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Feed Regulatory Modernization – Pre Canada Gazette, Part I Publication Consultation

This document was part of a consultation on proposed regulatory framework for livestock feeds, which ran from September 30, 2020 to November 15, 2020. This consultation is now closed.

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Introduction

The Canadian Food Inspection Agency (CFIA) invites all interested parties to provide feedback on the proposed changes to the Feeds Regulations. in advance of publication in Canada Gazette, Part I (CGI), and the potential economic impacts of these changes. Previous consultations on the overall proposal occurred in 2016, with additional consultation on proposed technical standards following that. CFIA would like to ensure the proposed regulatory approach remains an important priority for the Canadian feed and livestock industry.

Objectives

This consultation has 2 objectives:

Background

The last comprehensive review of the Feeds Regulations took place in 1983. These current Regulations focus on products (for example, registration, standards and labelling) with few or no requirements that apply to processes (for example, manufacturing standards and record keeping). Regulatory changes are needed to keep pace with changes in innovation, risk management, international standards, science and technology.

Feed and livestock production sectors in Canada and abroad have evolved considerably since 1983, operating in an environment influenced by several changing factors such as: nutritional advancements, feed manufacturing and distribution changes, innovation in feed manufacturing technologies, emergence of new pathogens and disease agents, heightened consumer awareness of food safety, climate change, and increased globalization of trade.

Amendments to the Feeds Regulations are required to establish a feed framework that includes hazard analysis, preventive controls, traceability, increased record-keeping requirements, and licencing. These changes will better align with international regulatory frameworks and best practices. This will enable CFIA and regulated sectors to better understand and manage risks that livestock feeds pose to animal health, human health and the environment, and will support proactive practices for managing those risks.

The ultimate objective is to develop a modernized risk- and outcome-based regulatory framework for feeds that:

Incorporated by reference

The proposed Feeds Regulations include a number of documents incorporated by reference. Incorporation by reference (IbR) is a drafting technique that introduces the content of a document into a regulation without having to reproduce the document's text in the regulation. If a document is incorporated by reference, the incorporated wording has the same effect as if it appeared in the regulations.

Most of the safety and compositional standards have been placed into IbR documents, and therefore no longer appear as content within these Regulations. One of the benefits of using this technique is that the information in the IbR documents can be updated in a more timely manner than if they were in these Regulations. All IbR documents will be available for comments at the time of publication in Canada Gazette, Part I. Additional information about how IbR documents will be updated will also be made available at the time of Canada Gazette, Part I publication.

The following 9 documents are proposed to be incorporated by reference into the proposed Feeds Regulations:

Key regulatory requirements

The following sections provide highlights on key regulatory requirements proposed in the new Feeds Regulations.

Scope of livestock species

Under the proposed Feeds Regulations, the list of livestock species whose feed is regulated will be expanded to include additional livestock that are considered food-producing animals. Currently the definition of livestock includes cattle, pigs, horses, sheep, goats, chickens, turkeys, ducks, geese, rabbits, fish, mink and foxes.

The following species will be added: ratites (for example, ostriches, emus), game birds (pigeons, pheasants, partridges, quail, grouse, guinea fowl and pea fowl), bison, water buffalo, cervids (for example, deer, elk), llamas, alpacas, bees, molluscs and crustaceans.

In addition, feeds for mink and foxes will no longer be regulated under the proposed Feeds Regulations as these animals do not enter the food or feed chain.

This is an amendment from the current Feeds Regulations.

Exemptions

A small number of feeds will be excluded from the proposed Feeds Regulations. These are feeds that are not destined to enter the Canadian marketplace. This exemption is proposed for imported feeds intended for consumption only by livestock that are temporarily in Canada (for example, a horse temporarily in Canada to participate in an event), and feeds for trade shows, exhibitions, analytical testing purposes and other non-commercial purposes. In addition, the proposed Feeds Regulations contain minor changes to some of the existing exemptions in the current Feeds Regulations. These changes include expanding the exemptions for feeds containing a drug for the purpose of conducting experimental studies to include both clinical testing and experimental studies, and increasing the package size from 5 kg to 10 kg for complete feed that is packaged in small containers and used to feed livestock not intended for human consumption.

This is an amendment from the current Feeds Regulations.

General and safety standards

The proposed Feeds Regulations include changes to both the general and safety standards for feeds. The safety standards for protecting animal health, human health and the environment will remain in the proposed Feeds Regulations, but have been updated. The minimum nutrient values have been removed from the proposed Feeds Regulations recognizing the expertise of the feed industry to ensure nutritional requirements for livestock species are being met. This change will help reduce some of the regulatory burden to the feed industry. Maximum values of nutrients and maximum contaminant levels will be set out in IbR documents. Standards for mixed feeds will be amended to allow other animal health products such as veterinary biologics or veterinary health products to be added to feed in addition to approved single ingredient feeds and medicating ingredients. Definitions for certain mixed feed types have been amended to provide greater clarification. Single ingredient feeds will be described in the new Canadian Feed Ingredients Table (CFIT), which replaces Schedule IV and V, categorized by intended purpose, and will include any composition or labelling standards.

Standards for feeds, such as maximum levels for contaminants or nutrients, will apply to both feeds made and sold in Canada, and imported feeds. Feeds made in Canada for export will also need to follow those standards unless they can demonstrate that the importing country or buyer of the feed in the importing country will accept a different requirement. This will allow exported feeds to meet the requirements of the country they are destined for, while protecting Canada's reputation for safe, quality feeds and food products.

This is an amendment from the current Feeds Regulations.

Preventive control plans

A new requirement to develop, implement and maintain preventive control plans is proposed. A preventive control plan (PCP) is a written document that sets out how feed safety and other regulatory requirements (for example, labelling) will be achieved by an individual system. The proposed Feeds Regulations outline 3 components of a PCP:

The fact sheets hazard identification and analysis and preventive feed safety controls have been developed to provide stakeholders with a better understanding of this new regulatory requirement. Additional guidance and model system documents will be provided at the time of publication in Canada Gazette, Part I.

Labelling

Under the proposed Feeds Regulations, amendments will be made to the labelling requirements of feed. These changes will allow for greater flexibility, while still requiring that information on the label be truthful and not misleading.

The feed label will still be required to contain a feed name, its intended purpose, intended livestock species, name and address of the manufacturer of the feed or name and address of the registrant, identification code (or lot number), net amount, directions for use, guaranteed analysis, and health and safety statements. However, to reduce the regulatory burden on stakeholders:

To facilitate greater traceability of feeds all labels will require an identification code (or lot number). In addition, to address Official Languages Act concerns respecting health and safety information, medicated feed labels, other than veterinary prescription feeds, will need to be in both official languages, and any caution or warning statements on a mixed feed or single feed ingredient label must be in both official languages.

This is an amendment from the current Feeds Regulations.

Traceability and record-keeping requirements

Traceability is the ability to track all feeds coming into and leaving a feed establishment. Under the proposed Feeds Regulations, most feed establishments will be required to keep documents related to traceability and records related to the feeds they manufacture. These documents will need to be kept for at least 3 years.

The proposed Feeds Regulations will expand on the current requirements to keep records such as formulas, mix sheets, and veterinary prescriptions to apply to all mixed feeds that are manufactured in a feed establishment.

This is an amendment from the current Feeds Regulations.

Single ingredient feed approval and product registration

The proposed Feeds Regulations will provide a more defined and transparent assessment and approval process for single ingredient feeds. The CFIA will continue to assess single ingredient feeds to verify they are safe and effective for their intended purpose. The proposed Feeds Regulations will outline which categories of single ingredient feeds require approval and the data requirements needed to support an application for approval.

Feeds that will require approval:

Under the proposed Feeds Regulations, updates to the product registration process and the types of mixed feeds requiring registration will result in the majority of mixed feeds being exempt from registration.

Feeds that will require registration are:

Licencing

Under the proposed Feeds Regulations, many feed establishments will need a licence based on the feed-related activities they conduct. A licence will be required if a feed is sent or conveyed across provincial boundaries, is to be exported or is imported for sale. Licences are not required if feed is being made and sold within the same province.

The fact sheet licencing has been developed to provide stakeholders with a better understanding of this new regulatory requirement.

Highlights for each feed sector

Depending on the type of feed establishment and the feed-related activities being conducted, some or all of the new and updated regulatory requirements in the proposed Feeds Regulations may apply.

The CFIA has developed sector-specific fact sheets to provide clarity and to gain a better understanding of how the proposed Feeds Regulations will impact each feed sector.

There are individual fact sheets for:

Timelines

At this time, CFIA along with the Department of Justice are finalizing the proposed regulatory text which is intended for publication in Canada Gazette, Part I (CGI).

The process for turning proposed regulatory changes into a new regulation involves a couple of major steps, namely Canada Gazette, Part I (CGI) publication and Canada Gazette, Part II (CGII) publication. After consultations with affected stakeholders, new proposed regulatory text is drafted by the Department of Justice with support from CFIA Regulatory Affairs, Legal and Program staff. The proposed regulations are then published in CGI as a formal consultation period for Canadians and other interested parties to provide feedback on the regulatory proposal. These comments are then reviewed, any changes are made, and the proposed regulations are subsequently published in CGII, at which time they will become official.

Some requirements will take effect immediately upon publication in CGII while others will come into effect at a later date. This delayed coming into force will give stakeholders time to adjust to the new rules.

For the Feeds Regulations it is proposed that the following sections come into effect immediately after CGII publication: feeds exempt from the Feeds Act and Regulations; requirements for single ingredient feed approval and product registration; standards related to mixed feeds, including allowing mixed feeds to contain single ingredient feeds, medicating ingredients, and veterinary health products; and provisions to allow the export of feed that does not meet Canadian standards.

Sections with a delayed effect (12 to 18 months after CGII publication) include expanding the scope of livestock species, PCPs, complaints, recall procedures, imported feed provisions, traceability, licencing, export documents, and import of non-compliant feed.

In addition, transitional periods have been provided for some requirements to gradually move from the previous to the proposed Feeds Regulations.

Detailed information about the timelines of when specific requirements of the proposed Feeds Regulations come into effect has been summarized in the Guide to timelines for complying with the Feeds Regulations, 2021.

Cost-benefit analysis

In the regulatory context, a cost-benefit analysis (CBA) is a structured approach to identify and consider the economic, environmental and social effects of a regulatory proposal. Such analysis identifies and measures the positive and negative impacts of a regulatory proposal and any feasible alternative options so that decision-makers can determine the best course of action. For the proposed Feeds Regulations, the cost-benefit analysis considered the baseline scenario (no regulatory change), the incremental costs caused by the proposed regulatory change, and a flexible option that provides additional time for stakeholders before the changes take effect.

In cost-benefit analysis, the present value of costs and benefits are provided to demonstrate the impacts of the regulatory proposal over time. The present value of costs and benefits are based on a 10-year period, starting when the regulations are registered in CGII. To reflect inflation, all monetary values are converted to a common price base per year using Statistics Canada's Consumer Price Index.

For the proposed Feeds Regulations, the CBA estimates the total present value (PV) of the monetized costs over 10 years to be approximately $479.5 million or $68.3 million annualized. The estimated total monetized benefits would be approximately $7.7 million (PV) or $1.1 million annualized. This results in a net monetized cost (that is, costs minus benefits) of $471.8 million (PV) over 10 years or $67.2 million annualized. These are costs which would be incurred across all feed stakeholders, including commercial feed mills, single ingredient feed manufacturers, feed retail outlets and on-farm feed mills. Costs for each feed sector differ based on the impact of the regulations on that sector, sector readiness, and the number of establishments in that sector.

In addition to costs and benefits which can be monetized, there are a number of qualitative benefits which are difficult to assign a monetary value to. These qualitative benefits are still an important consideration in the overall impact of the proposed Feeds Regulations.

Quantitative costs

The costs associated with the proposed regulatory change are significant. As previously mentioned, costs are calculated as present value and based on a 10-year period, starting when the regulations are registered in CGII. To reflect inflation, all monetary values are converted to a common price base per year using Statistics Canada's Consumer Price Index. In addition, a discount rate is used. The discount rate is the rate at which future costs and benefits are converted to their present equivalents. Discounting accounts for the fact that:

The annualized value (AV) is the calculated value per year and is equivalent to the values estimated to occur in each year over the 10-year period. It does not mean that this value would actually be incurred every year as it accounts for delays in coming into force and the difference in costs for initial compliance versus ongoing compliance.

In addition, a number of assumptions needed to be made to determine the costs. These include:

Although, these factors all work together to calculate the costs, it may not reflect the actual cost for an individual feed business. The values are presented as average values so some businesses may have higher or lower actual costs.

The first step in determining the costs was to define the affected stakeholder groups. CFIA inspection data was used and provided an estimation of the number of commercial feed mills and retail outlets in Canada.

The number of single ingredient feed (SIF) manufacturers and on-farm feed mills were difficult to estimate as there is limited data. The number of SIF manufacturers was based on the number of food manufacturers in Canada estimated in the CBA for Safe Food for Canadians Regulations, and it was assumed that each food manufacturer would likely have food by-products that could be produced into a feed product.

The number of on-farm feed mills was based on 2016 census data and the estimated percentage of farms that would make medicated feeds.

Table 1. Total number of feed establishments for each affected stakeholder group
Affected stakeholder group Total number of feed establishments
Commercial feed mills 480
Single ingredient feed (SIF) manufacturers 2,619
On-farm feed mills (livestock producers) 17,123
Feed retail outlets 1,500
Total 21,722

The second step in the analysis was to estimate the costs to feed establishments of the proposed Feeds Regulations. This step measured the costs of the time required to perform administrative tasks, costs associated with developing and implementing preventive controls and preventive control plans, costs associated with traceability and record keeping, the time to review the proposed Feeds Regulations, changes to labelling requirements, administrative costs for licence applications, and the fees associated with the licence applications. A survey was sent to industry to gather feedback on the time spent on administrative tasks, and education and training for certain key regulatory changes.

Assumptions that the feed industry already has certain requirements in place were also made. It was assumed that 80% of commercial feed mills, 50% of SIF manufacturers, 85% of on-farm feed mills, and 10% of retail outlets already have some type of feed safety program in place. It was also assumed that most feed establishments (over 94% of them) would have some type of traceability system given both their current best practices and requirements for traceability under the Health of Animals Regulations.

The results of the CBA, using the above mentioned methodology and various assumptions and estimations, are summarized below in Tables 2 to 6.

The quantitative costs of the proposed Feeds Regulations are estimated to have an annualized value of $65.9 million for the feed industry (or an average cost of $3,034 per year for each feed establishment). Table 2 summarizes these costs by stakeholder group.

Table 2: Total annualized costs by affected stakeholder group
Affected stakeholder group Annualized value (AV) AV per feed establishment
Commercial feed mills $4,961,931 $10,337
Single ingredient feed (SIF) manufacturers $17,826,836 $6,807
On-farm feed mills (livestock producers) $35,774,346 $2,089
Feed retail outlets $7,341,837 $4,894
Total $65,904,950 $3,034

The majority of these quantitative costs (annualized value of approximately $61.9 million) for the feed industry are from the preventive controls (PCs) and preventive control plan (PCP) requirements. While Table 2 indicates an annualized value for the total costs, it is not expected that this will be the actual cost each year. Within the PCP costs most will come at the front end from the implementation of the PCP (see Table 3). Ongoing maintenance costs once PCPs are fully implemented are anticipated to be relatively minor.

Table 3. Quantitative costs of PC and PCP by section
PC and PCP costs Annualized value (AV) AV per feed establishment
PCP development and modification costs $5,738,224 $264
PC implementation costs $54,593,015 $2,513
PCP maintenance costs $1,573,918 $72
Total $61,905,157 $2,850

Stakeholder readiness will also play a role in determining the actual costs for an individual business. While the costs set out account for estimates of stakeholder readiness, if businesses are more prepared than anticipated the actual costs will be lower. The estimated costs per stakeholder group for the proposed PC and PCP requirements is set out in Table 4. These values were calculated using industry survey results that provided estimates on the time required for various tasks.

Table 4. Quantitative costs of PCs and PCP requirements for each affected stakeholder group
Affected stakeholder group Annualized value (AV) AV per feed establishment
Commercial feed mills $3,809,974 $7,937
Single ingredient feed (SIF) manufacturers $17,486,946 $6,677
On-farm feed mills (livestock producers) $33,573,166 $1,961
Feed retail outlets $7,035,071 $4,690
Total $61,905,157 $2,850

The annualized value per feed establishment is highest for commercial feed mills. This is because it is anticipated that commercial feed mills will have the most extensive PCP requirements of each of the stakeholder groups. This is due to the complexity of the business in many of these establishments where risks such as medications, prohibited material and feed for multiple species will need to be accounted for. These complexities were indicated in the survey. The baseline survey asked establishments if they already had a feed safety plan and for those that did also asked about the time used and costs incurred to develop a "PCP alike" plan. Then, the costing survey asked them to estimate the additional time needed and costs to modify their existing plan. The survey results are divided into categories based on the size of the business (see Table 4.1).

Table 4.1: Survey results on PCP development and modifications by feed establishment with a feed safety program
Affected stakeholder group Small business:
hours/year to develop		 Small business:
hours/year to modify		 Medium to large business: hours/year to develop Medium to large business: hours/year to modify
Commercial feed mills 308 80.75 336 41.4
Single ingredient feed (SIF) manufacturers 40 9 80 18
On-farm feed mills (livestock producers) 92.4 25.5 100.8 12
Feed retail outlets 21 5.25 42 10.5

The CFIA did not receive any survey responses on the additional time needed per year to modify the PCP from feed retail outlets. The analysis assumed that they would spend 25% of the initial development time as they only need to modify a portion of the existing plan. No workable baseline or costing data was received from on-farm feed mills. It was estimated that on-farm feed mills are likely to experience 70% less impacts compared to commercial feed mills as the scale of production by on-farm feed mills is much smaller than commercial feed mills. Only one survey result was received from small businesses so the analysis assumed that a small feed establishment would spend half of the time used for a medium to large feed establishment.

The survey also requested feedback on the time needed to implement the PCs. The baseline survey asked feed establishments with a feed safety plan about the time and labour used to implement a "PCP alike" plan. Then, the costing survey asked them to estimate the additional time and labour used to implement the plan (see Table 4.2).

Table 4.2: Survey results on PC implementation by feed establishments with a feed safety program – Small business
Affected stakeholder group Current training hours/year Additional training hours/year Current perform hours/week Current record-keeping hours/week Current record-keeping hours/week
Commercial feed mills 4 0.8 21 4 11
Single ingredient feed (SIF) manufacturers 1.2 0.7 6.5 4 3.5
On-farm feed mills (livestock producers) 1.2 0.2 6.3 1.2 3.3
Feed retail outlets 2.5 1 2.5 1 2.5
Table 4.2: Survey results on PC implementation by feed establishments with a feed safety program – Medium to large business
Affected stakeholder group Current training hours/year Additional training hours/year Current perform hours/week Current record-keeping hours/week Current record-keeping hours/week
commercial feed mills 5 1 22 5 9
single ingredient feed (SIF) manufacturers 5 2 13 8 7
on-farm feed mills (livestock producers) 1.5 0.3 6.6 1.5 2.7
feed retail outlets 5 0 2.5 1 2.5

There were insufficient survey results from feed retail outlets, so time to perform and record feed safety related activities was estimated. Due to variability in survey results, a modifier was applied to baseline hours for training to ensure that small feed establishments with a PCP would not have more training hours than feed establishments that did not have any feed safety plan in place. The 20% modifier was used for commercial feed mills and on-farm feed mills, while 62% was used for single ingredient feed manufacturers and 40% for retail outlets. The value of each modifier was obtained from the respective percentage increase in hours to implement a PCP.

These survey results were used to inform the costing calculations for the estimated costs associated with PC and PCPs. This data was the best available at the time, however the survey results may not be reflective of the whole feed industry, especially for on-farm feed mills and single ingredient feed manufacturers where very little data was obtained.

The second highest cost to industry, after PC and PCP requirement costs, was the development and implementation of traceability requirements (see Table 5).

Table 5. Quantitative costs of traceability requirements for each affected stakeholder group
Affected stakeholder group Annualized value (AV) AV per feed establishment
Commercial feed mills $328,429 $684
Single ingredient feed (SIF) manufacturers $40,832 $16
On-farm feed mills (livestock producers) $1,863,155 $109
Feed retail outlets $247,933 $165
Total $2,480,349 $114

While traceability requirements are fairly simple to implement, feed establishments will need to have a way to record basic information about the feeds they manufacture. Therefore, costs associated with traceability are largely linked to the additional time it may take to create and maintain these records. Again, survey data was used to support these calculations.

The baseline survey asked the feed establishments about the current status of their traceability record-keeping. The status was divided into 3 categories: 100% traceable, 75% traceable and 50% traceable. The status applied to both purchase and sales records. All surveyed respondents indicated that they can trace their purchase and sales records. However, traceability varied slightly among affected stakeholder groups. For example, the majority of the small commercial feed mills could trace both the purchase and sales records 100%, and only one could trace 75% of its purchase and sales records.

Table 5.1 shows the estimated time required based on the size of the business to keep purchase and sales records.

Table 5.1: Survey results on time spent to keep purchase and sales records – Small business
Commercial feed mills
(hour/year)		 Single ingredient feed (SIF) manufacturers
(hour/year)		 On-farm feed mills (livestock producers)
(hour/year)		 Feed retail outlets
(hour/year)
Time spent to keep 100% purchase records 220 32 69 200
Time spent to keep 100% sales records 110 31.5 n/a 200
Table 5.1: Survey results on time spent to keep purchase and sales records – Medium to large business
Commercial feed mills
(hour/year)		 Single ingredient feed (SIF) manufacturers
(hour/year)		 On-farm feed mills (livestock producers)
(hour/year)		 Feed retail outlets
(hour/year)
Time spent to keep 100% sales records 1693 63 n/a 400

The survey did not receive any results from medium to large feed retail outlets. As such, the analysis assumed that these establishments may spend twice as much time as small feed retail outlets to keep records due to differences in business size. The survey only received one response from a small single ingredient feed manufacturer. Therefore, it was decided to omit the result realizing that using one result may not be appropriate as a representative of all the single ingredient feed manufacturers. The analysis assumed a small single ingredient feed manufacturer would spend 50% less time than a medium to large single ingredient feed manufacturer.

The analysis did not receive any baseline and costing data from on-farm feed mills. It was estimated that on-farm feed mills are likely to experience 70% less impacts compared to commercial feed mills as the scale of the production by on-farm feed mills is much smaller than commercial feed mills.

To support the feed industry with these significant costs related to PCs, PCPs, and traceability requirements in the proposed Feeds Regulations, the CFIA will have model systems and guidance materials available to help industry adjust to these regulatory changes.

Additional costs for required labelling changes, specifically for adding lot numbers and bilingual information, were calculated.

Table 6. Quantitative costs of labelling requirements for each affected stakeholder group
Affected stakeholder group Annualized value (AV) AV per feed establishment
Commercial feed mills $789,628 $1,645
Single ingredient feed (SIF) manufacturers $34,107 $13
On-farm feed mills (livestock producers) $0 $0
Feed retail outlets $1,140 $0.76
Total $824,875 $38

These costs are estimated to be highest for commercial feed mills given the number of different feeds they manufacture. Feeds made for use on farm are not required to be labelled, and single ingredient feed manufacturers generally have a small number of products that would only require a single label update to comply.

Costs were also calculated for other components of the regulatory proposal. The total costs of reviewing the proposed Feeds Regulations is estimated to be $432,135 or $20 per year per feed establishment. The review time costs were estimated to be the same for each affected stakeholder group. The review time of the proposed Feeds Regulations is assumed to be a one-time cost for feed establishments. Over time, the cost of reviewing the proposed Feeds Regulations would decrease as establishments would become for familiar with the regulatory requirements.

The total licencing costs for feed industry can be divided between the administrative costs associated with licence applications and the licencing fees.

The total administrative cost for licence applications is estimated to be $16,031 or less than an annualized value of $1 per year per feed establishment. These costs were estimated to be about the same for each affected stakeholder group. Licence applications are intended to be done through the CFIA's electronic portal and should take very little time to complete.

The total licencing fee cost is estimated to be $246,403 or an average annualized value of $11 per year per feed establishment based on the CBA results. The actual costs for a licence is anticipated to be in line with the cost for a food licence ($250 for 2 years). However, not all feed establishments will require a licence and the estimated cost per establishment would include those establishments that would not need a licence.

It is important to note that the licencing requirements will not come into effect until at least 18 months after the proposed Feeds Regulations are published in CGII and the licence will be valid for a 2 year period.

Quantitative benefits

The quantitative benefits are estimated to have an annualized value of $152,570 for the feed industry, mostly comprised by less time and fees spent on product registration and renewing registered feeds. Most of the benefits of the proposed regulatory changes to the feed industry are low or could not be quantified. However, there are some significant qualitative benefits for the feed industry with the proposed regulatory changes including fewer feeds requiring mandatory product registration, and PC and PCP requirements, improved traceability and licencing to help the Canadian feed industry gain access to international markets.

The following are the main qualitative benefits of the proposed Feeds Regulations, which are summarized into 4 different themes.

Improved quality and safety of feed

The proposed Feeds Regulations will contribute to improved feed safety and quality. Updated standards for contaminants, the introduction of requirements for hazard analysis and preventive control plans, improved traceability, and additional tools, such as licencing, will all help feeds be safer and of better quality. This will also have a positive impact on foods of animal origin.

Currently, there are no regulatory requirements for feed establishments, feed importers, or feed exporters to have a feed safety program. As a result, the quality and safety of feeds may not be consistent among businesses. The proposed PC and PCP requirements will set a robust feed regulatory framework and provide a consistent approach across the Canadian feed industry. Current voluntary industry led feed safety management and certification programs such as FeedAssure® and On-Farm Food Safety Programs have been designed to achieve high levels of feed and food safety. The new regulatory requirements will ensure that all feeds are being made at the same base level of feed safety, while still allowing individual manufacturers or third party programs to go beyond that base level.

The immediate benefit of developing, implementing and maintaining a PCP will be the reduction of feed safety risks. As well, stakeholders will directly benefit from providing potential customers with increased confidence in their processes and feed products.

The proposed Feeds Regulations would also improve the traceability of feeds by applying international standards established by Codex Alimentarius that trace the feed forwardto the immediate customer and backwards to the immediate supplier ("One step forward, one step back"). Traceability requirements enhance consumer protection during a feed safety incident or investigation by providing more accurate information to facilitate the rapid identification of the origin and movement of a feed throughout the supply chain. As a result of the proposed traceability requirements, feed recalls and investigations would be conducted in a more efficient and effective manner which would minimize economic loss for affected feed businesses.

The changes in the labelling requirements, such as lot numbers on all feed labels and bilingual health and safety label statements, will provide additional information to the purchaser of the feed and increase the availability of information on feed labels.

Licencing requirements will identify regulated parties that trade across provincial borders or internationally and direct compliance and enforcement efforts towards higher risk licensees and processes. Enforcement tools, including licence suspension and cancellation, would also be available. This new ability would benefit industry by leveling the playing field for those who abide by the rules.

Improved regulatory flexibilities for stakeholders

In general, the new Feeds Regulations propose an outcome and risk-based approach that will allow stakeholders to opt for feasible and effective solutions of their choice to meet the regulatory requirements or standards.

The number of feeds that require registration will be reduced, and therefore the number of applications for feed registration submitted to the CFIA will be reduced. This means that industry will no longer need to register simple mixtures of approved ingredients which will allow quicker access to domestic markets as well as decreasing their administrative costs related to application fees and time spent submitting application packages. This will also result in a more manageable file workload for CFIA which may mean stakeholders having quicker access to domestic markets for the products that continue to require registration.

Flexibility for labelling is also proposed. Certain claims, nutrient guarantees, and labelling statements will be allowed without the need for mandatory product registration by the CFIA.

Outcome based requirements for feed safety mean that businesses are able to determine the best way to meet a standard and verify that it has been met. This could include final product testing, supplier agreements, processing steps that destroy pathogens, or new innovation solutions as they become available.

Enhanced reputation for Canada as a global feed safety leader

Canada has a good reputation for the quality and safety of the feeds produced. The proposed Feeds Regulations will enhance this reputation, and may allow the Canadian feed industry to better market their feed products domestically and internationally. The proposed Feeds Regulations will move from the current product-focused framework to a framework that focuses on processes and preventive approaches.

The preventive controls (PCs) and preventive control plan (PCP) requirements will bring Canada closer to internationally recognized standards related to feed safety. This may contribute to increased international confidence and market access opportunities for feeds made in Canada. In particular, the PC and PCP requirements in the proposed Feeds Regulations may allow for foreign country recognition from the United States and other key trading partners.

Licencing will contribute to better regulatory oversight and, as a result, will improve customers' confidence that feeds and processes conducted at licensed establishments are in compliance with the regulations.

Improved transparency

The proposed Feeds Regulations will help improve transparency of the feed regulatory framework through clearer regulatory requirements for single ingredient feed approval and product registration, IbR documents that will require consultation before being changed, new labelling requirements, and improved traceability requirements.

The proposed single ingredient feed approval process will present changes such as: more clarity on what is required in the application package, consulting with industry on the ingredient definitions, and sharing the details of the decision-making process regarding approvals. The list of approved ingredients will be updated regularly to ensure everyone has access to the most current list of single ingredient feeds for use in livestock feeds.

The use of IbRs will allow for timely changes on technical documents and standards, and for better consultation and engagement with industry about proposed changes. For example, having the list of approved single ingredient feeds and their descriptions in an IbR document will allow for prompt updates when new or modified ingredients are approved, while considering industry's feedback.

The list of permissible claims will provide industry with claims that can be used without registration and will give feed purchasers more information about claims they see on feed labels and any of the conditions associated with them.

Ensuring that the proposed Feeds Regulations and their related processes are transparent is a key component of this regulatory proposal.

Small Business Lens

As part of the CBA, a Small Business Lens (SBL) analysis was conducted. A small business is defined as any business that has fewer than 100 employees or between $30,000 to $5 million in annual gross revenues. In analyzing the feed industry, it was estimated that 16,798 businesses were small, representing approximately 94% of the total of businesses affected by the proposed regulations.

The SBL analysis looked at both the administrative and compliance costs and benefits. The analysis was conducted on the proposed regulatory option that considers a staggered coming into force for certain requirements to provide everyone, including small businesses, with time to make the required changes. In addition, flexibility in that a full list of ingredients would not be mandatory on each feed label, was also considered in the analysis.

The total annualized cost (administrative and compliance costs) was estimated to be $58.7 million or an average annualized cost of $3,497 per impacted small business.

Given the very high percentage of small businesses, flexibilities were built into the proposal and will apply for all businesses. There are not any additional flexibilities proposed specifically for small businesses. Guidance to help small and other businesses understand their compliance responsibilities will also be provided at the time of CGII and as regulatory requirements come into effect.

Conclusion of the cost-benefit analysis

Overall, the CBA estimated the total net quantitative cost (quantitative costs minus quantitative benefits) for feed industry to be $65.8 million annualized (or $3,026 annualized for each feed establishment). The majority of the costs for the feed industry are related to the PC and PCP requirements, in particular the implementation of the PCs. Although, the quantitative benefits for the feed industry were low compared to the quantitative costs, some of the qualitative benefits have significant improvements for the feed industry and reduce some of the regulatory burden prescribed in the current Feeds Regulations.

Next steps

CFIA is finalizing the regulatory proposal which is anticipated to be brought forward for comment through pre-publication in Canada Gazette, Part I.

This consultation will help to inform any final adjustments to the regulatory proposal or the cost-benefit analysis.

The CFIA is seeking feedback to:

Any additional feedback is also welcomed.

We strongly encourage you to provide your input and feedback, which is critically important to the success of the feed regulatory modernization initiative. Please send written comments by November 15, 2020 to:

Animal Feed Division
Canadian Food Inspection Agency
59 Camelot Drive
Ottawa, Ontario K1A 0Y9

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