PFAC Regulatory Report Fall 2021 Vol14 Issue2

All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. Regulatory Report Message from the Executive Director As another pandemic focused year ends, I want to thank PFAC members for your ongoing support throughout these challenges. I’d also like to thank you all for your patience and understanding as we adapted to virtual meetings and advocacy. While we were really hoping for an in-person conference this year in Quebec City, when we surveyed members, the numbers just weren’t great enough to justify. With another successful virtual conference, AGM, and Brazil webinar, hopefully we close the book on virtual only events. Looking forward, we are excited to offer a March Dialogue meeting in Quebec City, which will be set up as a hybrid event with mostly in-person speakers and some vir- tual, as well as an expanded program with our regular focus on regulatory but with some pet food research sprinkled in. We will aim to keep the registration fees as low as possible and hopefully have a great turn out in March, and again in a new destination for PFAC for November, beautiful Halifax, Nova Scotia. Event planning was not the only area where we had to adapt this year. With most stakeholders working from home, we had to make a concerted effort to continue government outreach and com- munications. We achieved some success with maintaining our great relationship with CFIA, but also made some new contacts in the trade commissioner service and embassy staff around the world in several key markets. We also worked to make connections with several academic institutions and food industry career and skill development organizations to grow that network, create opportunities, and continue with the messaging that pet food is a great career path option for graduates in food related programs. We have some guest lecturing spots lined up and will share internship opportuni- ties as they arise. We do need some help from PFAC member HR teams to really have the greatest benefit from these partnerships, especially with regard to highlighting pet food industry roles, career fairs and other related opportunities that could add value for members. As we wrap another challenging year, and as things hopefully start to move towards normal, we can refocus in 2022 and continue to support members in new ways. Kind Regards, Chris Nash Executive Director [email protected] 613-797-5578 1 Fall 2021Vol 14 Issue 2 A Publication for Members of the Pet Food Association of Canada A Publication for Members of the Pet Food Association of Canada Regulatory Report All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. 2 COVID-19 News We have continued to monitor things, but because things have been changing so rapidly and regularly, this report will focus on the current status as of writing. Right now, it appears that most provinces are managing COVID well, with rolling avg. case counts and hospitalizations decreasing or staying steady. Vaccination levels are relatively high across the country, with 83% of eligible people fully vac- cinated, with some provinces better than others. Most provinces also now have a vaccine passport or certificate system in place. The Canada-US land border is scheduled to open for fully vaccinated people who also require a negative test, on November 8 for non-essential travel. Essential travellers, who have been allowed to continue to cross the border, may require full vaccination by January 2022. Anecdotally, COVID has had a significant impact on the labour force around the world that is also impacting supply chains. There have been container shortages, technology shortages, and others, but most significantly there has been a lack of labour, some calling it the great resignation. This will be something to continue to monitor how supply chains could be impacted moving forward, and if labours costs increase, how that could impact prices of ingredients and other supplies. Regulatory Affairs Advisory Working Group (RAAWG) The RAAWG is a group of volunteers who are appointed for a one or two-year term to help pro- vide detailed analysis of the regulatory issues we work on. The group is active and there is an expectation that a volunteer will have the time to commit to review and comment as requested. The RAAWG for 2021 is made up of the following people: Chris Nash PFAC Melanie Sippel Trouw Nutrition Canada Laurie Ross Mars Janice Baker Nestle Purina Canada Mary Ann Zamora Grepe Elmira Pet Products Sean McNear Blue Buffalo Jerry May Freshpet Daisy Yandoma Boreal Pet Food Michael Faurot Hill’s Pet Nutrition Robin Relyea R.C. Hagen There will be spots opening up for this group at the end of the year, so if interested in participat- ing please contact Chris Nash. The Board will decide on the group at its February 2022 planning session. A Publication for Members of the Pet Food Association of Canada Regulatory Report All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. 3 RAWWG Objectives 2020 - 2021 These will be made available in more detail and will be ongoing until completed, assessed on an annual basis. Not currently in any order of priority. 1. Improve CFIA communications 2. BSE Negligible risk status 3. DSL/New Substance Regulations 4. GAPFA work 5. Pet Food Labelling Modernization 6. Improve issue management AAFCO One of the key objectives for the RAAWG and PFAC this year was to get much more involved with AAFCO, especially since the Pet Food Labelling Modernization (PFLM) work is in full swing. To accomplish this, PFAC took some steps to be more active within AAFCO, including receiving an advisor role on the Pet Food Committee, as well as being active on the PFLM implementation work- ing group. Finally, the RAAWG worked to develop some comments on the proposed PFLM model regulations. PFAC submitted comments to AAFCO in April, and this resulted in a meeting to discuss those comments and concerns. PFAC also shared information on small package mock-ups from a couple members, but also solutions for small packages with regard to the nutrition facts box and nutritional adequacy symbols. PFAC also submitted comments to AAFCO on their latest changes to the proposals and took part in the October 27 webinar. PFAC will continue to work on this initia- tive on behalf of its members, especially from the unique Canadian perspective of bilingual labelling requirements. Government and Stakeholder Relations One of the strategic objectives for this year was to increase government outreach, especially to elected officials. To accomplish this, PFAC took a step wise approach. The first step was to com- plete an economic impact analysis of the pet food industry in Canada. This was done using Statistics Canada data, trade data and other information to come up with some key numbers to be used in communications. The second step was to undertake a letter writing campaign, using the economic data to introduce PFAC and highlight the pet food industry to elected officials. Letters were sent to several key ministers, the PMO, individual MPs in ridings where PFAC members reside, as well as opposition leaders and those in the opposition in the shadow cabinet. This was done at the end of May, prior to the House of Commons rising for the summer. We ended up with several positive continued on page 4 A Publication for Members of the Pet Food Association of Canada Regulatory Report All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. 4 continued from page 3 responses, and several key meetings. We met with the senior policy advisor to the Minister of trade, as well as senior policy advisor to Erin O’Toole. The PMO forwarded the letter to several other Ministers, and we had a few other meetings with opposition MPs who shadow the Minister of trade, agriculture, and labour. W e also met with a couple individual MPs with PFAC members joining the meeting. Overall, it was a successful first step. Then of course the election was called, and things may have changed. As you are now aware, the election was called for September 20. The results were close to the same, with a Liberal minority, however the Liberal party picked up 3 seats, while the Conservative party lost 2, and the Green party lost 1. The biggest change was that the Liberal party and NDP both won more seats in Alberta compared to 2019. As of writing this report, the government announced its cabinet on October 25, with mandate letters to follow. For the Ministries that PFAC deals with the most, there were not any changes, with Minister Bibeau and Ng continuing in their roles in agriculture and trade. PFAC will monitor and develop a new strategy for the new government. PFAC has made several new relationships with stakeholders that should end up contributing to the goal of highlighting the pet food industry as a good career path option. PFAC has become partners with FoodGrads, who has several opportunities for collaboration, including a podcast that highlights pet food industry positions, career fairs, materials on what the pet food industry can offer new grads in terms of job prospects. PFAC members can join FoodGrads for a discount. Another partnership that was made was with Food Processing Skills Canada (FPSC). This organization develops learning materials for specific job categories in the food industry, as well as offers some government funding for internships. They provide other services and other opportunities that could be of value to member s that still need to be developed. Finally, PFAC has been working with Food and Beverage Ontario on their CareersNOW! Initiative. This is a targeted approach to supporting food industry companies in hiring, career fairs, and other opportunities that are focused on Ontario, but should be available nationwide in the future. Their job board for example reaches several Canadian academic institution job boards, and links them all together. If any PFAC member is interested in the above opportunities, please contact me. We need more engagement on these, so please let your HR groups know. A Publication for Members of the Pet Food Association of Canada Regulatory Report All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. 5 Domestic Substance List Update After much discussion on this in 2020 and working with Environment and Climate Change Canada (ECCC) on it, there was one issue that needed clarification. The way that the Canadian Environmental Protection Act (CEPA) is written, its not clear whether pet food ingredients are covered under the exemption of being regulated under certain pre-existing regulations. Because the pre-existing regulations are the feed regulations, and even though most pet food ingredients are exactly the same and from the same supply chain as livestock feed, and because pet food isn’t regu- lated under the feed regulations, it isn’t clear how they would be considered. This goes against what ECCC has told us in the past, that pet food ingredients would be exempt under this rule. When asked to clarify however, they did not respond to a couple communications. With this in mind, the RAAWG recommended that PFAC wait and see, since this regulation has been in place since 2000, and has not been enforced to date, and because it isn’t clear and ECCC has not been helpful, it was felt that the risk is minimal. PFAC will reach out to a higher authority on this at a later date to verify where pet food ingredients fall. This file has been worked on for a decade with no conclusion, so it is unlikely that it is a high priority on ECCC’s list. CFIA News There have been no published changes with regard to CFIA other than the Chief Veterinary Officer has changed from Dr. Jaspinder Komal to Dr. Mary Jane Ireland. The other thing to report on CFIA is that the animal products and by-products group has been pulled in different directions to work on different files, including African Swine Fever and other animal health related topics. Import Updates Certificates from the US – in April, two new sets of import conditions came into effect for pet food from the US. There was one for heat-treated pet food and one for raw/minimally heat-treated pet food. To qualify for import as a heat-treated pet food, the animal origin ingredients must have undergone the following treatments: • Egg ingredients: 57 °C for 27 minutes • Poultry ingredients: 65 °C for 14 minutes, or 74 °C for 5 minutes • Cattle, sheep, goat, or swine ingredients: 70 °C for 30 minutes, 79 °C for 30 seconds, or 90 °C internal temperature continued on page 6 A Publication for Members of the Pet Food Association of Canada Regulatory Report All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. 6 Otherwise, the pet food must be imported using the conditions for raw/minimally heat-treated pet food. The statements in the certificates on shelf stable are therefore removed and ‘processed’ pet food doesn’t technically need to be shelf stable. This was done to include those products that are heat-treated but are refrigerated. Pet food only containing plant ingredients – I was asked this question a few times from a few mem- bers, so I will clarify the answer I received from CFIA. As always, the definitive source of import conditions is found in AIRS. The HS Code 23 09 10 1575 08 applies, and from the US, only an ingre- dient list is required according to AIRS. This was from CFIA animal products group and the horticul- ture group, but it is important to verify in AIRS to ensure the conditions are correct. World Market – Export Updates Russia Unfortunately, there is nothing positive to update regarding Russia. Canadian companies are cur- rently suspended indefinitely from export to Russia. The CFIA has been in contact with Russian authorities and sent materials that were requested to be completed by Russia, but the CFIA has not heard back and are still waiting to set a meeting. On the other hand, Russian industry is saying that Canada has not communicated at all with Russian officials, which is blatantly untrue. Several other countries are also affected, with many companies suspended in Germany, Netherlands, Belgium, Lithuania, and the United States. PFAC will continue to monitor and support members however possible. China There has been no update on China from the CFIA with regard to approval of new facilities. A posi- tive step towards improved China-Canada relations is the completion of the trial for Meng Wanzhou, which resulted in a deferred prosecution agreement between her and the US. Therefore, she was released to return to China and at the same time, the two Canadians being held by China were released. Whether this was the main sticking point for moving forward, or whether there are other political reasons for China to stall approvals is unknown. Without a current direction on China, it is best to wait until the mandate letter comes out for the Minister of trade and global affairs. continued from page 5 continued on page 7 A Publication for Members of the Pet Food Association of Canada Regulatory Report All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. 7 India The Indian government finally has formally published import conditions for pet food in their Gazette. Canadian companies can export to India using a generic certificate from the CFIA with the import conditions listed. It is unknown at this time whether the CFIA will negotiate a formal export certifi- cate with India. BSE Status In May, Canada received negligible risk status for BSE from the OIE. In discussions with CFIA, they have said that they will work with foreign countries on being recognized globally. They will start with the US, and go from there, focusing on countries of priority for the different commodities that are affected. PFAC will continue to monitor the situation and work with CFIA to ensure that changes are made to all countries where Canada could benefit from being able to include beef prod- ucts in its pet food. European Union Current export certificates will be accepted until March 15, 2022, if signed before January 15, 2022. The CFIA is encouraging exporters to sign up for and use the TRACES NT system for doing busi- ness with the EU. For further information, please see here. The EU has developed ambitious policies on climate change and environment. Called the EU Green Deal, these policies aim to reduce greenhouse gas (GHG) emissions, so the EU is the first climate neutral continent, with a goal for 2050. Some key policies to watch as part of this goal includes the Feed Additive Regulation, packaging and circular economy action plan focusing on plastics, and the Farm to Fork strategy which aims to produce food products in a sustainable way. The latter could impact imported products due to the conditions for reduction of antibiotic use in farm animals, pes- ticide use and labelling initiatives to make consumers aware of sustainable products vs. unsustainable. The EU code for responsible business and marketing practices is another initiative where companies are making voluntary sustainable commitments. This could pressure other companies to follow suit, as consumer expectations change. This could cover areas for pet food such as transport, packaging, environmental footprint and claims, animal welfare, antibiotics and pesticides use in raw materials. PFAC will monitor and gain further knowledge of what these regulatory and voluntary changes mean for pet food as a whole, and how it could impact exports to the EU. continued from page 6 A Publication for Members of the Pet Food Association of Canada Regulatory Report All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. 8 World Markets – Trade As expected during the pandemic, and from lack of travel by government officials, there hasn’t been much movement on any free trade agreements. The work is continuing on MERCOSUR and some work on ASEAN markets, but there have been few updates regarding any major progress. The Government of Canada has updated its model Foreign Investment Promotion and Protection Agreement (FIPA). This new modernized and inclusive model FIPA text will serve as the basis for Canada’s future FIPA negotiations and represents the first comprehensive revision since 2003. The development of the new model was informed by public consultations launched in 2018 to gather Canadians’ views. Informed by these broad stakeholder consultations, Canada’s new modernized and inclusive model FIPA will: • Provide a stable, rules-based investment environment for Canadian businesses investing abroad. • Ensure all Canadians, including women, Indigenous peoples, and SMEs, are able to benefit from these agreements. United Kingdom - Trade continuity agreement The Canada-UK TCA provides Canadian exporters with continued preferential access to the UK market and includes the elimination of 98% of tariffs on Canadian exports to the UK (carried over from CETA) on entry into force, and the elimination of an additional 1% of tariffs on Canadian exports to the UK by January 1, 2024, when the TCA is fully implemented—which will bring the elimination of tariffs on Canadian exports to 99%. GAPFA Priorities and Projects 2021 Due to COVID-19 the GAPFA meeting scheduled for June 2020 in Brussels has been postponed until 2022 in-person. GAPFA still held its regular online meetings and held its general assembly meeting virtually and dealt with key statutory items. continued on page 9 A Publication for Members of the Pet Food Association of Canada Regulatory Report All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: [email protected] • www.pfac.com This memorandum provides information about regulatory initiatives affecting the import and export of pet food and is based upon the most current information available at the time of publication. 9 Key objectives for GAPFA 2021: •OIE Pet food standard development •Sharing of non-tariff trade barriers by GAPFA members • GAPF A Factsheet on protein, carbohydrates, fat • Guidance de velopment for complete & balanced until the end of shelf life • Re view of research on inorganic phosphorous • Par tnership with WSAVA and HABRI • Creating a list of experts from GAPFA members on various testing protocols Upcoming Events Market Intelligence Webinars India – September 15, 2021 Hong Kong - November 16, 2021 Brazil – November 4, 2021 South American countries (Argentina, Columbia, Peru, Chile) – December or January European Union – January Singapore and Malaysia – March possibly at Dialogue meeting United Arab Emirates - May March 29-30, 2022 Dialogue Meeting Quebec City, Quebec Chateau Frontenac Day 1 – will be focused on regulatory files and government speakers Day 2 – possible CFIA 1 on 1s, and with a focus on pet food industry research Keep your eyes open in January for further details and registration! November 8-10, 2022 PFAC Annual Conference W estin Nova Scotian Halifax, Nova Scotia continued from page 8