry there is a demand for a wider range of
dairy blends, alternative (vegetable oil/protein-based) foods and
margarine. However,
differing provincial regulations are preventing firms which process
these products from being fully competitive because economies of
scale are difficult to achieve in a fragmented market.”
(June 16, 1995 memo from Michael Gifford to participants in
April 28th meeting on dairy blends, alternative foods and margarine). With that background, I
would like to focus practically on our experience in attempting to
use the Agreement on Internal Trade to address these interprovincial
barriers. In December 1994, After some prodding, “The
purpose of the draft regulation is, in accordance with the Agreement
on Internal Trade, to harmonize the Less than a month later, The
AIT: The Trade Agreement That Does Not Work It took five years before
the sectoral and Chapter 17 consultations were completed and On the In April 2002, Following That was the end of round
one. Five years and no
result and no recourse. The
vegetable oil industry’s losses due to Roughly parallel in timing
to these events, The elimination of these
prohibitions would open up a whole new market for alternatives to
traditional dairy products that consumers are increasingly looking
for as a means of reducing their saturated fat intake and improving
their diet. The repeal of the EOPA was
supposed to be immediate but took more than three years, two
governments and three An internal trade Panel
considered the matter and found that the EOPA was inconsistent with
the agreement and that any replacement measure enacted under other
legislation would be a barrier to trade and inconsistent with the
agreement. The Panel advised It should be noted that the
minister of the day circulated a letter to stakeholders the previous
June stating the government would not erect new barriers following
the repeal of the EOPA (attached as Ontario Letter to DFO).
And upon direct examination at the hearing the In spite of these assurances
and the recommendations of the Panel, the Milk Act amendments were
made and these remain in place to this day denying industry
opportunity and consumers expanded choice. Round two of the AIT and
Quebec margarine colour commenced in 2004 when Alberta, Manitoba and
Saskatchewan accepted VOIC’s request to challenge the colour
regulation as Ontario had been unable to do so. Free traders at heart and
with a constituency of thousands of canola growers and processors,
the western provinces pursued the matter vigorously and the ensuing
Panel decided unambiguously in their favour, finding that the colour
regulation has “impaired and caused injury to margarine producers
and their upstream suppliers” and that “Quebec repeal the
measure forthwith, and in any event no later than September 1,
2005.” In August 2005, VOIC
received a letter from the Quebec Minister of Agriculture (attached
as Laurent Lessard Aug 26 05) stating that “… the They must still be reviewing
the Panel’s recommendations because the margarine colour
regulation remains in place today. The
Cost of Ontario and Quebec’s Trade Restrictions Damages to date to margarine
producers and upstream suppliers combined since In terms of lost economic
opportunity as a result of This
is a Health Issue Not Only a Trade Issue In recent years, Canadians
have become increasingly concerned about the healthfulness of their
diets and the amount and types of fat they are consuming.
Blends and analogs are low in saturated fat and rich in
plant-based fats – the polyunsaturated “essential fatty acids
recommended by nutrition science to lower the risk of heart disease. Health I’ll conclude with some
observations: Ø
The two largest provinces in
Confederation have let Canadians down in terms of our collective
desire to achieve a unified internal economy by making a mockery of
the Agreement on Internal trade; Ø
The federal government has been
invisible throughout the process I have outlined.
For example, based on the adoption of a recommendation by the
Federal/Provincial Agri-Food Inspection Committee that provinces
should repeal regulations relating to dairy analogs and blends and
defer to existing federal standards, VOIC asked the federal
government to intervene in the EOPA dispute. This request was denied
on the basis that the federal government’s intervention “would
not be helpful”. Ø
Ø
Section 121 of the Constitution
Act, 1867, (“All Articles of the Growth, Produce, or Manufacture
of any one of the Provinces shall, from and after the Ø
Responsibility for the AIT within
government is unclear. More
than once, we were advised by the Ontario Minister responsible for
internal trade that the Minister of Agriculture held the file.
On other occasions we were told by the Agriculture Minister
that the CIT Minister held the file. Ø
The Agreement on Internal Trade is
for Canadians, whether they be individuals or private sector firms.
Yet, they have no recourse should governments fail in the
administration of the Agreement. Ø
As a result of two Panel reports on
margarine colour and the EOPA a substantial amount of AIT
jurisprudence has been established on the interpretation of the
Agreement which, in the context of a binding agreement and a renewed
commitment among parties, could significantly contribute to
realization of interprovincial trade barrier removal. In
Short 1) VOIC has been through two AIT dispute resolution processes resulting in Panel findings: Ø One has been completely ignored; Ø One has been ignored in part. The
Agreement needs to be significantly strengthened with appropriate
remedies when parties are out of compliance. 2)
It is ironic that
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