Regulations Amending the Safe Food for Canadians Regulations (City of Lloydminster): SOR/2024-216

Canada Gazette, Part II, Volume 158, Number 24

Registration
SOR/2024-216 November 8, 2024

SAFE FOOD FOR CANADIANS ACT

P.C. 2024-1199 November 8, 2024

Her Excellency the Governor General in Council, on the recommendation of the Minister of Health and the Minister of Agriculture and Agri-Food, makes the annexed Regulations Amending the Safe Food for Canadians Regulations (City of Lloydminster) under paragraphs 51(1)(e) and (w) of the Safe Food for Canadians Act ^{footnote a}.

Regulations Amending the Safe Food for Canadians Regulations (City of Lloydminster)

Amendment

1 The Safe Food for Canadians Regulations ^{footnote 1} are amended by adding the following after section 23:

Exception — city of Lloydminster

23.1 (1) The prohibitions under sections 10 to 13 of the Act and the requirements of these Regulations that apply to a food commodity that is sent or conveyed from one province to another or to a person conducting a prescribed activity in respect of a food commodity that is to be sent or conveyed from one province to another do not apply if that food commodity is sent or conveyed from Alberta to the part of the city of Lloydminster that is in Saskatchewan or from Saskatchewan to the part of the city of Lloydminster that is in Alberta.

Definition of city of Lloydminster

(2) For the purpose of subsection (1), the city of Lloydminster has the meaning assigned by the definition “City” in section 2 of the The City of Lloydminster Act, S.S. 2004, c. C-11.2, as amended from time to time, or the definition “City” in section 1 of the City of Lloydminster Act, S.A. 2005, c. C-13.5, as amended from time to time.

Coming into Force

2 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

To address the unique interprovincial trade context in the city of Lloydminster, a regulatory amendment to the Safe Food for Canadians Regulations (SFCR) will result in the city of Lloydminster being treated as if it were not divided by a provincial boundary. This will align with the Lloydminster Charter, while further aligning federal oversight of food traded into or within Lloydminster with the oversight of food that remains within a province.The Regulations Amending the Safe Food for Canadians Regulations (City of Lloydminster) [the Regulations] will exempt food commodities, as well as persons or businesses in Alberta and Saskatchewan that conduct regulated activities in respect of them, from the interprovincial trade requirements of the Safe Food for Canadians Act (SFCA) and the SFCR when food is prepared and traded into or within the city of Lloydminster. The requirements of the SFCA and the SFCR that apply to all food commodities, regardless of if they are traded interprovincially, will continue to apply, as will the requirements of the Food and Drugs Act (FDA) and the Food and Drug Regulations (FDR) that apply to all food sold in Canada. The Canadian Food Inspection Agency (CFIA) will also maintain its current food oversight and enforcement role under the SFCA. The only change will be that the federal interprovincial trade requirements under the SFCA and the SFCR will no longer apply for interprovincial trade within Lloydminster. The Regulations will, in effect, place Lloydminster on the same footing as any other city in Alberta or Saskatchewan, thereby reducing the administrative burden on local businesses, while facilitating local trade, economic growth and competitiveness within the city.

Background

Federal role in interprovincial trade

The interprovincial trade of food in Canada is a federal responsibility. Food is permitted to move across a provincial-territorial border when a regulated party (i.e. a food business) complies with all federal interprovincial trade requirements of the SFCA and the SFCR. This includes the requirements to hold a Safe Food for Canadians licence (SFC licence) issued by the CFIA and maintain preventive controls, as well as other requirements related to food traceability, packaging and federal compositional standards.

The requirements of the SFCA and the SFCR are aligned with internationally recognized standards, such as the Codex Alimentarius and the Hazard Analysis and Critical Control Point (HACCP) system. These requirements, as well as the requirements that apply to all food sold in Canada (regardless of where it is traded) under the FDA and the FDR, provide a consistent approach to food safety across Canada and give confidence to consumers and international trading partners. This, in turn, enables food businesses to access domestic and foreign markets.

The CFIA is responsible for administering and enforcing the SFCA and the SFCR. The CFIA is also responsible for enforcing the FDA as it relates to food, as defined in the FDA, and for administering the provisions of the FDA that relate to food, except for the food-related provisions that concern public health, safety or nutrition. However, it is the legal responsibility of regulated parties to comply with all the regulatory requirements that apply to them. The CFIA promotes compliance by providing regulated parties with the tools, resources, guidance and services they may need to become familiar with and comply with regulatory requirements.

The CFIA verifies compliance of regulated parties by conducting activities that include inspections and surveillance. When food poses a risk to human health, the CFIA may use control actions, such as food recalls, to address any immediate risk, as well as enforcement actions, such as seize and detain orders, when regulatory requirements are not met. In instances of non-compliance with regulatory requirements, such as the interprovincial trade requirements, the CFIA has an escalatory enforcement regime. This can range from written notices and seizure or detention to administrative monetary penalties (AMPs) and, in the most severe cases, prosecution.

Provincial and territorial context

Provincial-territorial authorities have the responsibility for food produced, sold and traded within their jurisdiction. They develop and implement the legislation to govern and regulate food establishments in their province or territory. Therefore, provincial-territorial authorities are responsible for regulatory oversight for intraprovincial trade (i.e. food traded within a province or territory).

Provincial-territorial authorities are also responsible for inspection programs at food processing facilities that manufacture food for the intraprovincial market, service establishments, retailers, hospitals, etc., and for enforcing the applicable legislation. Provincial-territorial authorities are responsible for conducting enteric (i.e. intestinal) illness surveillance, investigating and controlling human illness outbreaks that occur within provincial-territorial boundaries.

Alberta and Saskatchewan have their respective legislation regarding food safety and provide food regulatory oversight in their respective provinces, with the exception of Lloydminster, where the inspection and oversight of food are generally managed by Saskatchewan, even on the Alberta side of the city. For example, Alberta and Saskatchewan issue licences and permits to specific food establishments if they meet certain food safety requirements and carry out inspections in their provinces. They also have compliance and enforcement tools at their disposal in the event of a food safety incident or infraction in their respective provinces. For example, a Saskatchewan public health inspector can attach conditions to licences, issue probationary licences, suspend or cancel licences, conduct formal hearings, lay charges, and/or issue orders to businesses in Saskatchewan and to businesses in the city of Lloydminster. Many of these enforcement decisions or orders can be reviewed or appealed. A facility in Lloydminster, whether on the Alberta or Saskatchewan side of the city, could be closed by the Saskatchewan Health Authority if it is found in infraction with Saskatchewan regulations.

Addressing interprovincial trade

To support its agenda to facilitate economic growth and competitiveness, the Government of Canada is engaging with provinces, territories and industry to address issues related to interprovincial trade in Canada. This includes the Minister of Intergovernmental Affairs’ mandate letter commitment to “accelerate the removal of internal trade barriers.”

Since 2019, the CFIA has heard on several occasions from Lloydminster food businesses, industry groups, and the provinces of Alberta and Saskatchewan that the federal interprovincial trade provisions of the SFCR create additional requirements for businesses in Lloydminster, particularly for small businesses, which hinder local trade, economic growth and competitiveness.

In November 2021 and July 2022, federal-provincial-territorial Ministers of Agriculture agreed to work together to address the unique interprovincial trade context of Lloydminster. As a result of this commitment, on January 19, 2023, with support from the CFIA, the provincial governments of Alberta and Saskatchewan launched the Lloydminster Food Trade Pilot (the “pilot project”). The pilot project is administered by the Lloydminster Chamber of Commerce, on behalf of the governments of Alberta and Saskatchewan, and is an interim measure to ease the challenges faced by food businesses in both provinces for trade into Lloydminster until the Regulations address the challenges on a long-term basis. Provincially licensed food businesses in Alberta and Saskatchewan participating in the pilot project are trading across provincial boundaries within the Lloydminster city limits, including the part of Lloydminster that is not within their province. The goal of the pilot project is for safe food to move into and within the city as if there was no provincial border. The pilot project will end when the Regulations come into force.

At the federal-provincial-territorial ministers of Agriculture meetings of July 2023 and 2024, provincial and territorial ministers expressed their continued support and appreciation for the pilot project and the Regulations.

While the pilot project was underway, the CFIA continued to maintain its risk-based inspection and enforcement approach to food safety. The Saskatchewan Health Authority, which provides food inspection oversight within all of Lloydminster, continued to carry out its responsibility under the Public Health Act of Saskatchewan.

There have been several positive reports associated with the pilot that further reinforce the benefits of addressing the unique challenges in Lloydminster through regulatory changes. First, the Lloydminster Chamber of Commerce conducted a survey with the businesses participating in the pilot project approximately six months after their enrollment. The survey results demonstrate an increase in sales for participating businesses and an expansion in product variety available to consumers, while maintaining food safety standards. Second, to date, the CFIA has not received any notification of a food safety incident or complaints associated with the pilot project, and there have been no food product recalls associated with the pilot project. This demonstrates that there has been no change in the prevalence of food safety incidents in Lloydminster as a result of the pilot project.

Governance of the city of Lloydminster

To allow Lloydminster to operate as one city and alleviate duplicative provincial administration, Alberta and Saskatchewan established the Lloydminster Charter in 1958, which provides the legal framework for the operation of the city. The Lloydminster Charter is codified in legislation in both provinces, and any amendments to it must be approved by both provinces through separate Orders in Council.

With respect to safeguarding food at the provincial level, the Charter provides the authority for the Saskatchewan Health Authority to carry out all food inspection and regulatory oversight activities in Lloydminster, including at businesses situated in the Alberta side of Lloydminster. Alberta food businesses in Lloydminster are subject only to Saskatchewan’s food safety regulations. Therefore, for the purposes of provincial oversight of food safety, Lloydminster functions like a city situated entirely within the province of Saskatchewan.

International context

In order for a person or business to import a food commodity into Canada or prepare a food commodity for export, they must comply with the requirements of the SFCA and the SFCR (e.g. hold an SFC licence).

As the Regulations will be specific to Lloydminster, they will not impact international or interprovincial trade outside of Lloydminster. Under the Regulations, there will be no changes to the requirements for a food commodity being imported or exported. Persons and businesses who import, export, or prepare a food commodity for export or interprovincial trade outside of Lloydminster, will still be subject to all the applicable requirements of the SFCA and the SFCR.

Objective

The objective of the Regulations is to allow Alberta and Saskatchewan businesses to prepare and trade food into or within Lloydminster as if the city was not split by a provincial border. This will place Lloydminster on the same footing as any other city in Alberta or Saskatchewan.

Description

The Regulations will exempt food commodities that will be sent or conveyed to or within Lloydminster, as well as persons or businesses in Alberta and Saskatchewan who conduct regulated activities in respect of those food commodities, from the application of the interprovincial trade requirements of the SFCA and the SFCR. This means that businesses in Alberta and Saskatchewan will be able to prepare, send or convey, and sell food commodities within Lloydminster, including the part of the city that is not within their province, without being subject to interprovincial trade requirements in the SFCA and the SFCR.

Changes to federal requirements

SFCA

There will be no legislative changes to the SFCA. However, with the coming into force of the Regulations, certain interprovincial trade prohibitions, as set out in the SFCA, will no longer apply. In particular, the prohibitions provided under sections 10 to 13 of the SFCA will not apply to persons or businesses in Alberta and Saskatchewan that send or convey food commodities into or within Lloydminster.

SFCR

Under the Regulations, certain interprovincial trade requirements under the SFCR will no longer apply. Specifically, the following elements in the SFCR will not apply to food commodities and to Alberta and Saskatchewan persons or businesses who conduct regulated activities in respect of those food commodities for trade into or within the city of Lloydminster:

• Licensing: Alberta and Saskatchewan persons or businesses will no longer be required to have an SFC licence to conduct prescribed activities for interprovincial trade into or within Lloydminster (i.e. manufacturing, processing, treating, preserving, grading, packaging, and labelling of food, and slaughtering of animals for food) in respect of food commodities (i.e. food and food animals). This means businesses will not have to obtain and renew an SFC licence every two years and pay the associated fees (as of March 31, 2024, the fee for an SFC licence is $287.22^{footnote 3}).

In addition, Alberta and Saskatchewan persons or businesses who send, convey or sell food commodities into or within Lloydminster will no longer be required to source the food from an SFC licence holder in Alberta and Saskatchewan.

• Preventive controls: The applicable Alberta and Saskatchewan persons or businesses will not be required to implement federal preventive controls requirements.
• Preventive control plans: The applicable Alberta and Saskatchewan persons or businesses will not be required to prepare, keep, implement and maintain a preventive control plan (PCP), which is a written document that outlines how risks to food and food animals are identified and controlled.
• Traceability requirements related to interprovincial trade: The applicable Alberta and Saskatchewan persons or businesses will not be required to meet the traceability requirements that apply to interprovincial trade, such as documentation and labelling requirements, except at retail.
• Packaging requirements: The applicable Alberta and Saskatchewan persons or businesses will not be subject to interprovincial trade requirements for packaging.
• Commodity-specific requirements related to interprovincial trade: The applicable Alberta and Saskatchewan persons or businesses will not be subject to the commodity-specific requirements that apply to food commodities traded interprovincially, such as dairy products, eggs, processed egg products, fish, fresh fruits or vegetables, and meat products and food animals.

Federal requirements that will continue to apply

The federal requirements and prohibitions under the SFCA and the FDA that apply to all food sold in Canada, regardless of the type of trade, will continue to apply to Alberta and Saskatchewan food commodities and to persons or businesses who prepare them for trade into and within Lloydminster.

Interprovincial trade outside the city of Lloydminster: There will be no changes or exemptions for interprovincial trade outside the city of Lloydminster. Persons or businesses in Alberta and Saskatchewan preparing food for interprovincial trade outside the city of Lloydminster will continue to be subject to all applicable interprovincial trade prohibitions of the SFCA and the related requirements of the SFCR.

Exporting/Importing food: There will be no changes to export and import requirements provided under the SFCA and the SFCR.

Provincial requirements that will continue to apply

All applicable provincial requirements will continue to apply. Persons and businesses in Lloydminster, under the authority of the Lloydminster Charter, will continue to be subject to Saskatchewan’s provincial food safety requirements. Alberta and Saskatchewan persons and businesses outside of Lloydminster will continue to be subject to their respective provincial food safety requirements.

Regulatory development

Consultation

The CFIA engaged with various stakeholders on the challenges facing Alberta and Saskatchewan businesses in Lloydminster, and on the proposal to exempt Alberta and Saskatchewan persons or businesses from meeting the interprovincial trade requirements of the SFCR, in order to prepare and sell food into or within the city of Lloydminster, including

• Alberta’s Ministry of Agriculture and Irrigation
• Saskatchewan’s Ministry of Agriculture
• City of Lloydminster
• Lloydminster’s Chamber of Commerce
• Canadian Meat Council (CMC)
• Canadian Poultry & Egg Processors (CPEP)
• Canadian Supply Chain Food Safety Coalition (CSCFSC)
• Canadian Cattle Association
• Canadian Association of Importers and Exporters (I.E. Canada)
• Canadian Sheep Federation
• Retail Council of Canada
• Food businesses in the Lloydminster area

Consultations with Alberta, Saskatchewan and the City of Lloydminster

Since the winter of 2021, the CFIA has worked collaboratively and held various meetings with Alberta’s Ministry of Agriculture and Irrigation and Saskatchewan’s Ministry of Agriculture, as well as with the city of Lloydminster and the Lloydminster Chamber of Commerce, all of which are supportive of removing interprovincial trade requirements for persons and businesses in Alberta and Saskatchewan who prepare and trade food to and within the city of Lloydminster.

Engagement with Lloydminster Chamber of Commerce and Lloydminster food businesses

Since the winter of 2021, the Lloydminster Chamber of Commerce has also collaborated with the CFIA and the governments of Alberta and Saskatchewan on the development of the pilot project and has provided support for a regulatory amendment to the SFCR.

Prior to the CFIA’s commitment to seek an amendment to the SFCR, the Lloydminster Chamber of Commerce hosted a virtual information session on the SFCR in May 2022, where the CFIA explained the SFCR requirements to participants. At this event, the CFIA heard views from approximately 30 food businesses in Lloydminster. Many of these businesses expressed their frustration with the current regulatory requirements and stated that they only wish to gain access to the other side of the city. These businesses requested that the CFIA create an exemption for Lloydminster.

The Lloydminster Chamber of Commerce also conducted a survey for food businesses that prepare food for farmers’ markets, retail operators, processors and those that conduct online sales. In total, 23 businesses responded to the survey. The survey demonstrated that a wide variety of food businesses in Lloydminster and the surrounding area felt that the interprovincial trade requirements in the SFCA and the SFCR were treating businesses in Lloydminster unfairly in comparison to businesses in other cities.

On January 26, 2023, the CFIA participated in an in-person event hosted by the Lloydminster Chamber of Commerce. The event was attended by approximately 30 food businesses in the Lloydminster area. During this event, the CFIA highlighted the Notice of Intent (NOI) and its commitment to a regulatory amendment as a long-term solution to the challenges facing Lloydminster. The CFIA answered numerous questions about the federal legislation and its application in Lloydminster. While there were questions related to understanding why federal oversight of interprovincial trade is required, there were no questions or comments related to the Regulations themselves, as they were strongly supported. It was also recognized that the Regulations will have a positive impact on the city and would be a success story in the history of Lloydminster.

Notice of Intent: Amendments to the SFCR

On January 16, 2023, the CFIA published a NOI to amend the SFCR to address the unique interprovincial context of the city of Lloydminster. The NOI indicated that the amendment would not subject Alberta and Saskatchewan businesses to the specific provisions of the SFCR relating to interprovincial trade, as long as the trade outside the province is limited to the city of Lloydminster.

The NOI provided an opportunity for stakeholders to comment on the CFIA’s intention to amend the SFCR. Stakeholders were advised of the posting of the NOI through an email to national associations. The CFIA also distributed messages through its email subscription service.

Following the release of the NOI, the CFIA received very few questions from stakeholders. Questions received pertained to whether other cities near provincial borders would be included in the amendment and whether the amendment would apply to bakery foods. The CFIA addressed all questions and confirmed that the amendment would be confined to Lloydminster and would apply to bakery foods.

In May 2023, the CFIA sent a reminder to stakeholders inviting any further feedback on the NOI. The CFIA received a response indicating that the intent of the amendment to the SFCR was understood, and no objections were raised.

Industry stakeholder consultations

Since early 2022, the CFIA has met with a number of national industry associations to discuss the unique situation of Lloydminster and the approach to address interprovincial trade concerns. For example, the CFIA met with the CMC in February 2022 and the CSCFSC in May 2022. The CFIA also met with the CMC, the CSCFSC, the Canadian Cattle Association, I.E. Canada, the Canadian Sheep Federation and the Retail Council of Canada in July 2022. In addition, the CFIA presented an update on the NOI to the CMC Technical Advisory Group on June 5, 2023, and to the Canadian Poultry & Egg Processors during a technical meeting on June 15, 2023.

While these industry stakeholders applauded efforts to find solutions for Lloydminster and for taking on the challenges of interprovincial trade, they were also supportive of the narrow scope of the proposed amendment to the SFCR, which would not jeopardize international trade.

Canada Gazette, Part I consultation

The Regulations were prepublished in the Canada Gazette, Part I, for a 45-day public consultation period from February 10 to March 26, 2024. During the prepublication, the CFIA received comments from a total of nine stakeholders. The comments were submitted through the Canada Gazette’s online commenting feature and by email. The comments collected through the Canada Gazette’s online commenting feature are published in the Canada Gazette, Part I, Volume 158, Number 6: Regulations Amending the Safe Food for Canadians Regulations (City of Lloydminster).

During the consultation period, the CFIA received comments from provincial Ministries of Agriculture, a provincial industry association and private individuals. The comments broadly demonstrated continued support and appreciation for the Regulations and encouraged the Government of Canada to continue to work with stakeholders to address other issues related to interprovincial trade. They also noted that the Regulations will empower local businesses, foster competitiveness and drive economic growth.

This position was supported by the results of a survey that the Chamber of Commerce conducted with the businesses participating in the pilot project. The survey results demonstrated an increase in sales and an expansion in product variety, while maintaining food safety.

The Government of Canada is currently working closely with provinces, territories and the industry to find ways to address other internal trade barriers.

Stakeholder feedback and issues raised during early engagement

While stakeholders are supportive of the Regulations, this section provides an overview of the key stakeholder issues and questions raised during early engagement, as well as the CFIA’s responses.

Issue 1

Concerns were raised about why food cannot be traded across provincial boundaries when provincial food is safe to eat.

CFIA response

It is possible to move food across a provincial border if food businesses comply with federal requirements and hold a federal licence (i.e. an SFC licence). Interprovincial trade of foods in Canada is a federal responsibility, while trade and commerce of food produced within a province is primarily a provincial responsibility. This is all part of the constitutional division of powers in Canada.

The federal requirements are based on international standards. They provide a consistent approach to food safety oversight across Canada that gives confidence to consumers and international trading partners and enables Canadian producers to access domestic and foreign markets.

Provinces and territories, under their responsibilities for local commerce, can have different inspection requirements for foods sold within their jurisdictions.

All food sold in Canada, regardless of where it is traded, must comply with the applicable provisions of the FDA and the FDR, as well as the relevant parts of the SFCA and the SFCR. These regulatory requirements ensure that all food sold in Canada is safe to eat and maintain consistency in labelling and food representation.

Issue 2

Questions were raised regarding why Canada has both federal and provincial food safety oversight regimes, rather than one national standard.

CFIA response

Currently, there is only one national food safety oversight regime in Canada, which the CFIA is responsible for administering and enforcing. The CFIA administers and enforces the SFCA and the SFCR. The CFIA is also responsible for the enforcement of the FDA, as it relates to food, as defined in the FDA, and for the administration of the provisions of the FDA as they relate to food, except for those provisions that relate to public health, safety and nutrition. The SFCA and the SFCR are trade-based, focusing on the requirements for cross-border food trade, both provincial-territorial and international. The FDA and the FDR state the requirements for labelling, packaging, treating, processing, selling or advertising of all food in Canada, as well as standards for food traded interprovincially.

The provincial-territorial authorities assume responsibility for food produced, sold and traded within their jurisdiction (i.e. intraprovincial trade) and therefore have legislation to govern and regulate food establishments in their province that are not federally licensed. Provincial legislation is not applicable to food that is traded across provincial boundaries; therefore, provincial-territorial food safety regimes are not national.

Issue 3

Questions were raised regarding whether the Regulations would apply to other cities near provincial borders.

CFIA response

The Regulations are limited to the city of Lloydminster because it is a unique city situated in two provinces but operates as one city under the Lloydminster Charter, a unique and well-established legal framework in place between Alberta and Saskatchewan.

Other cities in Canada that are located near, but do not cross provincial borders, such as Ottawa and Gatineau, are different than Lloydminster because they are two separate cities overseen by two separate provincial bodies that manage food safety for their respective province. Each of these cities is located entirely in one single province. Therefore, food businesses in either Ottawa or Gatineau, for example, can conduct local trade throughout their entire city without having to comply with federal interprovincial trade requirements. Food businesses in these cities are only required to meet the interprovincial trade requirements when preparing and selling food to a neighbouring province. This is unlike Lloydminster, where food businesses must meet the interprovincial trade requirements in order to prepare and sell food within their own city due to the city being situated in two provinces.

Issue 4

Questions were raised regarding how the CFIA will ensure that food will not be traded outside of Lloydminster without an SFC licence.

CFIA response

The CFIA, in collaboration with provincial partners, will verify that food safety is maintained. The CFIA will continue its current risk-based approach to the enforcement of provisions of the FDA and the SFCA that continue to apply in Lloydminster.

The Saskatchewan Health Authority, which provides food inspection oversight within all of Lloydminster, will continue to carry out its responsibility under the Public Health Act of Saskatchewan. Alberta and Saskatchewan food businesses preparing food for export or interprovincial trade outside the city of Lloydminster will continue to be subject to all SFCR requirements, including licensing.

When the Regulations come into force, the CFIA will continue its oversight and risk-based inspection of intraprovincial, interprovincial (outside of Lloydminster) and international trade. For example, the CFIA will use and apply its existing authorities and procedures to take enforcement action in instances where food is traded in contravention of the SFCA and the SFCR.

The Saskatchewan Health Authority will continue its provincial oversight of food businesses on both the Alberta and Saskatchewan sides of Lloydminster, as per the Lloydminster Charter.

Modern treaty obligations and Indigenous engagement and consultation

The assessment of modern treaty implications examined the geographical scope and subject matter of the initiative in relation to modern treaties in effect and did not identify any applicable modern treaty. The Regulations will amend the SFCR to facilitate interprovincial food trade within the city of Lloydminster, and there are no modern treaty partners within Lloydminster. Pursuant to the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, as no implications were identified, a detailed assessment is not required. There may be interest by modern treaty partners to consider the facilitation of food trade across interprovincial or interterritorial borders in the future; however, no modern treaty partners that cross interprovincial or interterritorial borders.

As part of broader Government of Canada priorities and obligations, in alignment with the spirit of the United Nations Declaration on the Rights of Indigenous Peoples Act, this assessment considered Indigenous communities that may not have a treaty with the Crown or a historical treaty with the Crown, in addition to modern treaties.

Indigenous peoples are not directly impacted by the Regulations that will facilitate food trade within the city of Lloydminster. However, it is important to note that traditional territories of Indigenous communities were not defined or necessarily aligned with interprovincial borders. Trade of goods, including traditional and country foods, is likely to have taken place prior to the imposition of the interprovincial borders over traditional territories.

Historical treaties (i.e. pre-1975) were signed with communities in relatively close proximity to one another with shared interests. It is important to note that the following historical treaties all cross the Alberta and Saskatchewan border: Treaty No. 4, Treaty No. 6, Treaty No. 8, and Treaty No. 10. Treaty signatories generally have facilitated access to Crown lands and resources within the treaty territories, regardless of the province or territory.

Although there are no tribal councils that link communities that cross the Alberta-Saskatchewan border, there are Indigenous communities on either side that are likely to have historically traded with one another. Of particular note is the Onion Lake Cree Nation (located less than 50 km from Lloydminster), where reserve lands are located on both sides of the Alberta-Saskatchewan border, as well as the Indigenous communities of Thunderchild First Nation and Cold Lake First Nation, where reserve lands touch the Alberta-Saskatchewan border. Following the initiation of the public NOI process, the CFIA specifically reached out to Onion Lake Cree Nation to inform it of the Regulations, and to gauge interest to discuss further. As of August 2024, no feedback has been received. No food businesses are known to trade out of Onion Lake Cree Nation at this time. The CFIA remains open to further discussion regarding interprovincial food trade with Onion Lake Cree Nation should there be interest.

The Regulations may also be of interest to Indigenous communities in other geographic areas and regions that may be seeking ways to facilitate food trade, particularly of traditional or country foods within traditional Indigenous territories that are intersected by interprovincial or interterritorial borders. In this context, it should be noted that the United Nations Declaration on the Rights of Indigenous Peoples Act Action Plan, released in June 2023, includes the following action plan measure [Chapter 1: Action Plan Measure 87]:

• Support Indigenous peoples’ food security, sovereignty and sustainability through
  • funding and other program measures;
  • promoting food-focused research to better understand the intersection of Indigenous peoples’ food security, sovereignty and sustainability; and
  • promoting trade in Indigenous peoples’ food products and removal of barriers to that trade.

The CFIA will seek to work with Agriculture and Agri-Food Canada (AAFC) as the lead on this Action Plan Measure to consult and cooperate with Indigenous peoples and communities seeking to remove barriers to the trade of Indigenous peoples’ food products.

Instrument choice

A range of options were considered, including maintaining the status quo (no action) as well as other regulatory and non-regulatory actions.

Under the status quo, the existing federal interprovincial trade requirements and prohibitions would continue to apply in Lloydminster. However, this would not align with the Government of Canada’s efforts to address issues related to interprovincial trade nor the commitments of the federal-provincial-territorial ministers of Agriculture to work together to address the unique situation in Lloydminster.

As a first step to ease the challenges faced by food businesses in both provinces for trade into Lloydminster, the provincial governments of Alberta and Saskatchewan launched the pilot project with support from the CFIA. Under the pilot project, which is administered by the Lloydminster Chamber of Commerce, on behalf of Alberta and Saskatchewan, participating provincially licensed food businesses in Alberta and Saskatchewan are trading across provincial boundaries within the Lloydminster city limits, including the part of the city that is not within their province. The goal of the pilot project is for safe food to move into and within the city as if there was no provincial border. However, given that interprovincial trade is governed by the federal government through the SFCA and the SFCR, a long-term solution can only be accomplished by a regulatory amendment to the SFCR. Therefore, the pilot project is only an interim measure until the regulatory amendment can be made to the SFCR.

A number of regulatory approaches were considered (taking into account food safety, consumer protection, and domestic and international market access), and a clear and easily understood amendment was determined as the way forward. The Regulations will provide Alberta and Saskatchewan food businesses with a regulatory exemption from the interprovincial trade requirements in the SFCA and the SFCR, as long as trade is limited to the city of Lloydminster.

Regulatory analysis

Benefits and costs

The cost-benefit analysis assessed the potential impacts (i.e. costs and benefits) representing the differences between the baseline and regulatory scenarios. The baseline scenario describes the situation under the current federal regulatory framework. The regulatory scenario describes the future situation when the Regulations come into force.

Baseline scenario

Currently, Alberta and Saskatchewan businesses in Lloydminster have restricted market access to certain parts of the city. In the baseline scenario, to access the entire Lloydminster market, food businesses have to obtain an SFC licence, renew their licence every two years, prepare, keep and maintain a written PCP, and implement such a plan. They also have to meet other interprovincial trade requirements related to traceability, packaging requirements and commodity-specific requirements. The interprovincial trade requirements of the SFCA and the SFCR apply to persons or businesses that are licensed to prepare and sell food products in the part of Lloydminster in the other province.

The CFIA estimated the per-business average annualized costs over a 10-year period for several PCP-related activities. The values from the SFCR that were published in the Canada Gazette, Part II, in 2018, were updated to 2023 Canadian dollars using Statistics Canada’s Consumer Price Index, annual average, not seasonally adjusted. In addition, the fee for an SFC licence is $287.22. Since SFC licences must be renewed every other year, this means that there would be five licence renewals per business over a 10-year time frame, which corresponds to an annualized value of renewal cost per business of approximately $144. For illustrative purposes, the substantive costs associated with the interprovincial trade requirements of the SFCR are summarized in the following table:

Table 1: SFCR, interprovincial trade costs per business, 2023 Canadian dollars, 7% discount rate

Activity	Annualized compliance costs per business
Preventive controls and preventive control plans (PCPs)
Developing and documenting the PCP	$276
Implementing preventive controls and a PCP	$7,554
Maintaining PCPs	$466
PCP subtotal	$8,296
Licencing
Licence fee	$144

As of June 27, 2024, there are five SFC licence holders in Lloydminster, based on the Safe Food for Canadians Licence Registry. The five existing SFC licence holders in Lloydminster are assumed to continue renewing their licences and implementing and maintaining their PCPs throughout the 10-year analytical period. This assumption is further supported by the fact that these SFC licences are for the activities of importing food into Canada or engaging in interprovincial trade beyond Lloydminster. The Regulations will not impact these activities, and an SFC licence will continue to be required. Furthermore, the benefits arising from increased market access beyond Lloydminster are expected to provide a strong incentive to continue with licence renewals.

Regulatory scenario

Once the Regulations come into force, persons or businesses in Alberta and Saskatchewan that wish to prepare and sell food in the part of Lloydminster in the other province will no longer need to apply for an SFC licence and be subject to the interprovincial trade requirements and costs under the SFCA and the SFCR.

Benefits and costs

Benefits

Benefits to industry

Expanded market access to Lloydminster businesses.

The Regulations will benefit food businesses by providing access to the entire local market in Lloydminster without bearing the costs associated with the interprovincial requirements of the SFCR. It will ease the movement of food across the border within Lloydminster and expand markets within the city. In addition, it will increase the access to local food within Lloydminster. In a recent survey sent to the provinces of Alberta and Saskatchewan, it is estimated that 9 out of 10 food businesses within Lloydminster, excluding restaurants, will benefit from the Regulations. This will include food processors (including meat processors and bakeries), food distributors (such as grocery store chains with locations on both sides of Lloydminster), and individuals wanting to sell products across the border to other food facilities or at farmers markets. For example, a retailer offering agriculture products and prepared food (e.g. sandwiches) in one of the retail locations in Lloydminster on the Alberta side is currently unable to sell to retailers in Lloydminster on the Saskatchewan side (in some cases, a few metres away) because the business owner does not have an SFC licence. With the Regulations, this retailer will now be able to market their products at other retail locations across Lloydminster without an SFC licence.

As of 2021, Lloydminster, Saskatchewan, has an estimated population of 11 843, while Lloydminster, Alberta, has a population of 19 739. Businesses in Lloydminster, Alberta, will have access to thousands of potential consumers who are residing in the part of the city that is in Saskatchewan, without bearing the costs of applying for an SFC licence and meeting the interprovincial regulatory requirements. Businesses in Lloydminster, Saskatchewan, will also benefit and be able to sell products to residents of Lloydminster, Alberta, without any added costs and regulatory burden.

By making it easier to do business in both parts of Lloydminster, the Regulations will facilitate domestic trade and support the economic recovery from COVID-19. Businesses on both sides of the provincial border within the city will have access to more suppliers of food ingredients and food products used as inputs to prepare and produce their products.

Lastly, the Regulations will also create potential future benefits. The ease of doing business with reduced red tape will generate interest in establishing new food businesses in the region in the future.

Access to Lloydminster market by Alberta and Saskatchewan businesses

The Regulations will also support economic growth to businesses in the provinces of Alberta and Saskatchewan by allowing them to sell food into the entire city of Lloydminster without incurring the costs associated with interprovincial requirements of the SFCR.

Food businesses in Alberta and Saskatchewan, particularly those that are in close proximity to the city of Lloydminster, will take advantage of the opportunity of an expanded market access and increase in sales. Based on survey results from Alberta and Saskatchewan, it is estimated that up to 2% of food businesses in all of Saskatchewan will be interested in accessing the market.

Benefits to consumers in Alberta and Saskatchewan

By facilitating domestic trade within the city of Lloydminster, consumers on both sides of the provincial border will have access to more variety of food and food products. In the long term, an increase in competition among businesses may further benefit consumers.

Costs

Costs to industry

There will be no incremental cost to the industry arising from the Regulations.

Cost to consumers

There will be no incremental cost to Canadians in the form of risk. As Lloydminster will be treated like a city that is not split by a provincial border, the food safety oversight and risk that applies in any other city in Canada will apply to Lloydminster.

Costs to the CFIA

The CFIA will incur minor costs to update various guidance documents, including interpretive guidance for stakeholders and operational guidance for the CFIA inspectors. These costs are absorbed with existing resources. There will be no changes to the CFIA’s food inspection oversight as a result of the Regulations, and no additional inspection costs will be incurred.

Minor costs associated with compliance promotion activities will be incurred in the first year that the Regulations come into force.

Costs to other levels of government

The Regulations do not introduce any requirements for other levels of government to conduct new activities. Therefore, while some compliance and monitoring costs may be borne at the provincial and/or municipal levels after the Regulations come into force, these impacts are subject to the discretion of these levels of government and will not be attributable to the Regulations.

Small business lens

Analysis under the small business lens concluded that the Regulations will have a beneficial impact on small businesses, with no negative impacts. Small businesses that are impacted by the Regulations will gain the opportunity to earn additional revenue by selling their products in both parts of Lloydminster once the Regulations come into effect, and they will be able to do so without incurring the costs associated with the interprovincial trade requirements of the SFCR. Given that the Regulations will reduce the administrative burden of businesses in Alberta and Saskatchewan, further flexibility to help small businesses is not required.

One-for-one rule

The one-for-one rule applies since there will be an incremental decrease in administrative burden on businesses and is considered burden out under the rule. No regulatory titles are repealed or introduced.

The Regulations will provide administrative burden relief for Alberta and Saskatchewan food businesses that wish to prepare and sell food in the part of Lloydminster in the other province and that are not currently importing or trading food interprovincially or internationally. These businesses will not be required to bear the administrative burden costs associated with the SFCR interprovincial trade requirements, such as applying for a licence and keeping PCP records and traceability documents to move food across the provincial border within Lloydminster.

The decrease in administrative burden cost was estimated using the prescribed method as described in the Red Tape Reduction Regulations based on the following assumptions and parameters:

• Discount rate of 7%.
• Canada average cost of labour of $32.26/hour (2012 CAD, sourced from Statistics Canada, assuming a factor of 25% of wages to cover overhead costs).
• The estimated total number of stakeholders is 144. Of the 144, the CFIA estimates that 50% (or 72 businesses) will move food interprovincially within Lloydminster without being subject to the SFCR requirements, including associated administrative burden cost. The number of stakeholders was derived from a CFIA survey sent to Saskatchewan and Alberta in August 2023 and May 2024.
• The CFIA estimates that 98% of stakeholders (141 of the 144) are small businesses while 2% (3 of the 144) are medium or large businesses. The proportion of businesses by size is based on the CFIA’s Cost Benefit Analysis (CBA) of the SFCR in the Canada Gazette, Part II, published in 2018.
• The estimated administrative burden costs were sourced from the CFIA’s CBA of the SFCR in the Canada Gazette, Part II. The costs capture the review time of CFIA food safety regulations by businesses, licence applications, PCP record keeping, attestation and recall documentation, and traceability documentation.
• The total annualized administrative impact is $17,494 and the annualized administrative impact per affected business is $121.49. Table 2 presents the estimates of the administrative impacts for the one-for-one rule.

Table 2: Estimated annualized values of administrative impacts for the one-for-one rule (Canadian dollars, constant year 2012 prices, 2012 PV base year)

Total annualized administrative impact on all businesses	$17,494
Estimated number of affected businesses	144
Average annualized administrative impact per affected business	$121.49

Note: The analysis covered a 10-year time period (January 1, 2024, to January 1, 2034). The Regulations are an OUT.

Regulatory cooperation and alignment

Provinces and territories

The CFIA has been actively consulting with provinces and territories, through the federal-provincial-territorial Food Safety Committee, along with the City of Lloydminster and Chamber of Commerce, all of which support the need to address the unique interprovincial trade situation in Lloydminster. During these consultations, both Alberta and Saskatchewan advised that the primary benefit will be the reduction in administrative burden or “red tape” on those businesses that will be exempted from the interprovincial trade requirements as a result of the Regulations.

Federal-provincial-territorial ministers of Agriculture support the Regulations and confirmed their continued support at the July 2024 federal-provincial-territorial ministers of Agriculture meeting.

International trading partners

The Regulations will not impact international trade. Under the Regulations, there will be no changes to the requirements for food being exported or imported. Food businesses preparing food for export or interprovincial trade outside of Lloydminster will still be subject to all the requirements of the SFCA and the SFCR, including licensing and related requirements.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

The Regulations will directly impact Alberta and Saskatchewan food business owners, small business owners in particular, who only wish to prepare and sell food to or within the city of Lloydminster. As the scope of the Regulations is small, there is no known significant gender-based analysis plus (GBA+) impacts as a result of the Regulations. However, it is likely that the Regulations will have indirect benefits on the citizens of Lloydminster, which will likely have GBA+ implications. For example, all citizens will have access to the same foods, regardless of where they are located in the city.

Implementation, compliance and enforcement, and service standards

The Regulations come into force on the day on which they are registered.

Once the Regulations come into force, minor updates to the CFIA’s interpretive guidance document will be made and shared with CFIA field staff and stakeholders. The CFIA will also conduct promotional activities to ensure CFIA field staff and food businesses in Alberta and Saskatchewan are aware of the Regulations and their implications (e.g. distributing messages through its email subscription service and posting updates on its social media accounts).

The CFIA remains committed to maintaining food safety, not only for the citizens of Lloydminster, but for all Canadians. As such, the CFIA will maintain its current risk-based inspection oversight relating to intraprovincial, interprovincial and international trade. Provincial oversight for food businesses on both the Alberta and Saskatchewan sides of Lloydminster will continue to be carried out by the Saskatchewan Health Authority, as per the Lloydminster Charter.

In the event of a food complaint or investigation in Lloydminster, the CFIA will conduct a food safety investigation, and collaborate with the Saskatchewan Health Authority as required, consistent with the CFIA’s Standard Regulatory Response Process. In instances of non-compliance with applicable provisions of the SFCA, SFCR, FDA or FDR, the CFIA inspectors have compliance and enforcement tools at their disposal (e.g. seizure and detention orders, recalls, disposal or destruction orders, issuance of letters/notices of non-compliance, issuance of administrative monetary penalties [AMPs] and recommendation for prosecution). In instances of non-compliance with provincial requirements, the Saskatchewan Health Authority also has a number of enforcement options at their disposal (e.g. attaching conditions to licences, issuing probationary licences, suspending or cancelling licences, conducting formal hearings, laying charges, issuing orders, or closing a facility).

Contact

Natasha Richard
National Manager
Food Safety Requirements and Guidance
Canadian Food Inspection Agency
1400 Merivale Road
Ottawa, Ontario
K1A 0Y9
Email: cfia.fsrg-eldsa.acia@inspection.gc.ca