Page 143 - DCOM106_COMPANY_LAW

Company Law

Notes

Case Study Federal Government Responsibilities against
Food Industry

overnmental responsibility for food in Canada is divided among the federal,
10 provincial, three territorial, and thousands of municipal governments. Some
G77 pieces of legislation govern food inspection among three levels of government.
Federal responsibility centres on export and inter-provincial trade: protecting and
expanding export markets for Canadian food products, and facilitating interprovincial
trade. In addition, the federal government sets food safety, quality and grading standards
for products sold interprovincially and internationally and administers regulations aimed
at preventing the production or sale in Canada of dangerous, adulterated or misbranded
products.
Provinces and municipalities are responsible for:
The intraprovincial aspects of the food industry, including local food processing, the food
service industry, and the food retail industry.
They decide whether and how to inspect local operations, including restaurants and grocery
stores, as well as dairies and meat plants whose products are sold within the province.
(Moore and Skogstad, p. 130) The federal government of Canada faced a number of food
security problems in the early 1990s, which facilitated adoption of innovative reform
measures:
1. Canada’s reputation for high quality food had been damaged by the “tainted tuna”
scandal.

2. Resources for additional inspection of fish products were not available; resources
were not only scarce but shrinking.
3. The Government wanted to reform its public service along the lines achieved in the
United Kingdom and New Zealand, where separate agencies were spun off from
government.

4. Developments in international trade and potential developments in interprovincial
trade:
(a) Industry and governments favoured harmonized standards and streamlined
inspection to ensure the competitiveness of the Canadian food industry
domestically & internationally.
(b) Canadian producers/processors were vulnerable to trade challenges in a
fragmented system.
(c) Gaps resulting from non-inspection or non-rigorous inspection were perceived
by processors as a weak link, despite the small percentage of overall production
represented and assurances outlined in the Auditor General of Canada’s 1994
Report.

(d) Closer integration of the US and Canadian markets under free trade agreements
made the industry anxious to reduce the costs and inefficiencies resulting
from differing provincial standards e.g. fluid milk.
5. The “national treatment” principle in the North American Free Trade Agreement
could be interpreted to mean that imports must meet the provincial standard of the
Contd...

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