Gaylene Simpson, Agri-Business Policy Analyst
Canada’s agriculture and agri-food sector is a diverse industry with many stakeholders involved in the production of the food products Canadians consume and export. Small- and medium-sized enterprises (SMEs) that are part of this process thrive in an environment that is fast paced, innovative and fiercely competitive. To be successful, they must be innovative and flexible enough to identify and capitalize on business opportunities. However, the regulations put in place to safeguard food products place a significant workload on the industry.
Regulation is consistently identified by small business as second only to taxation in its overall negative impact. The Canadian Federation of Independent Business’s (CFIB) 2005 report Rated “R:” Prosperity Restricted by Red Tapeconservatively estimates the total cost of regulation at $33 billion a year. Sector specific breakouts of the data in the Rated “R” report reveal that agricultural businesses are among the hardest hit by regulation. This report investigates an important component of that burden – the impact of the Canadian Food Inspection Agency (CFIA) on business.
While SMEs understand that a certain amount of regulation is important for food safety, excessive red tape has a negative impact on the overall productivity of the sector. The challenge for businesses rests in maintaining the safety of the food products produced and dealing with government red tape without hindering their performance.
The CFIA delivers inspection programs related to food, plants and animals across Canada. CFIA’s role is to enforce the food safety and nutritional quality standards established by Health Canada, and to set standards and carry out enforcement/inspection for animal health and plant protection. As such, the CFIA interacts with SMEs in the food production industry on a regular basis and members of the CFIB have identified the Agency as one of the government bodies that is most burdensome, from a regulation point of view, to their business.
Typically, businesses that deal with the CFIA must do so in order to be compliant with various legislative Acts. The Agency is the key entity responsible for the ‘programs and services designed to protect Canadians from preventable food safety hazards’. As such, the CFIA has a monopoly on the services it provides for SMEs. In this regard, the CFIA has a significant impact on businesses involved along the food production chain.
Many of CFIB’s members are involved in activities that are regulated by the CFIA. To provide an assessment of the Agency’s interaction with the SME sector, CFIB surveyed independently owned businesses across the country that interact with the CFIA, including those involved in primary production, food processing, and fishing. CFIB’s survey regarding the CFIA was conducted by password-protected email in the fall of 2006. A total of 380 members participated, which corresponds to an overall margin of error of plus or minus 5.0, 19 times out of 20.
CFIB’s survey provided businesses with an opportunity to expand their views of dealing with the CFIA using ‘open-ended’ questions and some of these have been provided as appendices to this report. As well, selected comments have been inserted throughout this document.