SFCR and food safety – Part II

This month I’ll continue to look at some of the benefits and costs to be expected from the introduction of the Safe Foods for Canadians Regulations (SFCR).

Benefits

1. Reduced food safety risk – The Canada Gazette Part I (CG1) states that it is “reasonable to assume” that the SFCR will reduce the yearly 11,600 hospitalizations, 238 deaths and the $2.8 billion in cost due to bad food. But CG1 stops short of quantifying any improvement. Unless mandated, a business would never undertake such a paradigm shift in operations like this without setting quantifiable goals. This needs to be addressed.

2. Increased trade opportunities – CG1 predicts that more trade opportunities will open up for our agri-food industry after SFCR is implemented. I hope so, but I believe foreign buyers will first want to see quantifiable improvements on an array of food safety and good-manufacturing measurables. The SFCR should make the move to GFSI certification a little easier, and those that get there will reap the benefits.

3. Level playing field – Replacing 13 different regulatory programs across many agri-food sectors with one regulation for all, requiring importers to ensure that imported products meet the same level of compliance that domestic producers and processors are required to meet, and licensing most of the food producers and processors in the country will, in time, prove to be one of the most significant benefits of the SFCR.

4. Improved CFIA knowledge base – The SFCR should put the Canadian Food Inspection Agency (CFIA) in a better position to monitor the entire Canadian agri-food sector. However, it is a well-known fact that the CFIA is currently suffering from a lack of experienced personnel in many sectors. It will be interesting to see what the agency will do with this data.

5. Outcome-based vs prescriptive-based approaches – An outcomes-based approach provides industry with the opportunity to come up with unique solutions provided that the outcome is equal to or compliant with established standards. This approach will benefit a business that can afford the cost of developing a novel solution. My view is that this is a huge step in the right direction and opens the door to innovation.

6. Reduced recall costs – All licensed firms will be required to have robust traceability programs in place when the SFCR comes into effect. The CG1 estimates that this will reduce the cost of a recall by 25 per cent for firms that did not have a traceability program, and 12.5 per cent for companies currently required to have a traceability program. I fail to see how businesses with an existing traceability program will reap any cost savings.

Costs

1. Industry’s costs – According to the CG1, the estimated annual costs are: $260 to develop and document a PCP; between $3,826 and $6,370 to implement a PCP; and $464 to maintain a PCP. As a result, the real cost to industry to develop, implement and manage PCPs is seriously underestimated in CG1.

2. CFIA costs – I was surprised to read that the agency “would not require any additional food safety program or inspection funding or resources from current levels” except for “promotion and industry engagement.” Where will the money come from to hire and train inspection staff? If there will be no additional funding for the CFIA, what implications will this have on the implementation of the SFCR?

3. CFIA cost recovery – The fact that the CFIA, which has thousands of agents in the field monitoring PCPs, got the costs of PCPs so terribly wrong shakes your confidence in the agency’s ability to do financial analysis. This also doesn’t fill you with confidence about the agency’s ability to develop a fair cost recovery program. Despite my concerns, I strongly believe that there is far more upside to the SFCR than downside. However, the CFIA needs to proceed slowly and carefully to ensure that Canada’s agri-food industry, as well as consumers, benefit from these regulations.

Dr. R.J. (Ron) Wasik PhD, MBA, CFS, is president of RJW Consulting Canada Ltd. Contact him at rwasik@rjwconsultingcanada.com