PFAC Regulatory Report Spring 2021

All rights reserved. Copyright 2019. Pet Food Association of Canada PO Box 238, Carleton Place, Ontario K7C 3P4 Tel: 416-447-9970 • Email: petfood@pfac.com • 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 Welcome to 2021, where we are starting to see glimmers of a light at the end of the tunnel. The COVID situation where PFAC is based, in Ontario, has gotten progressively worse since the end of 2020. At this point there are still thousands of cases a day, the ICU’s are filled up, and it looks dire. Hope in the form of increasing levels of vaccines coming to Canada is on the horizon. At the time of writing this, Ontario is on the precipice of significantly ramping up vaccination and opening it up for many more age categories in the coming weeks. In hot spots across the prov- ince and country, vaccinations have been prioritized. While we still have a way to go, it seems like things will begin to turn around here shortly. This is good news for the industry, which has remained an essential supply chain since the beginning, other than pet specialty retailers being closed, consumers and pets could still get our sectors’ products relatively easily. The PFAC Board of directors met in early February to set some pretty ambitious objectives for 2021. PFAC will continue to improve its relationship with the CFIA through increased commu- nications, with a commitment from CFIA to provide more proactive updates. PFAC also aims to raise its profile across the Canadian government through targeted advocacy and government rela- tions, starting with an introductory mail campaign. To inform this, PFAC undertook an economic impact study of the pet food industry in Canada, and will use those results to paint a picture for government officials of the importance of the sector. PFAC has taken a much stronger position with AAFCO, gaining an advisor seat on the Pet Food Committee, as well as being a part of the Pet Food Labelling Modernization (PFLM) implementa- tion committee, and providing comments and regular feedback to the process. We are in the process of updating and modernizing our website, which will provide more infor- mation on the pet food sector, but also an improved members only area. This is part of our goal for improved communications with members. We have begun the process of increasing commu- nications on the work of the Regulatory Affairs Advisory Working Group (RAAWG), providing more regular and transparent updates on its objectives and work. We will continue to provide more information to members through more regular email campaigns. continued on page 2 1 Spring 2021 Vol 14 Issue 1 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: petfood@pfac.com • 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. PFAC has partnered with Food Grads to raise the profile of the pet food industry as an option for a career path among new and recent grads. The Food Grads network includes a growing list of schools in Canada and the US, and a network of talent that come from food type programs. This partnership will allow PFAC to leverage the network to provide more information on pet food careers, and help the industry be an option in the minds of students. Along the same lines, PFAC will begin its own campaign with several schools to work together to spread the word that the pet food industry is a great career path. We will also explore the possibilities of funding research or a scholarship to go even further. Finally, PFAC has applied for Canadian government funding, under the Agriculture and Agri-food Canadian Agricultural Partnership funding envelope, in the agri-marketing program for national associations. If approved, the funding will help offset some costs that will free up some money for other work as identified in these objectives. Overall, it has been a busy start to 2021, with an ambitious set of objectives. I hope that all mem- bers are ready to contribute and help grow the association and industry. We’ll have a very busy May, leading into a busy member renewal period, and some great opportunities that will be possi- ble this year. There may also be the chance to meet in person in November, although this will not be decided until September and will depend on where Canada stands with COVID at that time. Thanks for your ongoing support, and as always if you have any questions, or challenges where we can help, please don’t hesitate to contact me or Darcy at any time. Kind Regards, Chris Nash Executive Director cnash@pfac.com 613-797-5578 continued from page 1 2 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: petfood@pfac.com • 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 Affairs Advisory Working Group (RAAWG) The RAAWG is a group of volunteers who are appointed for a one or two-year term to help provide 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. 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 3 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: petfood@pfac.com • 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. COVID-19 News COVID status in Canada at time of writing depends on province, but the larger provinces such as Quebec, Ontario, Alberta are struggling to control COVID spread. Canada will be receiving significantly more vaccine doses in the coming weeks through May, and will increase again in June, so hopefully vaccinations will ramp up. In many provinces there has been a cycle of lockdown, re-open, lockdown for months. This has been difficult to track, as some provinces aren’t very clear on restrictions, and sometimes have walked things back on a whim. Overall though, the pet food supply chain has been essential from the beginning and has stayed that way. In Ontario, when they moved to restrict big box stores to grocery and personal care products only, pet food was included. The only change throughout is that pet specialty retailers have been closed for pick up only. It is difficult to say whether this has had an overall impact for consumers. Some associations are pushing for the government to open at 25% capacity, but its hard to say if this will go anywhere. There haven’t been many reports of supply issues due to COVID in 2021, as there were earlier in 2020. The largest risk at this point is whether staff at a pet food facility are infected with COVID, and what that could lead to, but there haven’t been any reports of that happening, and with vacci- nations ramping up, those employees should be soon in line to be vaccinated. The US-Canada border is still closed, and likely will be for a while, although there has been some talk for a vaccine passport to be implemented, whereby those who are fully vaccinated and can prove it, may be able to travel. At this time, Canada has not made any commitment to this, but have been talking about it, and I know the US has also, along with other countries in Europe and around the world. Assuming vaccinations increase, and supply continues to grow, it may be possible that things could be approaching normal by the end of the year. This means that PFAC may be able to host its annual conference in November, but we will not decide on whether it will be in-person until later in the summer, depending on how things are going. We will of course keep you posted. 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: petfood@pfac.com • 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. Dialogue Meeting 2021 – Virtual The 2021 Dialogue meeting was virtual and split into two sessions on May 12, 2021. The morning session included a presentation from NielsenIQ about trends and data on the US and Canadian pet food sectors. To conclude the morning session, the CFIA provided updates on import and export activities, and allowed time for a question and answer period. The afternoon session started with a presentation by myself and the RAAWG Chair outlining the groups work and how PFAC members can help. Peter Tabor also gave an update on some activities Domestic Substance List Update During the May Dialogue meeting, I spoke about providing PFAC members with a guidance doc- ument on how to comply with the Canadian Environmental Protection Act (CEPA), specifically the New Substance Notification regulations. Each substance used in Canada has to be on the Domestic Substance List (DSL) or exempt from the regulations in some way. If something is not on the DSL, it has to be notified to Environment and Climate Change Canada (ECCC) so they can assess it and its environmental impact, and place it on the DSL or not depending on what they find. For the pet food industry, ingredients that are found in the Feed Regulations Schedule 4 and 5 are exempt from notification, but also many ingredients are also already on the DSL, or they are mini- mally processed and could be considered to ‘occur in nature’. The guidance document that is provided to PFAC members provides an overview on how to comply with regulations. What I did was receive over 1000 ingredients from a few member com- panies and reviewed each one, searched for each on the DSL or in the Feed Regulations, and then justified whether I felt it was exempt from the regulations, or needed to be notified. continued on page 6 5 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: petfood@pfac.com • 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. CFIA News Early in 2021, Mohit Baxi, who was Director of import export group and oversaw the CFIA ani- mal products and by-products group left CFIA. Upon his leaving, Suminder Sawhney and Pierre Lafortune are considered as co-directors, until a formal replacement is found. Lyzette Lamondin is still the Executive Director of the International Programs directorate and oversees animal, plant and food import/export as well as e-certification and digitalization. continued from page 5 Since the pet food industry still has to comply with these regulations, PFAC members must start the process of looking at their own ingredients to see where they stand. The guidance materi- als will help with that, but I encourage each PFAC member to perform their own due diligence, understand the regulations, and start to comply. As ECCC mentioned at the Dialogue meeting, they are in the process now of promoting compli- ance, and after that step will take enforcement action. PFAC cannot do it all for its members. We do not have the financial or staff resources to review every company’s ingredients. We can provide guidance and support for members to help understand what is required of your companies under these regulations. That said, the majority of ingredients used in pet food and treats will be exempt – either on the DSL already, found in the Feed regulations, or can be considered to occur in nature. There are some ingredients however that will need to be notifi ed. PFAC can help you through this and provide you with some steps to take to gather more information and get support from ECCC to ensure you fully understand what you need to do. If you have any questions or concerns, please feel free to contact me any time. 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: petfood@pfac.com • 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. CFIA Import Updates Import Policy Framework Chapters have continued to ‘come into effect’, which just means that they are published online under the umbrella of the import policy framework in the new format. Unless otherwise men- tioned below, no changes have been made to import policies. The Import Policy Framework can be found here: Import Policy Framework Certificates changed for US imports In mid-April, the CFIA notified industry that changes were made to import conditions for pet food from the USA. To fill in the gap of heat treated but refrigerated pet food, that was before considered ‘raw’ due to the definition of processed including shelf stable, these changes were made. There are now two certificates. One for heat-treated, where the animal origin ingredients must meet certain time-temperature thresholds, depending on the ingredient. For example: • 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 This means that a finished pet food that is heat treated to 90 °C regardless of ingredient, meets the criteria. The second certificate is for raw or minimally heat-treated pet food. An 8-week transition period was given, which means that the new certificates only will be used after mid June. This also means that an import permit is no longer required for raw/minimally heat-treated pet food from the US. 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: petfood@pfac.com • 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. CFIA Export Updates BSE Status CFIA submitted their application to the OIE to gain negligible risk status in May 2020. Since then, we have received notification that the OIE scientific commission has recommended to the OIE delegates that Canada’s application fulfills the necessary requirements. The OIE will officially vote on the application at the end of May. This means that once the status is changed, PFAC can work with the CFIA to identify and make changes to export certificates in those countries that don’t currently accept Canadian bovine materials. This process may take some time, as many countries don’t automatically accept OIE decisions, and will want to perform their own assessment, but it is a step closer to opening up export markets to a greater number of pet food skus. We heard from CFIA at Dialogue on their plan, and PFAC will work closely with them to ensure that they continue to work at making the necessary changes to export markets. It is also import- ant to note that CFIA understands that the first priority will be the US, and making the changes to both import and export requirements that will allow the use of Canadian beef products in Canadian pet food. This should allow members to grow the number of diets that can be more easily exported around the world, once all the changes have taken place. We have to ensure patience throughout this process, because many countries could take quite a while to re-open certificates and make changes, and in doing so, could also want to make their own changes. We will closely monitor this as things progress. Russia As you are well aware by now, there were three Canadian companies temporarily suspended by Russia for export due to alleged GMO non-compliance. At this time, one of those companies is back in the market with the other two working to get back. Since the last regulatory report, the Netherlands has been fully suspended from export to Russia, as has the United States. Italy also has a company temporarily suspended. The CFIA has been working with individual companies, but it is unclear whether they have had further meetings with Russian officials. As always, if any PFAC member has issues or questions related to Russia, please let me know. continued on page 9 8 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: petfood@pfac.com • 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. PFAC is currently preparing to launch a government relations campaign that will target elected officials from all parties, with a focus on relevant Ministers, the shadow cabinet and relevant critics, as well as MPs that represent ridings in which PFAC member companies reside. This campaign will initially focus on an introduction of PFAC, its role, and some key statistics of the pet food industry in Canada and its economic contribution and impact. Hopefully at the same time as this is happening, our new and updated website will launch. This will be a refreshed look and feel, with more relevant information for government and consumers, with the main goal of being a place where people can find answers to their questions. The mem- bers only section of the website will be launched shortly after the front facing pages, and will be much better organized and easier to navigate, with more information shared for members. China Although exports to China have increased significantly in the past two years, this is only due to companies with existing approval to export. There have been no new facility approvals for Canadian facilities in quite some time, although several have been waiting to hear and in the final steps of approval when it was frozen. It is highly likely that the political tensions arising from Canada’s extradition case and China’s imprisonment of Canadian’s is causing a lack of movement, even though the Chinese market is obviously very interested in Canadian pet food. Several members have heard from their importers/distributors that with the right approach, Chinese authorities would begin to approve facilities once again, but the CFIA and senior manage- ment of the International Branch do not feel this is true, and have had no communication from China. Some members have also raised that fact that US companies have been receiving approvals at a high rate, which is true, and due to this being part of the US-China trade agreement. Remember that this agreement came about when Trump was in office, and a mini-trade war led to China agreeing to this. It is simply not possible for Canada to ‘bully’ China into anything, we just do not have the level of exports and economy to do the same as the US. For now, we will have to wait to see how things play out, and continue to monitor for updates. Government and Stakeholder Relations continued from page 8 continued on page 10 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: petfood@pfac.com • 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. World Markets - Trade UK As you know, Canada has entered a continuity agreement with the UK that went into force April 1, 2021. This preserves preferential market access for both country’s businesses. At the same time, Canada is consulting with industry to identify key areas of concern for its negotiations for a formal trade agreement with the UK. This process will take a while, but in the meantime, the UK maintains the provisions of CETA within the continuity agreement. The UK has asked to join the CPTPP trade agreement, and Canada will engage the UK on this as well. Indonesia Canada is currently working on a comprehensive economic partnership agreement with Indonesia. Public consultations were launched in January 2021. This agreement is strategic in that it could help Canada’s cause in reaching a free trade agreement with the ASEAN bloc. MERCOSUR Canada is still undergoing sessions, holding several on SPS, tariffs, rules of origin, and have formed a sub-committee on agriculture and export competition provisions. India Canada has been engaged in discussions for an economic partnership, which has seen some diffi- cult discussions. In 2020, India showed some interest in returning to the table to explore a free trade agreement. While India has proposed to re-engage with Canada, they have engaged with the EU and Australia. Canada has set some technical discussions with India, and will re-consult industry stakeholders on these discussions. Later in the fall after parliament comes back from its recess, we plan to launch the second phase of the campaign, with a targeted approach reaching specific ministers to talk about some key chal- lenges and seek meetings. Another objectives for PFAC this year is to continue to develop and grow our allied association partners. We will look to grow relationships with other industry associations that have similar goals for trade, export, and manufacturing. continued from page 9 10 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: petfood@pfac.com • 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. 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. Key objectives for GAPFA 2021: • OIE Pet food standard development • Sharing of non-tariff trade barriers by GAPFA members • GAPFA Factsheet on protein, carbohydrates, fat • Guidance development for complete & balanced until the end of shelf life • Review of research on inorganic phosphorous • Partnership with WSAVA and HABRI • Creating a list of experts from GAPFA members on various testing protocols Upcoming Events May 12, 2021 Dialogue Meeting - Virtual November 3-4, 2021 PFAC Annual Conference Fairmont Chateau Frontenac Quebec City, Quebec We will evaluate the possibility of in-person event in June and again in September 2021 Market Intelligence webinars List of those coming, dates to follow. 11