Strengthened Oversight of Imports under the Proposed Imported Food Sector Product Regulations

Background The proposed Imported Food Sector Product Regulations would introduce food safety and licensing requirements for importers in the Imported Food Sector to enable better identification of unsafe foods and ingredients, and allow the CFIA to identify and engage importers Food safety is a priority of the Government of Canada and the proposed regulations are a key element to fulfill the Prime Minister’s Food and Consumer Safety Action Plan announced in 2007 – an important building block for the Agency’s food safety agenda – in-line with Canada’s key trading partners (US, EU and Australia/New Zealand) that have implemented similar requirements and/or licensing regimes at the importer level These proposed regulations mark the first stage of the Agency’s Regulatory Modernization initiative, moving towards a new and improved inspection model, and the Safe Food for Canadians Act (SFCA) – will continue forward with the Safe Food for Canadians Action Plan and through regulations drafted under the SFCA 2

The CFIA has embarked on a change and modernization agenda, propelled by the new Safe Food for Canadians Act (SFCA), with a focus on: stronger food safety rules; more effective inspection; commitment to service; and more information for consumers. The SFCA is the cornerstone of CFIA’s sweeping change agenda, that will help bring about legislative change aimed at promoting safer food and better protection to optimize the health and safety of Canadians and make Canadian businesses more competitive globally. Key change agenda initiatives include: –Inspection Modernization; –Food Regulatory Modernization; –Food Labelling Modernization; –Compliance Promotion; and –Food Safety Action Plan’s Import Licensing. –3–3 CFIA’s Change Agenda

Imported Food Sector (IFS) 4

IFS Trends The IFS is vast, imports are received from over 190 countries many of whom have food safety systems in very formative stages of development – “Risks are no longer confined within our borders, and the Agency must face the challenge and focus its resources where the risk is greatest and where there is the greatest net benefit to Canadians” CFIA website Of the estimated 25,000 importers, 96% are micro or small in size but collectively import transactions for the whole sector are valued at over $1 Billion dollars/month with 50,000 transactions/month 5

Regulatory Requirements The proposed Imported Food Sector Product Regulations will require importers to meet certain general and licensing requirements to import IFS products into Canada General Requirements Notify the CFIA within 24 hours of determining that a food safety hazard exists Develop, establish and maintain a written recall plan to help identify and remove products of concern from the Canadian marketplace quickly and efficiently Maintain records associated with the imported products, as well as those related to the recall plan and the Preventive Food Safety Control Plan (PFSCP) Licensing Requirements Complete an application for an IFS licence Licence holders must have, implement and maintain a written PFSCP and demonstrate that they have taken the necessary measures to reduce food safety risks 6

Collection of the CRA Business Number An IFS licence application will require applicants to provide key identifying information. To follow government best practices, and to use a unique identifier, the regulatory proposal requires applicants to provide their CRA Business Number. Question 1: Are there any concerns with the requirement to provide this piece of information? If so, what is the nature of the concern and how might it be resolved? 7

Proposed IFS Licence Under the proposed regulations an IFS licence number will be required with each shipment of goods Electronic application through the CFIA Licence Management System Licence will apply to entities, not establishments – current draft – one licence per legal entity No fee per shipment No limit on number of shipments Licence is valid for 2 years Proposed Cost of $259 for 2013/14 8

Number of Licences per Legal Entity An applicant for an IFS licence may only hold one licence per their legal entity in the current draft. Consideration is being given as to whether legal entities should be allowed to hold multiple licences based on distinct operating names Considerations: – allowing an unlimited number of licences dilutes enforcement abilities (i.e. cancellation of one licence is rendered meaningless if they also have other IFS licences) – some larger importers have cautioned that the risks and logistics associated with only having one licence for their operation are significant and unmanageable – enforcement of multiple licences issued per operating name can be managed through the legal name of the licence holder as well as their CRA Business Number Question 2: Is there support for allowing one legal entity to hold more than one IFS licence for different branches of their operation? Please identify any concerns with this approach 9

Proposed Implementation: Providing Flexibility to Industry The coming-into-force of the proposed regulations will begin with an Interim Compliance Promotion phase that will last for at least one year Will allow large businesses time to develop new models and agreements Will allow time for small and medium enterprises to : – become aware of their obligations and familiarize themselves with the appropriate legislation; – comply with the regulatory requirements; and – obtain a licence 10 Drafting regulations Compliance promotion and education Enforcement Regulations in force Drafting regulations Compliance promotion and education Enforcement Regulations in force 75-Day Comment Period

Engagement Approach Consulting with importers to better understand their issues and needs, especially micro and small-sized importers Working with partners to identify opportunities to assist importers under this regulatory proposal to build capacity to develop and implement a PFSCP Developing guidance documents to help industry meet the regulatory requirements Strong service oriented approach through the use of an electronic client interface for licence applicants 11

Supporting Resources The following resources will help support industry to meet the regulatory requirements immediately: 12

Supporting Resources (cont’d) In addition to the resources that will be available immediately, the following resources will help support industry to meet the regulatory requirements at coming-into-force: Question 3: What other tools or forms of support should the CFIA make available to help industry meet the regulatory requirements? 13 Regulatory RequirementResource All provisions of the regulations Importer’s Guide Licensing Preventive Food Safety Control Plan models Licence application and technical support from the Importer Licensing Unit Preventive Food Safety Control Plan Preventive Food Safety Control Plan models

Engagement Activities Targeted discussions have been, and continue to be held with industry, a working group has been formed with CBSA to ensure system interoperability and smooth implementation Publication in Canada Gazette, Part I, will launched a formal 75-day comment period 17-city Agency overview of the regulatory clauses Multi-lingual information materials in development recognizing the cultural diversity within the import sector 14