Flying E Ranche Ltd. v. Attorney General of Canada

CITATION: Flying E Ranche Ltd. v. Attorney General of Canada, 2022 ONSC 601

COURT FILE NO.: 05-CV0287428CP

DATE: 20220128

SUPERIOR COURT OF JUSTICE - ONTARIO

RE:

FLYING E RANCHE LTD., Plaintiff

AND:

THE ATTORNEY GENERAL OF CANADA on behalf of HER MAJESTY THE

QUEEN IN RIGHT OF CANADA as represented by THE MINISTER OF

AGRICULTURE, Defendant

BEFORE:

Paul B. Schabas J.

COUNSEL: Duncan C. Boswell, Malcolm N. Ruby, Rachel McMillan, Andrew Locatelli,

Cameron Pallett, for the Plaintiff

William Knights, Cynthia Koller, Victor Paolone, James Soldatich, Ayesha

Laldin, Stewart Phillips, Adam Gilani, John Spencer, Sheila Hepworth, Laurel

Irvine, Matthew Sullivan, for the Defendant

HEARD:

February 16-19, 22-26; March 1-5, 8-12, 22-26, 29-31; April 6, 8, 9, 19-22; May

6, 17-21, 26, 27, 31; June 2-4, 10, 14-16; August 9-13, 2021

REASONS FOR JUDGMENT

SCHABAS J.

Table of Contents

Paragraph

Part I – Introduction and summary of findings............................................................................... 1

Part II - History of the action and related proceedings ................................................................. 22

Part III - Trial procedure and presentation of evidence ................................................................ 34

Part IV - The issues....................................................................................................................... 61

Part V - The emergence of BSE and Canada’s response to it: 1986 - 1996 ................................. 64

The emergence of BSE in the United Kingdom: 1986 - 1990.............................................. 64

L’Office International des Epizooties (OIE)......................................................................... 83

The OIE and BSE: 1988 - 1990............................................................................................ 92

Canada’s cattle industry...................................................................................................... 105

Canada’s statutory framework ............................................................................................ 114

Canada’s knowledge of BSE: 1987 - 1990......................................................................... 123

Canada’s response to BSE: 1988 – 1990............................................................................ 141

Certification and permit requirements in 1988 ................................................. 141

Import Ban - 1990 ............................................................................................. 146

Monitoring Program created - 1990.................................................................. 151

Reportable disease - 1990 ................................................................................. 155

The Mirabel Cattle ............................................................................................ 158

Consultation and stakeholder meetings: 1989 - 1990......................................................... 162

The 18 June 1990 Meeting.................................................................................................. 169

Subsequent meetings and positions taken: 1990 - 1992 ..................................................... 185

USDA position: 1990 - 1991 .............................................................................................. 194

Canada’s amendment of the Feeds Regulations in 1990 .................................................... 198

Surveillance program: 1991 – 1992.................................................................................... 203

Science on BSE continues to evolve: 1991 - 1993 ............................................................. 204

OIE developments: 1991 - 1992 ......................................................................................... 213

Monitoring Program: 1991 – 1993 ..................................................................................... 221

The Jerram cow – November 1992..................................................................................... 225

The DePalme cow event – December 1993........................................................................ 229

Destruction orders following the DePalme cow event ....................................................... 233

Oxford dead stock............................................................................................................... 242

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The 1994 Federal Court proceedings.................................................................................. 243

Communication and consultations following the DePalme cow event .............................. 254

International response and contact following the DePalme cow: 1993 - 1994................... 265

OIE Developments after 1993 ............................................................................................ 280

Risk analysis and the APHRAN Reports............................................................................ 287

Knowledge of BSE transmission: 1993 - 1996................................................................... 307

WHO meetings and recommendations: 1995 - 1996.......................................................... 322

Canada’s implementation of a feed ban: 1996 – 1997........................................................ 329

Part VI - The Canadian BSE event and the closure of the border to exports: 2003 - 2007........ 336

Part VII - Canada’s response: regulatory controls...................................................................... 347

Part VIII - Canada’s response to BSE: Financial assistance programs 2003 - 2007 .................. 353

The BSE Response Team.................................................................................................... 353

Farm assistance programs – background and statutory context.......................................... 366

Generally available and standing programs........................................................................ 381

Net Income Stabilization Accounts Program (“NISA”) ................................................. 381

Canadian Agricultural Industry Support Program (“CAIS”).......................................... 386

CAIS Inventory Transition Initiative (“CITI”)............................................................... 393

AgriStability 2007........................................................................................................... 398

Cost of Production Program (“COPP”) .......................................................................... 400

AgriInvest ....................................................................................................................... 403

Kickstart.......................................................................................................................... 408

Grains and Oilseeds Program (“GOPP”) ........................................................................ 410

BSE-specific programs ....................................................................................................... 411

BSE Recovery Program .................................................................................................. 412

BSE Recovery Program Phase 1- Slaughter Element..................................................... 414

BSE Recovery Program Phase 2 – Cull Animal Program.............................................. 419

BSE Recovery Program Phase 3..................................................................................... 423

(a) Fed Cattle Set Aside Program........................................................................... 424

(b) Feeder Calf Set Aside Program......................................................................... 426

BSE Recovery Program Phase 4 – Herd Management Program .................................... 428

Transitional Industry Support Programs (“TISP”) – Direct and General....................... 429

Farm Income Payment Programs (“FIP”) - Direct and General..................................... 435

Milk Price Increase 2005-2006....................................................................................... 439

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Other federal BSE-specific programs ............................................................................. 440

Provincial programs........................................................................................................ 441

Part IX - The aftermath: CFIA investigation and the decline of BSE ........................................ 442

Part X - The independent expert evidence on BSE..................................................................... 451

Dr. Beckett’s evidence and the Australian situation........................................................... 452

Dr. Hope’s evidence............................................................................................................ 471

Conclusion on the independent BSE experts...................................................................... 486

Part XI - Common Issue # 1: Does Section 9 of the Crown Liability and

Proceedings Act apply? .............................................................................................................. 488

The pleadings...................................................................................................................... 488

The statutory framework..................................................................................................... 495

The purpose and scope of s. 9: the Sarvanis decision......................................................... 497

Vancise v. Canada .......................................................................................................... 501

North Bank Potato Farms v. CFIA ................................................................................. 504

Are the BSE-specific program payments “compensation”? ............................................... 515

Conclusion on s. 9 of the Crown Liability and Proceedings Act........................................ 541

Part XII - Common Issue #2: Were the defendants negligent and if so when and how? ........... 544

The pleadings...................................................................................................................... 544

Duty of Care: the Anns/Cooper test.................................................................................... 549

Analogous and established categories of duty of care........................................................ 555

Proximity and foreseeability............................................................................................... 568

Proximity............................................................................................................................. 572

Proximity arising from the statutory scheme.................................................................. 574

Proximity arising from interactions: the legal framework.............................................. 590

Proximity arising from interactions between the Class and Canada............................... 602

Proximity arising from both interactions and statutory duties........................................ 630

Foreseeability...................................................................................................................... 633

Policy Considerations ......................................................................................................... 644

Was the alleged negligence policy or operational?......................................................... 657

Is the failure to enact a feed ban justiciable? .................................................................. 680

Were the policy decisions irrational or made in bad faith? ............................................ 686

Is indeterminate liability a concern?............................................................................... 689

Would a duty of care conflict with public duties? .......................................................... 701

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Other policy concerns with recognizing of duty of care................................................. 705

Conclusion on Duty of Care ............................................................................................... 711

Standard of Care ................................................................................................................. 712

The legal test................................................................................................................... 713

The standard of care issues ............................................................................................. 719

Should Canada have conducted a safety assessment prior to amending the Feeds

Regulations in January 1990? ........................................................................... 720

Should Canada have taken steps to keep UK cattle out of the feed chain

beginning in February 1990?............................................................................. 727

Should Canada have implemented a feed ban in 1994?.................................... 769

Delay in enacting the 1997 Feed Ban?.............................................................. 792

Conclusion on standard of care....................................................................................... 798

Duty to warn ....................................................................................................................... 810

Causation............................................................................................................................. 817

Conclusion on negligence................................................................................................... 818

Part XIII - Common Issue #4 - can damages be determined on an aggregate basis and, if so, what

is the amount of damages?.......................................................................................................... 819

The pleadings and general principles.................................................................................. 819

The experts and their evolving positions ............................................................................ 831

Dr. Groenewegen’s March 2014 Report......................................................................... 839

Mr. Low’s August 2020 Report...................................................................................... 843

Mr. Low’s Addendum Report of October 2020.............................................................. 854

Dr. Groenewegen’s November 2020 Report ................................................................ 855

Mr. Low’s February 2021 Report................................................................................... 866

Dr. Groenewegen’s March 2021 Report......................................................................... 872

Final positions of the parties on damages and issues to be resolved .................................. 876

Pricing methodology....................................................................................................... 879

Impact of the Washington cow ....................................................................................... 888

Losses following July 2005 ............................................................................................ 899

General and aggravated damages........................................................................................ 907

Damages Offsets ................................................................................................................. 920

CITI................................................................................................................................. 927

NISA: entitlement and allocation.................................................................................... 933

iv

NISA: the collateral benefits argument........................................................................... 938

AgriInvest and Kickstart................................................................................................. 945

GOPP .............................................................................................................................. 952

Conclusion on offsets...................................................................................................... 955

Conclusions on damages......................................................................................................... 957

Part XIV - Conclusion ................................................................................................................ 958

Appendix - Glossary of acronyms and terms

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Part I – Introduction and summary of findings

In 1986 animal health experts in the United Kingdom (“UK”) identified a novel

neurological disease that was afflicting cattle in that country, Bovine Spongiform Encephalopathy

(“BSE”). The disease was invariably fatal within weeks or a few months of symptoms emerging

in animals. As with spongiform encephalopathies in other species, including scrapie in sheep and

Creutzfeld Jacob Disease (“CJD”) in humans, post-mortem examinations of affected animals

showed that brains had spongiform lesions, or sponge-like qualities. Clinical symptoms of BSE

include nervous or aggressive behaviour, lack of coordination and loss of the ability to stand up,

reduction in milk yield and loss of body weight. BSE quickly became known as “Mad Cow

Disease.”

The incidence of BSE grew quickly in the UK. By 1988, when it was formally brought to

the attention of L’Office Internationale des Epizooties (“OIE”), now known as the World Animal

Health Organization, over 2,000 cattle in the UK had been diagnosed with BSE. Although

investigation of the cause of BSE was at an early stage in 1988, it was suspected that it may have

originated from the scrapie agent in sheep and been transmitted to cattle through feedstuffs

containing ruminant-derived protein that were fed to calves beginning in about 1981 or 1982. As

a result, in 1988 the UK prohibited the inclusion of ruminant-derived protein in feed for ruminant

animals such as cattle (the “UK Feed Ban”).¹

BSE affects the central nervous system of cattle. It has a lengthy incubation period. Cattle

afflicted with BSE become symptomatic, on average, at about 5 years of age. The number of cattle

diagnosed with BSE continued to grow in the UK, peaking in 1992 when over 37,000 cases were

confirmed. Animal health experts in the UK and elsewhere conducted extensive research into the

causes of BSE and its transmissibility. By 1990 it was suspected that the rapid increase in cases

was due to the slaughtering and rendering of infected but non-syptomatic, or subclinical, cattle

whose protein was also included in feed supplements provided to calves prior to the

implementation of the UK Feed Ban in 1988. Although there was no evidence of it, horizontal and

vertical transmission of the disease was not ruled out as a mode of transmission. The impact of the

UK Feed Ban caused the number of BSE cases in the UK to decline rapidly in the later 1990s and

early 2000s, dropping to less than 1,000 cases in 2003. However, between 1986 and 2006 at least

180,000 cattle were confirmed as having died of BSE in the UK.

The European Economic Community (“EEC”) and countries around the world took steps

to prevent BSE from spreading beyond the British Isles, including banning the importation of cattle

from the UK and Ireland. The OIE created a special panel of experts and developed

recommendations for animal health authorities to follow in order to prevent the spread of the

disease.

¹Cattle, sheep, goats, deer, elk, and bison are ruminants. These animals are even-toed and hoofed, chew cud and have

four-chambered stomachs.

These efforts proved successful. Although BSE did emerge in several countries, due mostly

to infected cattle imported from the UK prior to the implementation of the UK Feed Ban, no

country had more than 1,000 confirmed cases other than Ireland and Portugal, and most that were

affected had only a handful of cases. BSE has been controlled and cases today are very rare.

This case is about BSE in Canada. Like other countries, Canada took steps to prevent BSE

from entering its cattle population. In 1989 the federal Department of Agriculture imposed

restrictions on cattle being imported from the UK, and in 1990 Canada banned all further imports

of cattle and other ruminants from the UK and the Republic of Ireland. BSE was made a reportable

disease. Canada identified that approximately 182 cattle had been imported from the UK and

Ireland during the 1980s (the “UK imports”), and placed them in a Monitoring Program. Later, in

1994, following confirmation of BSE in one of the imported cattle, Canada ordered that the

imported animals still alive and present in Canada – approximately 67 - should be returned to the

UK or be destroyed.

Unlike Britain, but like the United States, Canada did not prohibit the inclusion of ruminant

protein in feedstuffs for cattle until 1997, following a recommendation from the World Health

Organization (“WHO”) made in 1996, after BSE had been linked to a variant of CJD (“vCJD”)

that had been identified in humans in Britain.

Of the approximately 182 cattle imported into Canada between 1982 and 1990, it was

determined in 1994 that approximately 68 had been slaughtered for consumption and rendering.

Aside from the 67 still alive in Canada which were ordered destroyed, the balance had been

exported to the United States or had died and been destroyed. In 1994, only one of the UK imports

was confirmed to have developed BSE, although at least one other animal, which had been

slaughtered, had shown signs consistent with the disease. Due to the lengthy incubation period,

however, and the lack of a method to test for BSE on live animals, it is likely that some UK imports

would have been infected with BSE but not shown clinical signs of the disease before being

slaughtered in Canada prior to 1994.

When cattle and other ruminants such as sheep are slaughtered, portions of the animal not

fit for human consumption, such as the brain, spinal cord, certain organs and other elements of the

central nervous system, are sent to rendering plants where they are heated and ground into meat

and bone meal (“MBM”), which is then used in a number of products, including fertilizer and

animal feedstuffs. Consequently, prior to 1994, protein from the approximately 68 UK cattle

imported between 1982 and 1990 which had been slaughtered in Canada entered the animal feed

chain, creating a risk of transmission of BSE to Canadian cattle born prior to the ruminant-to-

ruminant feed ban implemented in Canada in 1997 (the “Feed Ban”). Although it is impossible to

know with certainty, it is believed that infected protein likely entered the feed chain from a UK

import slaughtered and rendered around 1992.

No indigenous Canadian animal was diagnosed with BSE in the 1990s. Indeed, it seemed

that Canada had been successful in its efforts to keep BSE from entering the Canadian cattle herd

following the import ban in 1990. But in May 2003, almost a decade after the last of the UK

imports was destroyed, a cow which had died earlier that year on a farm in Saskatchewan was

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found to have had BSE. It was later determined that this cow was fed a “calf-starter” feed

containing ruminant protein when it was a calf in 1997, just prior to the enactment of the Feed

Ban, and that this was the likely source of BSE in the cow.

Since the May 2003 diagnosis, a small number of other Canadian cattle have been

diagnosed with BSE. But it is the consequences of the confirmation of BSE in a Canadian cow in

May 2003 that are relevant to this action. The United States of America (“US” or “USA”), which

provided over 50% of the market for Canadian cattle and cattle products, immediately closed the

border to Canadian cattle and beef products. Many other countries followed. Although over time

the borders gradually reopened and trade resumed, the economic impact on Canadian cattle

producers and related industries was enormous, and the total cost of the trade embargo been

estimated to exceed $8 billion between 2003 and 2008.

This class action, brought on behalf of all Canadian farmers who raised cattle in May 2003

(the “Class”), alleges that the defendant (“Canada”) was negligent in keeping BSE out of Canada

by failing to implement a ruminant-to-ruminant feed ban in 1990 when it brought in the import

ban, or in 1994 when Canada ordered the destruction of the remaining UK imports. It is also

alleged that Canada was negligent in failing to adequately monitor and prevent the UK imports

from entering the feed chain between 1990 and 1994. The plaintiff seeks damages arising from

losses suffered by the Class between 2003 and 2007.

Canada denies that it can be liable in negligence as, it argues, there was not a relationship

of sufficient proximity between Canada and the Class, under statute or based on interactions

between them, which would give rise to a duty of care. Further, if there was sufficient proximity,

Canada submits that there are policy considerations that should prevent the recognition of a duty

of care in these circumstances, including that the actions complained of were policy decisions by

government. Canada also claims that its actions were reasonable and consistent with scientific

knowledge at the time and did not breach the standard of care expected of a reasonable regulator,

noting that other similarly situated countries, including the US, did not have a feed ban prior to

1997, and that at all times Canada was in compliance with, or exceeded, OIE guidelines respecting

BSE.

Canada also relies on s. 9 of the Crown Liability and Proceedings Act, R.S.C., 1985, c. C-

50 (“CLPA”). Immediately following the border closure in 2003, Canada developed programs that

provided financial assistance to cattle producers which, Canada submits, bar the action. The

plaintiff only concedes that payments under these programs should be considered to reduce the

damage claim, but submits that they do not bar the action.

I have concluded that the action should be dismissed. My Reasons for Judgment

(“Reasons”) are lengthy, following a long trial involving a great deal of detailed evidence about

BSE and Canada’s response to it. The following paragraphs provide a brief summary of my

conclusions.

First, I find that the action is barred by s. 9 of the CLPA. Between 2003 and 2007 Canada

provided financial assistance to the Class of close to $2 billion in specific BSE-related programs

3

authorized under the Farm Income Protection Act, S.C. 1991, c. 22 (“FIPA”). Canada made cash

payments to members of the Class which provided a form of compensation to them arising from

the economic losses suffered as a result of the border closure in and following May 2003, which

are the same losses for which damages are sought in this action.

Second, applying the “Anns/Cooper” test,²I find that although damage to the Class was

foreseeable by Canada (indeed, Canada was conscious of the potential harm BSE could cause), the

statutory framework and the interactions between Canada and the Class do not create a relationship

of proximity such that a duty of care should be recognized. The relevant statutes, in particular the

Animal Disease and Protection Act, R.S.C. 1985, c A-13 (“ADPA”), the Health of Animals Act,

S.C. 1990, c. 21 (“HAA”), and the Feeds Act, R.S.C., 1985, c. F-9, (“Feeds Act”), have broad

public purposes and do not create a duty of care between Canada and the cattle-producing industry.

Nor was there a “special relationship” between Canada and the Class arising from interactions

between them. At various points in the period of the relevant events in the 1990s Canada consulted,

and had close contacts with the cattle farming industry, but in doing so it was engaging in its role

as a responsible regulator acting in the public interest under its broad statutory mandate. While

many steps taken by Canada were directed at the cattle industry, those actions did not create a

special relationship with members of the Class.

Third, even if a relationship of sufficient proximity existed, there are policy reasons why a

duty of care should not be recognized in this case. The actions impugned by the plaintiff involve

policy decisions by government rather than operational negligence. The complaint that Canada

failed to enact a feed ban goes to the heart of policy-making decisions. The alleged negligence in

failing to keep UK imports out of the feed chain relates to the design of Canada’s Monitoring

Program which was not intended to keep those animals from being rendered unless they showed

clinical signs of BSE. This was a decision as to a course of action, or policy decision, not

operational negligence.

In addition, recognizing a duty of care in these circumstances would create conflict with

broader statutory obligations, and may require government to prefer one industry group over

others. Further, public statutes have provided a great deal of financial assistance to the Class. In

addition to payments totaling almost $2 billion arising from BSE-specific programs, I have found

that members of the Class received over $2-billion in additional financial support during the 2003-

2007 period under general assistance programs, all authorized by FIPA. These public law

assistance programs offset most of the losses suffered by the Class, and their existence and

availability provide an additional policy reason for a court to be reluctant to impose a private law

duty of care on government in such circumstances.

Fourth, in my view the defendant did not act unreasonably and breach the standard of care

of a reasonable regulator in the circumstances faced between 1990 and 1997, the period during

²The Anns/Cooper test is derived from the decision of the House of Lords in Anns v. Merton London Borough Council,

[1978] A.C. 728, adopted by the Supreme Court of Canada in Kamloops v. Nielsen, [1984] 2 S.C.R. 2, at pp. 10-11,

and modified in Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537.

4

which negligence is alleged. BSE was a novel disease, based almost entirely in the UK. Canada

considered the risk of BSE entering the Canadian cattle herd arising from the rendering of UK

imports and concluded that the risk was low. This was consistent with the views of the UK and

international BSE experts at the time. The OIE did not require a feed ban or isolation of the imports.

Canada and the United States had an integrated cattle industry at the time, with animals and beef

products freely crossing the border, and the United States did not impose a feed ban or take steps

to keep its UK imports out of the rendering process and animal feed either. Indeed, the United

States had difficulty even tracking its UK imports. When the WHO recommended a feed ban in

1996 Canada and the United States both took steps and enacted a feed ban on the same day in

August 1997.

Fifth, and finally, in the event that I am incorrect on liability, I have addressed damages

which were the subject of much evidence at the trial, including complex expert evidence. I have

concluded that the economic losses suffered by the Class due to the border closure in May 2003,

until the end of 2007, are $5.419 billion. However, the defendant made financial assistance

payments to the Class during this period, both under BSE-specific programs and general assistance

programs authorized under FIPA. In my view, Canada should receive credit for $4.256 billion of

such payments as offsets to the losses suffered by the Class. This results in losses to the Class of

$1.163 billion, which is the amount I would have awarded as damages to the Class had I found the

defendant liable in negligence.

Part II - History of the action and related proceedings

This action was commenced in Ontario on 8 April 2005 on behalf of all persons who farmed

cattle in Canada as of 20 May 2003. Three similar actions were commenced in the same month in

Quebec, Saskatchewan and Alberta. At the time, the representative plaintiff in this action was Mr.

Bill Sauer, who operated a farm in Ontario that included cattle. The defendants were Canada,

Ridley Inc., the manufacturer of cattle feed alleged to have been consumed by the cow diagnosed

with BSE in May 2003, and Ridley’s parent company, Ridley Corporation Limited.

In 2006, Regional Senior Justice Winkler, as he then was, dismissed motions to strike

brought by Canada and Ridley Inc., as it was not “plain and obvious” that the actions could not

succeed, and that an evidentiary record was necessary to decide the matter. Winkler RSJ struck the

action against Ridley Corporation Limited: see Sauer v. Canada (Minister of Agriculture) (2006),

79 O.R. (3d) 19. The Ontario Court of Appeal dismissed appeals by Canada and Ridley Inc.: see

Sauer v. Canada (Attorney General), 2007 ONCA 454, [2007] O.J. No. 2443, leave to appeal

refused, [2007] S.C.C.A. No. 454.

Following a contested motion, on 3 September 2008 Lax J. certified the action under the

Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”) on behalf of a national class “except in the

province of Quebec.” Mr. Sauer was approved as the representative plaintiff of the Class: see Sauer

v. Canada (Agriculture), [2008] O.J. No. 3419 (Ont. S.C.), leave to appeal dismissed, [2009] O.J.

No. 402 (Div. Ct.). At the same time, Lax J. approved a settlement with Ridley Inc., leaving Canada

as the sole defendant.

5

Lax J. defined the Class as follows:

All persons who as at May 20, 2003 were resident in Canada (except the province

of Quebec) and farmed cattle including, but not limited to, cow-calf, backgrounder,

purebred, veal, feedlot and dairy producers.

In this class definition, 'person' means any individual, partnership, corporation,

cooperative, communal organization, trust, band farm or other association who as

at May 20, 2003 was farming cattle within the meaning of the Income Tax Act.

In her 3 September 2008 Order, Lax J. stated the Common Issues as follows:

1. Does section 9 of the Crown Liability and Proceedings Act bar the Class

Members' claims against the federal government of Canada?

2. Were the defendants negligent and if so, when and how?

3. What is the appropriate apportionment of fault, if any, between the defendants?

4. Can the amount of compensatory damages, if any, be reasonably determined on

an individual basis? If so, how should individual damages be determined?

5. If the answer to question 4 is no, can the amount of compensatory damages, if

any, be determined on an aggregate basis? If so, what is the amount of damages and

how should they be distributed?

In 2010 the action in Quebec, Bernèche c. Canada (Procureur général)¸ 2007 QCSC 2945,

[2007] J.Q. No. 6368, which had been certified in 2007 by Wagner J., as he then was, was

suspended and the certification in this action was amended by Strathy J., as he then was, to include

Quebec farmers: see Sauer v. Canada (Attorney General), 2010 ONSC 4399, [2010] O.J. No.

3381. A Fresh as Amended Statement of Claim was delivered on 9 May 2011, and this action then

proceeded as a national class action.

There were several days of discoveries of Canada’s deponent on liability issues, Dr. John

Kellar, in 2013 and 2014. Mr. Sauer was also examined for two days in April 2013.

In March 2017 Mr. Sauer died. Subsequently, on 30 April 2018 Perell J. substituted Flying

E Ranche Ltd. (“Flying E Ranche”) as the new representative plaintiff of the Class. Leave was

granted to the parties to deliver amended pleadings and a litigation plan was approved by Perell J.

A Further Fresh as Amended Statement of Claim was issued on 24 May 2018. A Fresh as Amended

Statement of Defence was filed on 2 August 2018, which was further amended on 30 October

2020.

The Common Issues were also amended by Perell J. on 30 April 2018 as follows:

6

1. Does section 9 of the Crown Liability and Proceedings Act bar the class

members' claim against the government of Canada?

2. Were the defendants negligent and if so when and how?

3. Can the amount of compensatory damages, if any, be reasonably determined on

an individual basis? If so, how should individual damages be determined?

4. If the answer to question 4 [sic] is no, can the amount of compensatory damages,

if any, be determined on an aggregate basis? If so, what is the amount of damages

and how should they be distributed?³

Additional discoveries of Dr. Kellar were conducted in November 2017 and October 2020.

The plaintiff examined Canada’s deponent on financial assistance programs and damages, Dr.

Douglas Hedley, for three days in September 2018 and for another day in October 2020. Between

2017 and October 2020, the plaintiff examined the principal of Flying E Ranche Ltd., Mr.

Lawrence Sears, over several days, and examined three other members of the Class produced to

provide information from different sectors of cattle farming.

On 15 March 2019, Perell J. scheduled a 60-day trial to commence on 18 January 2021,

having been advised that the trial would take 8 to 12 weeks. Extensive production of documents

was made by the government since at least 2016, and expert reports were prepared and exchanged.⁴

At a pre-trial conference held in October 2020, Glustein J. was advised that the trial would take up

to 7 or 8 months. Following a second pre-trial conference in November 2020, Glustein J. scheduled

a 77-day trial. He ordered that the parties follow a “hybrid” approach of presenting some of their

evidence-in-chief by way of affidavit with limited direct examination, followed by cross-

examination. Much of this procedural history is contained in my Reasons on Motion for

Adjournment, reported as Flying E Ranche Ltd. v. Attorney General of Canada, 2020 ONSC 8072.

The hybrid approach to the trial was also the subject of discussion by me in my Ruling on

the Admissibility of the Expert Reports: Flying E Ranche Ltd. v. Attorney General of Canada,

2021 ONSC 1512.

Part III - Trial procedure and presentation of evidence

The trial commenced on 16 February 2021, having been adjourned by me to 1 February

2021 as explained in my Reasons found at 2020 ONSC 8072, cited above, and subsequently

adjourned on consent for two additional weeks. The trial proceeded, with breaks, over a total of

55 days, concluding on 13 August 2021.

At the outset of the trial I was provided with a schedule listing the anticipated witnesses. It

contemplated 19 days for the plaintiff’s case and 55 days for the defendant’s case. The plaintiff’s

³The reference to question 4 is incorrect and should refer to question 3.

⁴The plaintiff had already prepared initial expert reports in 2014, as will be reviewed later in these Reasons.

7

case was completed in 19 days. However, the defendant’s case only took 30 days as many

witnesses that were scheduled to be called, several of whom had prepared affidavits, did not testify

and I did not read their affidavits.

Due to the COVID-19 pandemic, the entire trial was conducted virtually, using ZOOM, a

platform that allowed counsel, the witnesses and the judge, to see and hear one another using their

computers. This facilitated the effective hearing of evidence from witnesses in the UK, France,

Australia and various parts of Canada. While there were some minor interruptions, the technology

worked well and the witnesses were examined and cross-examined by counsel without difficulty.

As a hybrid trial had been ordered, the plaintiff’s fact witnesses presented their evidence

in-chief largely by way of affidavit, with relatively brief direct questioning. The defendant then

had the opportunity to conduct thorough cross-examinations and challenge that evidence. On the

other hand, several of the defendant’s witnesses did not provide affidavits but instead presented

all their evidence orally through examination-in-chief, prior to being cross-examined.

The parties were cognizant of the need for the affidavits to comply with the rules of

evidence applicable at a trial, as opposed to a motion or application where affidavits may contain

statements of the deponent’s “information and belief”: see, e.g., r. 39.01(4) and (5) of the Rules of

Civil Procedure, R.R.O. 1990, Reg. 194. This point was addressed early in the trial in my Ruling

on Hearsay Objection to the Sears Affidavit reported as Flying E Ranche Ltd. v. Attorney General

of Canada, 2021 ONSC 1513.

Following an opening statement, the plaintiff spent several days reading in portions of the

transcripts of the examinations for discovery of Dr. Kellar and Dr. Hedley. The plaintiff then led

evidence from two fact witnesses: the representative plaintiff Mr. Sears, and Mr. Matthew Taylor,

who had worked at the Canadian Cattlemen’s Association (“CCA”) between 1988 and 1993, and

for Agriculture and Agri-Food Canada (“AAFC”) as an Industry Liaison between 1993 and 1995.

Mr. Sears and Mr. Taylor each swore affidavits which I admitted as part of their evidence, and

they were each questioned briefly in-chief before being cross-examined by counsel for the

defendant.

I also admitted evidence of Mr. Mel McCrea as part of the plaintiff’s case. Mr. McCrea

was the owner of the cattle farm where the Canadian cow that tested positive for BSE in 2003 was

born. He had sworn an affidavit on the certification motion in 2006, and was cross-examined on

that affidavit by counsel for Ridley Inc. Mr. McCrea died in May 2010. My ruling on the admission

of Mr. McCrea’s evidence from the certification motion is found at Flying E Ranche Ltd. v.

Attorney General of Canada, 2021 ONSC 1554.

The plaintiff led evidence from three expert witnesses. The first expert was Dr. Samuel

Beckett, a veterinary epidemiologist based in Australia. He was qualified as an expert in veterinary

epidemiology who specializes in biosecurity and applies risk management principles. Following a

ruling by me as to his expertise and the appropriate scope of his evidence, reports by Dr. Beckett

were entered as exhibits which, together with a relatively short direct examination, formed his

8

evidence-in-chief, as discussed in my Ruling on the Admissibility of the Expert Reports found at

Flying E Ranche Ltd. v. Attorney General of Canada, 2021 ONSC 1512.

The plaintiff called two other expert witnesses. Dr. William Leiss was qualified as an

expert in risk management and risk communication. His reports were also admitted as part of his

evidence-in-chief. Dr. John Groenewegen was the plaintiff’s damages expert. He was qualified as

an expert agricultural economist who specializes in commodity market analysis, financial loss and

damages in the Canadian agricultural industry. As discussed below dealing with damages, Dr.

Groenewegen prepared a number of reports which were made exhibits, and testified at length, in

both direct and cross-examination.

In contrast, the defendant presented several witnesses without using the hybrid format.

Three senior veterinarians, Dr. Norman Willis, Dr. William Bulmer and Dr. Kellar, each

of whom had important first-hand knowledge of the actions of the government respecting BSE in

the later 1980s and 1990s, all gave their direct evidence at length, orally.

Dr. Willis was the Director General of the Animal Health Division, which became the

Animal and Plant Health Directorate, Food Production and Inspection Branch (“FPIB”), with

Agriculture and Agri-Food Canada (“AAFC”, or “Agriculture Canada” or the “Department of

Agriculture”)⁵during the relevant time in the early 1990s. He was also the Chief Veterinary Officer

(“CVO”) of Canada and Canada’s senior representative at the OIE. Dr. Willis served as President

of the OIE from 1997 to 2000.

Dr. Bulmer was the Director of the Animal Health Division from 1987 to 1993 and reported

to Dr. Willis.

Dr. Kellar was the Associate Director, Disease Control Section, in the Animal Health

Division from 1988 to 1994. He had a background in epidemiology, having previously been,

among other things, the Chief of Epidemiology in the Animal Health Division from 1985 to 1987.

Dr. Kellar played a central role in Canada’s response to BSE between 1990 and 1994. Following

the 2003 BSE event, in 2008, Dr. Kellar completed a lengthy report on BSE in Canada and North

America.

Dr. Hedley is an agricultural economist who at the time of his retirement from AAFC in

2004 was the Assistant Deputy Minister, Farm Financial Programs Branch. He had been one of

three senior public servants with oversight of the AAFC BSE Response Team that was created

shortly after the border closed in May 2003. He also testified for the defendant, and gave his direct

evidence orally.

The only fact witness for the defendant who utilized the hybrid approach was Mr. Gilles

Lavoie, who in 2003 was the Senior Director General of the Operations and Agricultural Industry

⁵In these Reasons I refer to the defendant by a number of terms, including “Canada”, “Agriculture Canada” “AAFC”,

the “Department of Agriculture” and the “Department.”

9

Services Directorate in the Market and Industry Services Branch of the AAFC. In May 2003,

following the closure of the borders to export of Canadian cattle and beef, Mr. Lavoie was

appointed the Executive Team Leader at AAFC charged with developing assistance programs for

cattle producers. He reported to Dr. Hedley, among others.

The defendant’s four expert witnesses each provided reports which were admitted as part

of their evidence-in-chief.

The first of the defendant’s expert witnesses was Mr. Michael Presley, who had expertise

in the federal regulatory process gained from a long career with the federal government. I permitted

him to give expert opinion evidence on that regulatory process, including the development and

approval of regulatory proposals. This evidence was relevant to the claim by the plaintiff that

Canada’s 17-month delay in enacting the ruminant Feed Ban in August 1997, following the

WHO’s recommendation in February 1996, constituted “gross negligence.”

Dr. James Hope was the defendant’s second expert witness. His field of specialty is

biochemistry and molecular biology. Dr. Hope has worked in the field of Transmissible

Spongiform Encephalopathies (“TSEs”), and BSE in particular, for over 30 years in the UK, since

the early days of BSE. He was qualified to give expert evidence on the science of TSEs.

Dr. Alejandro Thiermann, a veterinarian who had a long career with the US government

dealing with international trade issues involving animal health, including working at the OIE as

President of the Terrestrial Code Commission, gave expert evidence on the formulation of

international science-based health standards by the OIE, including the standards for BSE set by

the OIE. He also described the role of the OIE as it relates to the World Trade Organization

(“WTO”) and the Sanitary and Phytosanitary Agreement (the “SPS Agreement”).

Mr. Robert Low , the defendant’s damages expert, presented his evidence through several

reports and testimony at trial.

Finally, the defendant read in excerpts from the evidence of the three farmers with different

types of cattle operations who were produced for discovery.

The documentary record filed at the trial was large. Through the read-ins alone, the plaintiff

entered a bundle of 588 different documents, totalling over 8,400 pages, as an exhibit. The plaintiff

also entered 191 other documents spanning several thousand pages bundled into 6 exhibits,

including evidence from Federal Court proceedings in 1994, business and public records,

documents in possession of the defendant, and scientific articles. These were admitted pursuant to

provisions of the Evidence Act, R.S.O. 1990, c. E.23, and common law principles of evidence.

Their admissibility was addressed in my Ruling on Admissibility of International Public Records,

reported as Flying E Ranche Ltd. v. Attorney General of Canada, 2021 ONSC 2011.

Approximately 40 additional exhibits were entered through the plaintiff’s witnesses,

including a range of scientific and government reports and records.

10

The defendant’s case added over 100 more exhibits consisting of several thousand pages.

This included over 100 documents bundled into two exhibits entered under the business records

exception and the principled exception to the hearsay rule. Several documents were entered as one

exhibit as part of the defendant’s read-ins: see my Ruling on Defendants’ Read-Ins at Flying E

Ranche Ltd. v. Attorney General of Canada, 2021 ONSC 4301.

In the end, the documentary evidence consisted of over 1,000 documents spanning over

20,000 pages.

The parties provided me with a lengthy (60-page) Agreed Statement of Facts, some of

which I have borrowed from in my review of the facts. The parties also prepared a Neutral

Chronology, Cast of Characters and Glossary of Acronyms, and extensive written briefs were

submitted at the conclusion of the trial, all of which were helpful to me.

Part IV - The issues

The issues for determination are the Common Issues stated by Justice Lax, as revised by

Justice Perell. I restate them here, correcting issue 4 to refer to question 3:

1. Does section 9 of the Crown Liability and Proceedings Act bar the class

members' claim against the government of Canada?

2. Were the defendants negligent and if so, when and how?

3. Can the amount of compensatory damages, if any, be reasonably determined on

an individual basis? If so, how should individual damages be determined?

4. If the answer to question 3 is no, can the amount of compensatory damages, if

any, be determined on an aggregate basis? If so, what is the amount of damages and

how should they be distributed?

At the outset of the trial, counsel advised me that the parties’ experts on the question of

how any damages should be distributed were in agreement on a number of issues. I therefore

agreed with their proposal that, should the Court make a damages award on an aggregate basis, the

parties would make best efforts within 45 days of my award to agree on a distribution protocol,

failing which they would file materials seeking disposition by me of any remaining issues related

to distribution. As a result I did not hear any evidence on, and my Reasons do not address, the third

Common Issue.

Before addressing the Common Issues directly, I review, largely chronologically, evidence

describing the emergence of BSE in the 1980s and 1990s, the developing scientific knowledge of

BSE, including its possible origins and manner of transmission, and the British, international and

Canadian responses to it up to the implementation of the Canadian Feed Ban in 1997. I then address

the impact of the diagnosis of BSE in a Canadian-born cow in 2003, including the domestic and

international responses to it. I describe in detail the financial assistance programs which provided

relief to cattle farmers between 2003 and 2007. Briefly, I address Canada’s investigation of BSE

11

resulting in a report published in 2008, and the decline of the disease since the early 2000s. This

is followed by my discussion of the expert scientific evidence on BSE presented by Dr. Beckett

and Dr. Hope.

Part V - The emergence of BSE and Canada’s response to it: 1986 - 1996

The emergence of BSE in the United Kingdom: 1986 - 1990

In November 1986, the Central Veterinary Laboratory (“CVL”) of the United Kingdom

first identified BSE as a new disease affecting cattle. This followed a number of cases seen in

cattle, or bovines, since approximately April 1985. The following year, BSE was described in an

article in the 31 October 1987 issue of the Veterinary Record by Dr. Gerald Wells and others. The

article explained that previously healthy cattle would become apprehensive, hyperaesthetic,

aggressive, develop incoordination, and have difficulty rising from a lying position. Other signs

included weight loss and reduced milk yield. The disease caused a progressive altering of the

mental state of the animal. Incoordination would gradually become more pronounced, and there

would be displays of kicking and increased nervousness and frenzied behaviour. It was invariably

fatal, from about two weeks to up to six months after clinical signs emerged.

Dr. Wells and others concluded that the disease was a novel pathogen belonging to the TSE

group of diseases. TSEs are progressive life-terminating diseases that occur in the central nervous

system. Other TSEs include scrapie in sheep, transmissible mink encephalopathy, chronic wasting

disease in deer and elk, and the rare human form, CJD. Post-mortem examination of the brain in

victims of TSEs show lesions or holes resembling a sponge – hence the term spongiform.

Encephalopathy refers to damage or disease that affects the brain.

TSEs are now recognized as prion diseases, as the infection is contained in a proteinaceous

infectious particle, or prion. The concept of a prion had been identified earlier in the 1980s,

although proof of the concept was still being sought in 1987.

Also in 1987, the chief epidemiologist of the UK Ministry of Agriculture, Fisheries and

Food (“MAFF”), Dr. John Wilesmith, investigated the new disease and concluded that the likely

origin of BSE was linked to consumption, beginning around 1981 or 1982, of ruminant-derived

protein or ruminant meat and bone meal (“RMBM”)⁶which was incorporated into cattle feed

usually fed to calves in their first 6 months as a protein supplement. A link was also made with

changes in rendering processes and the manufacturing of MBM in the UK in the early 1980s,

including a decline in exposure of MBM to solvents at high temperatures and a decline in the use

of super-heated steam which, it was believed, allowed infectivity to survive in MBM.

It was known by 1988 that clinical symptoms of BSE emerged in cattle usually between 2-

8 years of age, and on average about five years after cattle became infected. Until symptoms arose,

there was no method of discerning whether “preclinical” or “subclinical” (or asymptomatic) cattle

were BSE-infected. Confirmation of BSE could only occur after death by examining the animal’s

⁶I use RMBM and MBM interchangeably in these Reasons.

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brain. The long incubation period for the disease meant that many cattle carried the infectious

agent subclinically and never showed signs of the disease before slaughter.

By September 1987 the reported incidence of the disease had grown to 60 new cases per

month in the UK. By 1988, over 2,000 cattle were reported infected, which rose to 15,000 cattle

by 1990, and over 91,000 cattle by 1993. Most cases were in dairy herds where it was common to

raise calves on concentrated feeds from a very early age.

Dr. Wilesmith’s findings were reported in an article written by him, Dr. Wells and others

in the Veterinary Record in 1988. The article identified similarities between BSE and scrapie, a

disease which had been recognized for over 200 years. A number of factors were identified that

might have led to the emergence of BSE in cattle. These included a dramatic increase in the sheep

population in the UK commencing in 1980, a probable increase in the prevalence of scrapie-

infected flocks, greater inclusion of sheep and sheep heads in material for rendering which would

then have been included in MBM and in feed, and changes in rendering procedures which may

have resulted in heating material at lower temperatures and for shorter periods of time such that

infectious agents were not destroyed.

In May 1988 an expert working party, which included Dr. Wilesmith as an advisor, was

established in the UK under the direction of Sir Richard Southwood to examine and report to the

UK Government on the implications of BSE for both animal and human health (the “Southwood

Report”).

On 14 June 1988 the UK government issued The Bovine Spongiform Encephalopathy

Order 1988, which made BSE a reportable disease and banned the sale, supply, or use of ruminant-

derived protein in feeds for ruminant animals (the “UK Feed Ban”). The UK Feed Ban came into

force on 18 July 1988. On 8 August 1988 the UK ordered the compulsory slaughter of BSE-

affected cattle. On 30 December 1988, the UK prohibited use of milk from BSE-affected cattle,

except for milk fed from dam to calf. A year later, on 31 December 1989, the Bovine Spongiform

Encephalopathy (No. 2) Amendment Order (SI 1989/2326) came into force making the ruminant

UK Feed Ban permanent.

In November 1988 an editorial appeared in the noted medical journal The Lancet entitled

“BSE and Scrapie: Agents for Change.” It stated that “the inadvertent inclusion of scrapie-

contaminated meat and bone-meal in compounded cattle food, is the most plausible explanation

for the widespread appearance of BSE but remains to be proven.” The article also noted that the

“failure to detect preclinical cases of BSE poses the biggest threat to disease control and to cattle

export earnings in the UK.”

The Southwood Report was released in February 1989. It noted the similarities to scrapie

and the factors relating to sheep observed by Dr. Wilesmith as a possible explanation for the

emergence of BSE in cattle. The Southwood Report also confirmed many of the findings that had

been observed by Wilesmith, Wells and others, including: (a) all cases of BSE occurred in adult

animals with an age range of 3 to 11 years; (b) the period from infection to the expression of

symptoms was 2 to 8 years; (c) death occurred anywhere from 2 weeks to 6 months after symptoms

13

appeared; (d) the infectious agent was highly resistant to heat deactivation; (e) the most likely

source of infection was the incorporation of RMBM from infected animals into feed rations fed to

healthy animals; (f) calves appeared to be far more susceptible to contracting the disease than adult

animals; (g) there was no evidence of vertical (dam to offspring) or horizontal (bovine to bovine)

transmission; and (h) none of the processes used in rendering RMBM in the UK were capable of

eliminating the infectious agent.

In June 1989 an international roundtable on BSE was convened to consider the state of

knowledge of the disease and discuss the findings of the Southwood Report. This led to the

publication, in May 1990, in the Journal of the American Veterinary Medical Association, of a

number of articles. One, by Dr. Wilesmith, stated two hypotheses for the development of BSE: (1)

an increase in exposure of cattle to scrapie from rendered sheep carcasses; and (2) an increase in

exposure of cattle to a cattle-adapted scrapie-like agent through rendered cattle carcasses. Dr.

Richard Kimberlin, who had been the head of the Neuropathogenesis Unit of the Institute for

Animal Health in Edinburgh (“NPU”), and who also became one of the leading experts on BSE,

in commenting on the risk to humans, stated that “even if the theoretical risk of BSE is small, the

disease has to be treated as though it were a proven risk.”

An article by Dr. Richard Marsh reported on mink contracting spongiform encephalopathy

in Wisconsin in 1985. However the mink had not been fed any sheep protein but had consumed

material from “downer” dairy cows. This suggested that a scrapie-like disease might already have

been present in some cattle.

In November 1989 MAFF banned the inclusion of specified bovine offals in human food

in the UK (the “SBO Ban”). This included material from the brain, spinal cord, tonsils, spleen,

thymus and intestines, considered most likely to be infective, from cattle over 6 months of age.

In June 1990 an article published in The Veterinary Record summarizing the position taken

by the British Veterinary Association stated that “[c]attle probably became infected with BSE from

ingesting scrapie infected material from sheep which was augmented in the later stages by

recycling of infected material from cattle.” The article noted that “[o]f prime importance is the

need for research on rendering processes that will inactivate agents of the BSE type.”

Following a recommendation in the Southwood Report, a committee was established to

advise, co-ordinate and oversee research work on BSE chaired by Dr. David Tyrrell. One of its

members was Dr. Kimberlin. This committee, the Spongiform Encephalopathy Advisory

Committee (“SEAC”), often referred to as the Tyrrell Committee, published its final report in July

1990 (the “Tyrrell Report”).

The Tyrrell Report repeated the Southwood Report’s conclusion that BSE may have

originated from scrapie infection in sheep and that transmission was through MBM, likely due to

the factors identified by Dr. Wilesmith. However, the Tyrrell Report also noted that “it cannot be

ruled out that cattle initially infected by the feed route might have passed the infection on to other

cattle, so far unrecognized because infected animals could still be in the incubation period.”

14

The Agriculture Committee of the British House of Commons released a report on BSE on

10 July 1990. It noted that the SBO Ban, implemented in 1989, “allows for the fact, essential to

the understanding of BSE, that animals affected with the disease do not manifest clinical signs

until it is well advanced: it is therefore likely that sub-clinically affected animals are being sent for

slaughter.”

Finally, an article by J.G. Collee published in The Lancet on 24 November 1990 restated

the prevailing view that “[i]t is currently believed that BSE, first recognised in cattle in Britain in

1985-86, is likely to represent an unfortunate transmission of the scrapie agent from processed

sheep protein or protein from subclinically affected cattle by the oral route.”

L’Office International des Epizooties (OIE)

The OIE, now known as the World Organization for Animal Health but which still uses the

acronym “OIE”, is an intergovernmental organization that has existed since 1924. It plays an

important role in safeguarding world trade by gathering, analyzing and publishing science-based

health standards for international trade in animals and animal products. There are approximately

180 member countries, including Canada, the UK and the USA. They use OIE health standards as

guidelines for international trade in animals and animal products.

The World Trade Organization (“WTO”) is the global organization dealing with the rules

of trade among nations, established on 1 January 1995 at the conclusion of the Uruguay Round of

Multilateral Trade Negotiations held pursuant to the General Agreement on Tariffs and Trade

(“GATT”). One of the agreements reached upon the establishment of the WTO, was the SPS

Agreement.

The SPS Agreement provides that while member countries may adopt their own measures

necessary to protect human, animal, and plant life and health, such measures must not be applied

in a manner that would constitute a means of arbitrary or unjustifiable discrimination between

member countries or amount to a disguised restriction on international trade.

The OIE is recognized in the SPS Agreement as the international standard-setting

organization for the safe trade in animals and animal products. Under the SPS Agreement, WTO

members may meet their obligations by applying OIE standards.

Since 1968, the OIE has published the Terrestrial Animal Health Code (the “Terrestrial

Code” or the “Code”). The Code contains standards aimed at assuring the facilitation of

“international trade in animals and animal products through the detailed definition of the minimum

health guarantees to be required of trading partners, so as to avoid the risk of spreading animal

diseases inherent in such exchanges.” It is subject to revision and approval by the International

Committee, now known as the World Assembly of Delegates, the governing body of the OIE

which meets annually in Paris at the OIE’s General Session. Each member country has a

representative on the International Committee which is “composed of technical representatives

appointed by the participating States.” In practice, the representatives are often, as in Canada’s

case, the Chief Veterinary Officer of the country.

15

The OIE contains four specialized commissions, or committees, which report to the

International Committee. One of those commissions is the Terrestrial Animal Health Standards

Commission (the “Code Commission”, formerly known as the OIE International Animal Health

Code Commission). It was established in 1960 and meets several times a year. The Code

Commission works with scientists to prepare draft texts for new articles of the Terrestrial Code

and to revise existing articles in light of advances in veterinary science. The Terrestrial Code, and

any amendments to it, only become binding and authoritative when adopted by consensus by the

International Committee.

Until 2005 the OIE maintained two lists of animal diseases – List A and List B. The OIE

collected data on List A diseases from Member Countries on a monthly basis, and for List B

diseases on an annual basis. List A diseases were defined as “[t]ransmissible diseases that have the

potential for very serious and rapid spread, irrespective of national borders, that are of serious

socio-economic or public health consequence and that are of major importance in the international

trade of animals and animal products.” List B diseases were defined as “[t]ransmissible diseases

that are considered to be of socio-economic and/or public health importance within countries and

that are significant in the international trade of animals and animal products.” On 1 January 2005,

the OIE combined all the diseases previously contained in Lists A and B into a single list, known

as the “OIE List.”

The Terrestrial Code contains notification requirements that member countries must

follow if there is an occurrence of a listed disease in their territory. Each listed disease normally

has a chapter in the Terrestrial Code to assist member countries in the harmonization of disease

detection, prevention, and control.

The Terrestrial Code also provides that veterinary authorities in member countries must

submit to the headquarters of the OIE reports every six months on the absence, presence, and

evolution of listed diseases, infections, or infestations, and information of epidemiological

significance to other member countries as well as annual reports concerning any other information

of significance. The OIE publishes an annual World Animal Health Report, which provides a

snapshot of the animal health status and disease control methods of each member country from

which it has received the required reports.

The OIE and BSE: 1988 - 1990

The existence of BSE appears to have first been raised at the OIE at its General Session in

May 1988. The CVO from the UK at the time, Dr. William Rees, gave a short report about the

emergence of BSE in the UK. In his testimony at trial in May 2021, Dr. Thiermann, who was

attending his first OIE meeting as a member of the US delegation, specifically recalled the

presentation 33 years later.

In the “Report on Disease Status Worldwide in 1988”, published in April 1989, the OIE

addressed BSE under the heading “Other Diseases.” It provided a brief description of the disease,

stating it had similarities to scrapie and that studies thus far “indicated that the infected cattle had

16

been exposed to feedstuffs containing ruminant-derived protein possibly contaminated with

scrapie agent.” This description remained the same in 1989.

The OIE identified BSE as having first appeared in 1985-1986 in the UK. It noted that

Ireland and Oman had also reported BSE. The OIE identified BSE as “[a] new disease not yet

entered in List A or List B.”

In November 1989 Dr. Wilesmith and another colleague from the CVL, Dr. Ray Bradley,

gave a presentation on BSE to the Foot and Mouth and Other Epizootics Commission of the OIE

(the “FMD Commission”). That presentation referred to the findings and recommendations of the

Southwood Report, and described the steps taken by the UK to control the disease. It also noted

that studies were underway in mice and hamsters, as well as with cattle, to determine if there could

be maternal transmission, which there was for scrapie, or whether cattle were “dead-end hosts.”

In the report of its 28 November – 1 December 1989 meeting, the FMD Commission noted

that BSE was “indisputably a new member of the group of diseases known as the sub-acute

spongiform encephalopathies caused by unconventional transmissible agents and is the bovine

equivalent of scrapie in sheep.” The FMD Commission noted that “the epidemiological data

support an origin from sheep scrapie and possibly from a bovine strain of scrapie agent existing in

a sub-clinical form in cattle.”

The report noted that in the UK “clinically-suspected BSE is notifiable”, and that “the only

tissues containing significant titres of scrapie agent, even in the clinical stage of the disease are

central nervous and lymphoreticular tissues, including those of the intestine. No infectivity is

detectable in muscle, udder, colostrum or milk.” When asked about this report at trial, Dr. Kellar

observed that the focus was on “clinically suspected” animals, noting that “everything done in

BSE to this point was predicated on clinical expression”, and that the focus of the UK presentation

was on sheep and scrapie.

The FMD Commission recommended “action for the early detection of BSE” including

that “studies should be undertaken to determine the occurrence and incidence of scrapie, the

method of disposal of ruminant carcasses and the use of and inclusion rate of ruminant protein in

rations fed to ruminants.” In addition, “consideration should be given to a) banning the feeding of

ruminant protein to ruminants, and b) making suspicion of BSE notifiable.” The FMD Commission

also recommended that farmers, veterinarians and others be made aware of the clinical signs of

BSE, and that pathologists and epidemiologists develop techniques to identify the disease and the

source of infection.

With respect to live cattle, the FMD observed:

Based on the available epidemiological evidence concerning the origin of the

disease and on the known low attack rate, provided that in an affected country

measures are taken to ban the feeding of ruminant protein to ruminants, the disease

is notifiable and that affected cattle are slaughtered and destroyed, it is highly

unlikely that animals exported from that country will develop the disease. However,

17

should a case occur in this way in an importing country there is no evidence to

suggest that this would necessarily lead to the establishment of the disease.

The FMD Commission’s recommendations were not requirements of the OIE. As Dr.

Thiermann testified, the OIE speaks through its International Committee in the annual meetings

each spring.

At the OIE’s General Session in May 1990, the recommendation of the Code Commission

to add BSE to List B of animal diseases was approved. This required all member countries to notify

the OIE of any important epidemiological event relating to BSE. At this meeting the UK provided

an update on BSE noting that it had confirmed over 13,000 cases on more than 6,000 farms. The

majority (63%) of these farms had only a single case. In explaining the cause, the UK wrote:

Epidemiological studies indicate that BSE is an extended common source

epidemic, most probably caused initially by feeding cattle with compound rations

which contained protein material derived from sheep, some of which were infected

with scrapie. Subsequently some BSE infected material derived from bovine

animals may also have been included in feed for a limited time.

A number of factors have been identified which, in combination, precipitated the

emergence of the disease in 1986 following an increase in the exposure of animals

to the causal agent in 1981 or 1982. The most significant were an increasing sheep

population, a probable increase in the incidence of scrapie, and changes in

rendering processes in the 1970's and early 1980's.

The OIE held special meetings on BSE in July and September 1990, which included Drs.

Wilesmith, Kimberlin and the new UK CVO, Dr. Keith Meldrum, among others. In the report of

the meeting in September 1990, the suspected origins of the disease from scrapie and changes in

rendering practices were repeated, although it was also noted that “exposure was further increased

from 1985-86 due to the recycling within the cattle population of infected cattle material.” The

report recommended import restrictions, stating:

Cattle imported from countries, where BSE is present, and which have taken

appropriate measures to deal with the animal health problem, are highly unlikely to

develop the discase. However, additional import conditions are recommended to

reduce this risk even further. These must include permanent identification to enable

tracing back to the herd of origin and exclusion of animals whose dams were

confirmed or suspect cases of BSE. Animals from countries with a high incidence

of BSE must not have been fed ruminant derived protein. This requirement could

be similarly applied to the dams of breeding animals to provide even more

reassurance that BSE would not develop in imported animals.

Additionally, a ban was recommended on including specified bovine offals (brain, spinal

cord, thymus, tonsils, spleen and intestines) and products derived from them in animal feed and

18

human food “in countries with a high incidence of the disease.” The only country with a “high

incidence” of the disease was the UK.

It was not until its General Session in May 1991 that the OIE directed the Code

Commission to develop a chapter on BSE, as a “high priority.”

Canada’s cattle industry

Canada has a large cattle industry. In 1990, the cattle population was approximately 12

million. By the early 2000s, the farmed cattle population in the country was approximately 13

million on about 150,000 farms. According to Statistics Canada, as of 1 January 2003 there were

2.2 million dairy cattle and about 11.3 million beef cattle. Prior to the discovery of BSE in May

2003, the industry was expanding. Cattle is the largest of the Canadian livestock industries.

The sheep population in Canada in the 1990s was approximately 700,000 animals. In

contrast, in the UK the sheep population in the early 1990s was approximately 40 million and its

total cattle population was about 10 million animals, of which 4 million were adults.

Generally, the Canadian cattle industry consists of four sectors: (a) beef; (b) dairy; (c) veal;

and (d) breeding.

The beef sector is the largest, and is predominantly in western Canada. It raises cattle that

become beef and beef products. From birth to slaughter, there are four main stages of beef

production, which involve the following four business operations:

(a) Cow-calf operations, which breed and raise cattle until the animals attain an

appropriate weight for sale to backgrounders and/or feedlot operators. Producers

usually breed animals over the summer months and calving occurs nine months

later in the following spring. Between six to nine months of age, calves are weaned.

Producers, or farmers, may then keep calves as breeding stock, or they may sell

them to a backgrounding operation, feedlot operator, or to another farm as

replacement breeding stock. Cow-calf operators must also sell “cull cattle”, which

are older, no longer productive breeding animals, typically over five years old.

Cow-calf operations can range from small hobby farms that raise one or two calves

a year, to much larger operations in which hundreds or more than a thousand head

of cattle are produced annually;

(b) Backgrounding operations, which take weaned calves, usually over the winter,

and feed them to increase their weight to roughly 800 – 900 pounds. Backgrounding

operations may be stand-alone businesses that focus on one stage of production, or

the operations may be combined with cow-calf, feedlot, or other farming

operations;

(c) Feedlot operations, which involve “finishing” the animals by feeding high

energy rations to achieve a slaughter weight which, depending on the breed, ranges

from 1000 to 1700 pounds. Feedlot operators may custom-feed cattle for clients

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who maintain ownership of the cattle. Feedlots can range in capacity from a few

hundred to tens of thousands of cattle; and

(d) Packers and renderers, which are the final stage of production. Abattoirs, or

slaughterhouses, are where animals are slaughtered and the beef and beef products

are sold to domestic and international markets. Portions of the animal not fit for

human consumption, such as the brain, skull, bones, spinal cord, certain organs and

elements of the central nervous system are sold to rendering plants where they are

“cleansed” by heat and pressure, yielding fats (tallow), and ground into phosphate

fertiliser, MBM and gelatin. MBM is in the form of a powder, similar to coffee

grounds, and can be rich in protein. Renderers would sell MBM to animal feed

manufacturers who would include it in their products for farmers.

In the beef sector, animals are usually slaughtered between 12 and 30 months of age. Most

are 24 months or less. Cows and bulls retained for breeding may live for several years.

Most of the Canadian dairy sector cattle are located in Ontario and Quebec. About half of

dairy animals are milking cattle. Heifer calves born on dairy farms may be used as herd

replacements for aging cows culled from the herd, or the animals may be sold to other dairy

producers to replace breeding animals. Some are exported. In dairy operations, bull calves may be

used for breeding purposes although the vast majority are sold for beef or veal production.

The veal sector is closely connected to the dairy sector and is also concentrated in Ontario

and Quebec. On a dairy farm, bull calves are typically sold to veal producers.

Many cattle farms have mixed operations that include more than one of the business

sectors. Additionally, many livestock operations (beef/veal/dairy/breeding) also grow crops for

sale.

Since at least the later 1970s, the beef, cattle and feed markets in Canada and the US have

functioned like a single market. The US market is approximately ten times larger than the Canadian

market, and a majority of Canadian cattle, and beef products, are exported to the United States. In

early 2003, prior to the discovery of BSE in a Canadian cow, approximately 60% of Canadian

cattle and beef production was exported. Of that, 100% of live cattle exports and over 80% of meat

product exports, went to the US.

Canada’s statutory framework

AAFC is the body within the defendant Government of Canada established pursuant to the

Department of Agriculture and Agri-Food Act, R.S.C., 1985, c. A-9 (the “DAAA”). The powers,

duties, and functions of the Minister under the DAAA are set out in s. 4 of that Act and relate

broadly to the regulation of agriculture, agricultural products and research.

Prior to 1997, the Food Production and Inspection Branch of AAFC (“FPIB”) was

responsible for production and quality standards, and for inspection of various agri-food products.

The FPIB contained, among other things, the Health of Animals Directorate, responsible for

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managing animal health. The National Animal Health Program had existed for many years within

the FPIB, and was overseen by Dr. Willis, the Director General of the Health of Animals

Directorate and Canada’s CVO, and by Dr. Gordon Dittberner, Director General of the Veterinary

Inspection Directorate. The Program had a number of objectives. One was directed at the

prevention, control and eradication of diseases affecting livestock including cattle. Other

objectives included ensuring supplies of animal products for export, certification and research, and

to ensure safe importation practices.

The FPIB also contained Directorates for food inspection and plant health, among others.

Within the Animal Health Division was a Disease Control Section in which Dr. Kellar was

Associate Director. There was also an Import/Export Section led by Dr. Claude Lavigne in 1990.

Until 1 January 1991 the ADPA and the Animal Disease and Protection Regulations,

C.R.C. 1978, c. 296, governed AAFC’s regulatory powers over the detection and control of animal

diseases. This included, among other things, regulating the importation into Canada of animals,

feed, hay, fertilizer, manure or “other things” to prevent the introduction of infectious diseases;

and quarantining, segregating or destroying such things when necessary.

The HAA and the Health of Animals Regulations, C.R.C., c. 296, replaced the ADPA in

1991. The long title to the HAA describes it as “An Act respecting diseases and toxic substances

that may affect animals or that may be transmitted by animals to persons, and respecting the

protection of animals.”

AAFC also administered the Feeds Act and the Feeds Regulations, 1983, SOR/83-593,

which controlled and regulated the marketing of animal feed, including permissible ingredients

and labelling. Schedule IV of the Feeds Regulations describes ingredients that are permitted for

use in livestock feed. Only those feed ingredients that have been evaluated and approved by the

Feed and Fertilizer Division (now the Animal Feed Division) may be used in livestock feed

formulations.

In 1997, the FPIB moved, in large part, to a new arms-length agency, the Canadian Food

Inspection Agency (“CFIA”), established by the Canadian Food Inspection Agency Act, S.C. 1997,

c. 6. The Minister of Agriculture is responsible for the overall management and direction of the

CFIA and its operations. The CFIA is responsible for the administration and enforcement of the

HAA and the Feeds Act, and their related regulations, among other legislation.

AAFC also administers FIPA, which is the statute under which Canada provides financial

assistance to the agriculture and agri-food industries.

Canada’s knowledge of BSE: 1987 - 1990

Canadian officials became aware of BSE soon after it became known in the UK. Senior

veterinarians within the Department of Agriculture, and in particular the Animal Health Division,

had close contacts with their counterparts in the UK.

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Dr. Bulmer, the Director of the Animal Health Division, recalled hearing about BSE in

about 1987. It got his attention because of the economic importance of the Canadian cattle industry

and its large export market. He ensured that the Disease Control Section and the Import/Export

Section of the Animal Health Division followed developments relating to the new disease.

Dr. Kellar first learned of BSE when visiting Dr. Wilesmith at the CVL in Weybridge,

England, in 1987 or 1988. Thereafter, Dr. Kellar communicated frequently with Dr. Wilesmith.

Dr. Bulmer confirmed that the department also had frequent contact with Drs. Kimberlin and

Bradley. Dr. Willis, Canada’s CVO, interacted frequently with his British counterpart, Dr.

Meldrum. Dr. Willis also attended OIE sessions as Canada’s representative. Dr. Willis confirmed

at the trial that Dr. Wilesmith and Dr. Kimberlin were “leading researchers and authoritative

voices” on BSE.

Agriculture Canada also maintained close contact with researchers and government

officials in Europe and the United States. This included Dr. Will Hueston of the United States

Animal and Plant Health Inspection Service (“APHIS”) in the US Department of Agriculture

(“USDA”). As well, Canada was a member of an informal “quadrilateral group” which included

the US, Australia and New Zealand, which met to discuss animal trade issues.

Drs. Willis, Bulmer and Kellar followed and kept up to date with leading scientific

publications during this period, including the Veterinary Record, the Canadian Veterinary

Journal, The Lancet, the OIE Scientific and Technical Review, the Journal of the American

Veterinary Medical Association, and others. Dr. Bulmer stated that it was a standing order for

officials in his department to review articles dealing with diseases that could have an impact on

Canada. He also acknowledged, as did Dr. James Hope, a leading British expert on BSE and

Canada’s expert witness at trial, that once an article is published in one of these scientific journals

it becomes common knowledge.

Dr. Kellar was familiar with the reports from the UK during this period, including the

Southwood Report and the Tyrrell Report. He also followed the information coming from the OIE.

There were also visits to Canada by the British experts. On 3 April 1989 Dr. Meldrum

visited Canada and discussed BSE with Agriculture Canada officials. According to notes of his

presentation, Dr. Meldrum linked BSE to scrapie and discussed the problem of the amount of heat

needed in rendering to kill the scrapie agent. Dr. Meldrum discussed cattle offals, and a ban on

ruminant offal in baby foods that had been imposed in the UK at that time.

Ten months later, in February 1990, in a letter to Dr. Willis written on a “personal basis”,

Dr. Meldrum enclosed a copy of the Southwood Report. Dr. Meldrum noted that “[t]he majority

of [the UK’s] findings have now been published in the Veterinary Record.” He confirmed that

epidemiological investigations concluded that cattle “were most probably exposed to the agent of

scrapie via commercial cattle feedstuffs which contained meat and bone meal derived from sheep.”

Dr. Meldrum also explained that certain bovine offals “are the tissues in which the infectious agent

is most likely to be present in cattle which are infected but have not yet developed clinical

symptoms.” He informed Dr. Willis of the recently introduced ban on SBO from cattle more than

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6 months old in human food. Dr. Meldrum wrote that “the action is based on our understanding of

scrapie in sheep.” He concluded his letter as follows:

BSE is, of course, still a very new disease. Our actions have been firmly based on

scientific evidence and advice, but a great deal of research is necessary and is being

undertaken, for example, to determine whether the agent is absent in a variety of

bovine tissues, to study the agent at a molecular level, to develop a diagnostic test,

to determine whether maternal transmission can occur, and to confirm that embryo

transfer carries no risk of transmission of BSE. The results will inevitably take years

to obtain, but will be published when available.

Articles about BSE also appeared in Canadian journals. In September 1989 scientists at the

Ontario Veterinary College in Guelph, Ontario, wrote an article in the Canadian Veterinary

Journal briefly summarizing what was known about BSE. They suggested the imposition of an

import ban on cattle and sheep from the UK, and that “serious consideration should be given by

Agriculture Canada to preventing incorporation of ruminant-derived rendered products into any

animal foods.”

Although not published until 1990, Dr. Kimberlin submitted an article to the Canadian

Journal of Veterinary Research on 5 June 1989, “Transmissible Encephalopathies in Animals”,

which discussed the “prion hypothesis.” This theory, then quite new but now generally accepted,

is that scrapie, BSE, CJD and other transmissible encephalopathies are caused by an abnormal

infectious protein, known as a prion, which is resistant to inactivation processes such as high

temperature, high pressure, and other rendering techniques that ordinarily destroy bacteria and

viruses, and which can replicate itself. TSEs, Dr. Kimberlin noted, have long incubation periods

(often several years) and occur only in the central nervous system. Dr. Kimberlin, who around this

time was succeeded as head of the of Neuropathogenesis Unit in Edinburgh (“NPU”) by Dr. Hope,

wrote that “the transmission of scrapie to cattle (to give BSE) is clearly associated with the

ingestion of contaminated feed.”

Drs. Bulmer and Kellar were both questioned extensively on their state of knowledge of

BSE as of 1990, and of the conclusions in the scientific studies published to that point. They

acknowledged that Canada was aware of the two hypotheses stated by Dr. Wilesmith in his May

1990 article that BSE stemmed from increased exposure of cattle to scrapie from sheep carcasses,

and from increased exposure of cattle to a cattle-adapted scrapie-like agent through rendered cattle

carcasses. Dr. Kellar also acknowledged the concern, known at the time, that due to the long

incubation period animals could be subclinically, or preclinically, infected with BSE and that

infected material could be recycled from cattle.

Dr. Kellar, a veterinary epidemiologist familiar with studying the causes and patterns of

diseases, agreed that epidemiologists must look at all methods of transmission when trying to

prevent entry, or spread, of a disease. He agreed that Agriculture Canada knew of and followed

epidemiological principles, and that in dealing with a disease such as BSE which has a long period

of undetectable subclinical infection, Canada needed to pursue a conservative, precautionary,

approach.

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At trial, Dr. Kellar also agreed that by 1990 Canada was aware of and had concerns about

the cattle imported from the UK that may have been exposed to contaminated feed, as there was a

risk of them infecting the Canadian herd through recycling in the feed chain. At that time, as the

disease was continuing to spread in the UK, the UK could not verify that any of the 182 imports

to Canada between 1982 and 1990 had not been exposed to contaminated feed.

On the other hand, there was also much that was unknown in 1990 about what was then a

novel disease, including whether the source was scrapie or a novel, bovine BSE strain, whether

the infection could be transmitted vertically (maternally) or horizontally, and the amount of

infectious agent that was necessary to pass the disease along, as Dr. Meldrum had noted in his

letter to Dr. Willis of 14 February 1990.

Dr. Meldrum wrote to Dr. Willis again in October 1990. He reported that BSE had been

transmitted to pigs by injecting large quantities of infected brain material, and that the SBO Ban

was being extended to pigs.

In November 1990 Dr. Wilesmith came to Canada and spoke at AAFC offices in Nepean,

Ontario. The meeting was chaired by Dr. Kellar and was intended to give researchers and field

staff direct exposure to the current knowledge of BSE in the UK. Notes of that lecture indicate that

Dr. Wilesmith confirmed that it was an “extended common source epidemic” and the “only

common factor was feedstuffs containing meat and bone meal” which had been banned in the UK.

The notes also indicate that Dr. Wilesmith made reference to the belief that an increase in the

incidence of BSE may have been “caused by recycled affected cattle from the original outbreak.”

By this time the UK had over 19,000 confirmed cases in over 9,000 herds. This amounted to about

one animal in every 250 cows each year with BSE. It was predicted that the incidence should peak

in 1991 and decrease to low levels by 1996.

Dr. Kellar testified that he was somewhat skeptical of the recycling hypothesis, noting that

the increased incidence might also be due to the disease becoming notifiable and the opportunity

to obtain compensation offered under British legislation. At this time, as Dr. Kellar testified, the

focus was on clinical animals which it was believed had a much higher level of BSE prions and

would be more likely to transmit infection than subclinical animals which might be incubating the

disease.

Following Dr. Wilesmith’s talk in November 1990, Dr. Kellar and Dr. Wilesmith had lunch

during which Dr. Wilesmith apparently told Dr. Kellar that a feed ban in Canada would be a

political rather than a scientific gesture, “addressing apparent risk instead of science addressing

real risk.” Dr. Kellar’s evidence was that, having considered the knowledge at the time, he was

“satisfied that [BSE] was a UK problem, not a Canadian problem. All we had of the UK was about

180 animals that had been imported over a period of about 10 or 12 years.”

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Canada’s response to BSE: 1988 – 1990

Certification and permit requirements in 1988

The practice of feeding MBM to animals in the UK dates back to at least 1926, when the

material was recognized in feed legislation. The practice was followed in many other countries

including Canada and the United States. However, it appears from the evidence that considerably

less MBM was included in feed in North America compared to the UK due to the availability of

soybean and other vegetable proteins in Canada and the United States.

In 1978, as a result of concerns surrounding foot and mouth disease, Canada prohibited the

import of MBM without a permit from all countries except the USA. Imports from other countries

had to be specifically permitted by the Minister and could only be issued for countries designated

free from any reportable disease or other serious epizootic disease. In 1988, following the

emergence of BSE in the UK, Canada completely banned the import of MBM from all countries

except the US. It is an agreed fact that Canada did not import RMBM from the UK after 1978.

As in many countries, Canadian cattle producers sometimes imported cattle from the UK

and elsewhere with the objective of improving or enhancing their breeding stock. Since the 1960s,

cattle imported to Canada from the UK and Europe have been subject to extensive testing and

often lengthy quarantines. Import conditions depended on, among other things, Canada’s

knowledge of the conditions that prevailed in the country of origin, and Canada’s knowledge of,

and previous dealings with, the veterinary administration of the exporting country.

As a result of the emergence of BSE in the UK, in 1988 Canada placed additional import

conditions on cattle from the UK. Canada required that cattle be accompanied by a health

certificate issued by a MAFF veterinarian stating, among other things, that no BSE had been

diagnosed in the herd of origin during the 36 months immediately prior to the date of import. In

addition, all UK imports were subject to testing and quarantine on arrival in accordance with the

ADPA and the ADPA Regulations.

Dr. Bulmer agreed that the rationale for the certification requirement was the increased risk

of BSE if an animal came from a herd that had been exposed to contaminated feed, and that Canada

wished to manage that risk. However, he also agreed that, despite the long incubation period of

BSE, there was no follow-up by Canada with the UK to find out if BSE developed in those herds

of origin after the imports had come to Canada.

Import Ban - 1990

By the beginning of 1990, the situation in the UK had worsened and many countries had

banned importation of cattle from the UK. These countries included members of the EEC, the

United States, Australia, New Zealand and Israel.

A memo from Dr. Lavigne to the Minister in January 1990 stated that “[t]he risk of

importing an animal incubating the disease is extremely low.” The memo also advised the Minister

that the “risk of transmitting the disease to Canadian cattle [was] non-existent”, a statement Dr.

Bulmer agreed in cross-examination was not correct, saying that “it would have been better to say

25

it’s a very low risk.” Nevertheless, on 9 February 1990 the Animal Health Division of the

Department of Agriculture determined that it would no longer issue import permits for cattle from

the UK and Ireland. AAFC has the authority to refuse import permits for animals from a country

where a serious communicable disease exists, which was the situation in the UK and Ireland.

A few months later, on 24 May 1990, Canada extended the import ban to all ruminants

from the UK and Ireland. In a telex informing the Canadian High Commission in London of this

expansion of the ban, Dr. Lavigne stated that this step was being taken due to “the need to protect

the health of Canadian livestock and to preserve imported [sic] export markets." Dr. Lavigne noted

the "lack of definitive scientific knowledge of all possible means of transmission of the disease",

and the possibility of transmission between species.

In June 1990, the import ban was extended to bovine serum from the UK.

While the documentation indicates that the decision to impose an import ban was taken at

the departmental level, the impetus for the ban appears to have come from the Minister in January

1990. Dr. Willis testified that the Minister would have been involved in a decision of this

magnitude as it raised trade concerns.

Monitoring Program created - 1990

A memorandum to the Minister on 9 February 1990 informed him of the import ban. It also

stated that 182 cattle had entered Canada from the UK and Ireland since 1982 (168 from the UK)⁷,

and that they would “be monitored for eight years following entry into Canada to ensure that no

evidence of the disease develops.” This followed from the concern that cattle from the UK might

be infected but still be in the incubation period, and therefore did not show symptoms of BSE.

The Monitoring Program was initiated by Dr. W.J. McElheran on 9 April 1990. Dr.

McElheran was the Chief, Animal Imports and Quarantine, in the Animal Health Division. In a

memorandum sent to all Regional Directors of Animal Health, Dr. McElheran provided a list of

the UK imports and asked that they be identified, tagged, and kept under surveillance.

In a follow-up memorandum to the Regional Directors on 29 May 1990, Dr. McElheran

requested information on each animal including the name of the importer and current owner, date

of birth and eartag identification, the animal’s current location and health status if still alive or, if

the animal died, was slaughtered or exported, the date when that occurred. The memorandum also

required “that animals be checked semi-annually and a report identifying each cow be forwarded

… until the animal has spent eight years in Canada.”

The Monitoring Program did not quarantine animals or require that they not be sold,

slaughtered or exported. As Dr. Kellar testified, the purpose was only to monitor the cattle for

clinical signs of BSE, not to keep them out of the food or animal feed chain. Dr. Bulmer agreed

that “the monitoring program was there to detect BSE if it showed up in any of those cattle.”

⁷The precise number of imports and what happened to them varies slightly in the documents and evidence.

26

However, Dr. Willis, the Director General of the Animal Health Directorate and Canada’s CVO,

testified at trial that his understanding of the purpose of the Monitoring Program was to keep the

UK cattle out of the feed chain.

Reportable disease - 1990

On 3 April 1990 the Health of Animals Directorate of AAFC decided that BSE should be

made reportable under the ADPA (subsequently the HAA). This came into effect by Regulation 90-

162 on 21 November 1990.

When a disease is designated as reportable, the HAA requires that any person who owns or

has the possession, care, or control of an animal, is to report to the nearest veterinary inspector the

presence of a reportable disease or any fact indicating its presence in or around the animal. The

obligation arises immediately after the person becomes aware of the presence or fact indicating its

presence. The HAA requires a veterinarian or analyst of animal specimens to report to a veterinary

inspector any suspicion that an animal is affected or contaminated by a reportable disease.

Veterinarians and others involved in the cattle industry were advised that BSE had been

made a reportable disease. AAFC’s Animal Health Division prepared an Animal Health Directive,

AHD-91-01, dated 7 January 1991, which set out the procedure to be followed if a suspect case of

BSE was reported. It directed that staff, practicing veterinarians, provincial laboratory personnel,

and other interested parties were to be advised of this order.

The Mirabel Cattle

Although Canada had said it would honour existing permits when the import ban was

announced, in March 1990 MAFF found a suspected case of BSE on a UK farm from which a bull

had been shipped to Canada. The imported bull was still in post-arrival quarantine in Canada at

Mirabel Airport, together with 13 other cattle from the UK (the “Mirabel cattle”).

AAFC decided that neither the bull nor the 13 other animals still in quarantine at Mirabel

Airport could enter Canada. The animals were incinerated in order to eliminate any risk of

transmission of BSE and the farmers were paid compensation pursuant to s. 12 of the ADPA.

The UK called Canada’s action "draconian and irrational", noting that the animal from the

UK herd with the recent diagnosis had been isolated from the clinical animal. Further, as there was

no indication that BSE was laterally, or horizontally, transmitted, refusing entry of the other 13

animals at Mirabel Airport was, said the UK, "unjustifiable."

As Dr. Bulmer acknowledged at trial, the destruction of the Mirabel cattle was part of a

“zero risk approach” based on “suspicion.” Similarly, Dr. Kellar agreed that Canada was

exercising the “precautionary principle” with the Mirabel cattle. The Southwood Report had not

ruled out modes of transmission other than feed, such as horizontal transmission or from detritus,

and there was, Dr. Kellar said, a need to be “extra cautious.” Dr. Bulmer and Dr. Willis both noted

the need to maintain Canada’s animal health status and international reputation. As one memo at

the time put it, there was a need to maintain and “protect Canada’s lucrative export markets.”

27

Again, as Dr. Bulmer’s evidence confirmed, "the Department was trying to take all steps necessary

to keep this disease out of the Canadian cattle population."

Consultation and stakeholder meetings: 1989 - 1990

The 9 February 1990 memorandum advising the Minister of the import ban and the creation

of the Monitoring Program also stated that “the Canadian cattle industry will be advised through

the established consultation process.”

Since at least the 1970s, AAFC had consulted regularly with industry associations and

stakeholders in the agriculture and food sector. One mechanism for such communication was the

Canadian Animal Health Consultative Committee on Cattle (“CAHCCC”), which had been set up

in the 1970s to consult on a response to brucellosis. The CAHCCC included, among others,

representatives of the CCA, Canadian Dairy Breeds, Holstein Association of Canada, and the Beef

Breeds Council. It met at least annually, usually in the fall “once the harvest was in.”

Mr. Taylor, who had worked for both the CCA and in the Department of Agriculture during

this period, stated that "the primary source of BSE information to CCA members and cattle farmers

in general came from AAFC officials who made presentations at CAHCCC meetings." Dr. Kellar

described the “pyramidal structure” of the CAHCCC as the principal means of disseminating

information to the cattle industry.

Mr. Taylor stated that industry organizations such as the CCA did not have veterinarians

or scientists on staff, and looked to Agriculture Canada for knowledge and expertise regarding

animal diseases, including BSE. Dr. Bulmer agreed that cattle industry stakeholders relied on the

government to take the right actions to control and prevent animal diseases. On the other hand,

Mr. Taylor also agreed that the CCA had a large membership and would retain outside experts

when it thought it needed them.

Even before the import ban, in November 1989, Dr. Maria Koller, who worked with Dr.

Kellar in the Animal Disease Control section, gave a presentation on BSE at a CAHCCC meeting,

noting its symptoms, highlighting that the disease had a long incubation period, that an

unconventional transmissible agent caused the disease, and that feed was the likely source of

infection. It does not appear that Dr. Koller mentioned the possibility that the disease was being

recycled through cattle, noting instead that “with Canada’s sheep population being so small

compared to that of the British Isles, the disease will probably never be seen here.” She also noted,

incorrectly, that the reported case of TSE in mink in the US came from raw sheep offal when, in

fact, the mink had been fed “downer cattle.”

Also in November 1989, Dr. Kellar spoke at a meeting of the National Renderers

Association, which included rendering industry representatives from the UK and the USA, as well

as representatives from the USDA and several other countries. The notes of the meeting disclose

a tension between renderers and the sheep industry due to the concern over BSE potentially

originating from sheep. At that time Dr. Kellar drew a distinction between the UK situation and

the “minimal risk associated with sheep in this country relative to their exceedingly small numbers

28

and the much reduced prevalence of scrapie.” He committed to consulting with the rendering

industry if it is “forced to make a decision in this regard.” In his testimony at trial, Dr. Kellar

described his in-depth knowledge of the rendering industry and its techniques which, in his view,

were effective in eliminating much of the risk of infectious matter being included in animal feed.

He also noted that, in comparison to the UK, “we fed virtually no meat and bonemeal to the great

majority of Canadian cattle.”

In a letter to a rendering company in Vancouver in May 1990 Dr. Kellar discussed why

Canada believed there was “virtually no risk of BSE occurring in the Canadian situation.” He

stated:

If we accept the hypothesis that meat meal from “scrapied sheep”, processed at low

temperatures and fed to cattle caused the outbreak, then the following facts offer

protection to the Canadian herd:

(1) The ratio of sheep to cattle in the UK is seventy-five times that seen in

Canada. As a result, Canada hasn't anywhere near the volume of sheep,

which might possibly carry scrapie, entering its abattoirs or rendering

plants.

(2) Scrapie in the U.K. is uncontrolled. In Canada it is a notifiable disease

and infected flocks are depopulated with compensation following

investigation to determine which animals are at risk of spreading the

disease. This again keeps the level of scrapie that might find its way into

abattoirs or directly to rendering plants extremely low.

(3) We are advised that least cost formulations employed in cattle

supplement derivations virtually exclude meat meal. In the UK, meat meal

did, until recently banned, find continuous use in calf and ruminant rations.

As a result, Canadian cattle are exposed to infinitely less meal than the U.K

cattle which are now exhibiting BSE. In summary, we have less sheep, less

scrapie and less exposure of our cattle to the hypothetically implicated

products.[Emphasis added.]

The 18 June 1990 Meeting

On 18 June 1990 Dr. Bulmer chaired a meeting on BSE for a broad range of stakeholders,

including organizations representing producers of dairy and beef cattle (including the CCA), sheep

and goats, abattoirs, renderers and feed producers. Veterinary organizations, provincial officials

and a representative of the USDA also attended. The meeting was called after the rendering

industry had raised concerns that, due to the link with scrapie, the continued acceptance of sheep

material at their plants could contaminate their operations and jeopardize their markets.

The objective of the meeting was to review and share background knowledge regarding

BSE and the situation around the world, explain Agriculture Canada’s position and response to

29

BSE, and to seek input from stakeholders to identify issues and decide on next steps in addressing

the new disease.

Dr. Koller made a presentation similar to the one she had given to the CAHCCC in

November 1989 reviewing the current knowledge of the disease. Although the slide presentation

did not mention the recycling cattle, participants were provided with a package of material that

included the articles which arose from the international roundtable held in June 1989. This

included Dr. Wilesmith’s paper stating his two hypotheses of the cause of BSE: exposure of cattle

to scrapie through rendered sheep carcasses, and an increase in exposure to a cattle-adapted

scrapie-like agent through rendered cattle carcasses. Also included was the UK update provided

to the OIE General Meeting in May 1990, which referred to the possibility that “some BSE infected

material derived from bovine animals may also have been included in feed for a limited time.”

The recycling point appears to have been recognized during the meeting, as the Minutes

indicate that a representative of the Canadian Sheep Council raised the issue, asking whether cattle

were “at risk of getting BSE from cattle; can cattle offal be the culprit?” The Minutes then contain

a passage in parentheses, stating: “(Note: After the disease appeared in cattle and before the

ruminant offal ban, there was a window of time in the UK where cattle could have been receiving

the agent from two sources: scrapied sheep and BSE cattle, but there is no evidence that infected

cattle are the primary source).” It is not clear if this was stated at the meeting, or added as a note

to the Minutes afterwards.

Dr. Kellar presented Agriculture Canada’s position. He set out what were described as the

“three pillars” of Canada’s position: (i) BSE does not exist here; (ii) BSE cannot enter Canada;

and (iii) BSE will not develop in Canada. As Dr. Kellar acknowledged at the trial, the rationale for

the second pillar was due to “movement restrictions for animals and products”, including the

ruminant import bans from the UK and Ireland, and the Monitoring Program. The three pillars

were repeated in consultative documents over the next few years. According to Dr. Willis, these

were “talking points” rather than a policy, and were intended to reassure the industry that Canada

was taking steps to try to prevent BSE from entering and developing in Canada.

The focus of the 18 June 1990 meeting was on the potential for the development of BSE in

Canada as it had originated in the UK, which Agriculture Canada viewed as extremely unlikely.

As a summary document prepared by Dr. Koller and distributed at the meeting stated:

The factors believed necessary for the transmission of the infection from sheep to

cattle (a large sheep population where infection with scrapie is common resulting

in large amounts of infected material going to rendering plants, a continuous low

temperature rendering process and the widespread incorporation of rendered animal

origin protein supplements in calf feeds) exist in the United Kingdom but not in

Canada. Unlike the United Kingdom, Canada has a scrapie control program which

maintains this disease at a low sporadic level in our small sheep population. While

many rendering systems in the United Kingdom use a low temperature process, the

temperature processes of registered rendering plants in Canada have been reviewed

for this concern and low temperature processes are not used. The manufacturers of

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the calf and cow feeds used in Canada incorporate virtually no animal proteins into

their products. [Emphasis added.]

Dr. Kellar’s presentation also addressed the risk of BSE emerging in Canada in the same

way that it was thought to have emerged in Britain. Prior to the meeting, he had done an informal

qualitative assessment of the risk of BSE developing in Canada as compared to the UK based on

sheep to cattle ratios, the degree of MBM used in ruminant feed and scrapie distribution. He

estimated that the risk was 1/30,000 that of the UK, although this number was reduced to 1/10,000

in other documents. This calculation was based on a number of considerations, including the much

smaller sheep population in Canada compared to the UK (approximately 700,000 versus about 40

million), the much larger ratio of sheep to cattle in the UK, and the very low incidence of scrapie

in Canada compared to its prevalence in the UK.

The Minutes of the 18 June 1990 meeting indicate that there were presentations by food

safety and feeds personnel at Agriculture Canada, representatives of feed, rendering, and

producers’ associations, as well as provincial government representatives and the USDA.

A representative of the Canadian Feed Industry Association, which represented 95% of

livestock feed manufacturers, spoke at the meeting. He noted that only small amounts of animal

protein were used in ruminant feeds; a small market share may have 5-10% animal protein, or

MBM, in their supplements, and that “premixes” may have less than 0.5% in their final product.

No MBM was included in milk replacer feed. He also noted that MBM can include protein from

cattle, swine, sheep and goat.

The rendering industry described its processes, receiving between 25% and 40% of the

weight of slaughtered sheep and cattle, about 25% of which is reduced through heat and other

techniques to protein, which is sold mostly to feed producers. The rendering industry is therefore

subject to the demands of the feed industry. It expressed concern that the temperature and pressure

believed necessary to sterilize for BSE would “denature the protein, destroying the value of the

product.” About 100,000 tons of animal protein were produced each year. In his evidence, Dr.

Kellar commented on the different rendering techniques in Canada compared to the UK, and that

given the “handful” of UK imports, there would be a “tremendous dilutive effect.”

The CCA is reported as having indicated that it wanted the ban on the importation of live

ruminants to remain in place, but otherwise stated that it was “important that all stakeholders work

together to resolve the concerns rather than lay blame at anyone’s feet.”

Mr. Taylor, who was with the CCA in 1990, testified at trial that the beef industry was not

interested in a feed ban at that time, as it would have imposed additional costs on beef producers

which would have put them at a disadvantage with their US competitors and upset the integrated

market. Mr. Taylor agreed that the industry was “strongly opposed” to it in 1990, and would have

remained opposed for the same reasons until the call for a ban by the WHO in 1996 and both

Canada and the United States imposed them at the same time.

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The Minutes of the 18 June 1990 meeting contain a list of “recommendations for

consideration” arising from the discussions. The recommendations were grouped under each of

the three pillars as recommendations to “support” the position stated in that pillar. Dr. Bulmer

described these as joint recommendations of both industry and Canada. The recommendations

could not be attributed to specific stakeholders because, according to Dr. Kellar, the process was

“one of a consensual contribution of these items to the flip charts and their triage into the three

pillars of Canada's position.” Handwritten notes by Dr. Bulmer on the Minutes reflect that many

of the recommendations were already in effect or in the process of being implemented. However,

for some he wrote “park”, to be set aside for consideration later.

One of the “Recommendations for Consideration to Support the Position that BSE will not

Develop in Canada” was to discontinue the inclusion of RMBM in ruminant feeds. The Minutes

noted that “[i]n the current situation stopping ruminant to ruminant feeding could be done quietly

with minimal impact because only 5% of red meat meal goes to ruminant feeds? This would,

however, destroy development of the market for ‘by-pass proteins’.” The recommendation then

asked “What is current market share of ruminant offal to ruminant feed?” Next to this Dr. Bulmer

wrote “Park.”

At a meeting 10 days later, on 28 June 1990 involving representatives of the rendering,

sheep and feed industries, it was agreed that sheep offal and “animal protein” could continue to be

used in animal feed.

Minutes of an internal meeting of the FPIB held on 23 July 1990 indicate that the Health

of Animals Directorate was continuing to focus on scrapie as the issue of concern, stating that

“BSE cannot occur in Canada because there is no risk of scrapie transmission from Canadian meat

and bone meal originating from government inspected facilities and Agriculture Canada is

prepared to work with all of the involved industry sectors to certify that fact.”

Subsequent meetings and positions taken: 1990 - 1992

In November 1990 a meeting of the CAHCCC was held. Although a “BSE Update” was

on the agenda, it was not reached at the meeting. However, a handout prepared by Dr. Koller was

distributed, largely restating what was provided in June 1990. It also made reference to “active

surveillance being instituted.” The handout contained the following:

Statement by Agriculture Canada on the issue is:

"There is no risk of scrapie transmission from Canadian meat and bone meal

originating from government inspected facilities and Ag Can is prepared to work

with all of the involved industry to verify that fact in the very near future."

As was the case with the presentation in June 1990, there was no specific mention of the

potential risk of infection from recycled cattle carcasses.

At the end of January 1991, Dr. Koller gave a presentation on BSE to the Ontario

Veterinary Medical Association. Her written presentation, which had been reviewed by Dr. Kellar,

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repeated the view that BSE originated from scrapie-infected sheep and that in light of the low level

of scrapie in Canada and different rendering conditions, “the factors necessary to produce an

infective dose of scrapie agent and transmit it to cattle, do not exist in Canada.”

The consultations with industry were reported to the Minister of Agriculture. In a paper

initially drafted in September 1991 and finalized in November 1991, AAFC’s position on BSE

was set out for the Minister. It noted that there were several cases of BSE in Oman, Switzerland

and France. The paper described the suspected origin in scrapie and stated that “relative to all the

animal tissues that enter the rendering process, scrapie infected material is present at a rate

approximately 1,000,000 time higher in the United Kingdom than in Canada.” The paper noted

the relatively small sheep population in Canada and the very low incidence of scrapie in just a

handful of flocks.

The paper also noted that Canada had different rendering processes than the UK, and the

use of MBM in animal rations differed as it was considerably higher in the UK, particularly among

UK dairy cattle. Accordingly, the paper observed that any infectious material that might be

destined for MBM would be diluted significantly. As the paper stated: “beyond the very small

amounts of infected material that go to rendering and the further reduction during the rendering

process, any infectious agent that survives in meat and bone meal in Canada, is further diluted by

a low level of incorporation into ruminant rations.”

Based on this focus on scrapie, the “issue in Canada” stated for the Minister was not BSE

in cattle but “one in which the rendering industry, as it seeks to preserve and expand markets for

meat and bone meal, may cease its recycling of sheep offal.” If that occurred, the paper stated that

“most abattoirs will discontinue killing sheep” which would have repercussions for the sheep-

rearing industry. It reported to the Minister that consultations had been held with industry and a

“consensus” was reached to continue to permit sheep offal and animal proteins in animal feeds.

The paper made no reference to the risk of BSE transmission through the recycling of cattle that

might be infected.

The report of the CAHCCC meeting of 17 October 1991 does not mention BSE, although

there was a presentation on the development of risk analysis approaches to importation of animals

and animal products.

In December 1991, Dr. Wayne Stadder, Chief of Import/Export of Animal Products and

By-Products wrote a memo titled “Emerging disease trends.” It referred to BSE and its likely

origins in scrapie, but also stated that “[l]ater in the outbreak this was augmented by BSE affected

cattle.” The memo reviewed the import restrictions in place and stated that the basis for them “is

to preclude the importation of potentially infected tissues which during processing would be

discarded and enter the animal food chain through the rendering process.”

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In November 1993 the CAHCC met.⁸BSE was not specifically on the agenda, although

minutes of the meeting indicate that Dr. Kellar reported that it was on the decline in the UK.

USDA position: 1990 - 1991

In November 1990 APHIS published a Fact Sheet on BSE. Like Canada, at this time no

BSE cases had been seen in the United States. In describing the history and background of BSE,

the Fact Sheet stated that “some scientists” believed that BSE emerged in the UK from the feeding

of bone meal or animal protein from the carcasses of scrapie-infected sheep, likely due to a

“significant increase” in the UK sheep population beginning in 1980, “with a possible increase in

the prevalence of scrapie-infected flocks; the greater inclusion of sheep heads in material for

rendering; the greater inclusion of sheep in material for rendering, stemming from a reduction in

the number of knackers’ [deadstock] yards; and… changes in the rendering process.” It was noted

that the infectious agent was termed a “prion” which is “unusually resistant to heat and normal

sterilization processes.”

The paper noted that 462⁹cattle had been imported to the USA from Great Britain between

1981 and 1989 when the US import ban was implemented. As of October 1990, however, only

“279 of those animals had been accounted for”, unlike the much more comprehensive tracing of

UK imports in Canada.

In January 1991 APHIS published a “Qualitative Analysis of BSE Risk Factors in the

United States.” Like AAFC, the American regulators looked at the origins of BSE in the UK and

compared it to the risk of a similar development of BSE from scrapie in the USA. The APHIS

analysis considered differences in the relative sizes of the cattle and sheep populations, observing

that, compared to the United States, “[t]he United Kingdom has 4 times as many sheep and 3 times

as many mature sheep on a land mass smaller than the State of Oregon.” The ratio of sheep to

cattle was 32 times greater in the UK. It also noted the prevalence of scrapie and farmed sheep in

the UK, compared to the US. The report also observed that much more sheep material was used in

MBM in the UK than the US, and that, overall, there is much more MBM generally in UK feed

than in the US. Noting the differences in sheep population, limited incidence of scrapie in the US,

and “an abundance of plant based proteins” in the US such as soybean that is used in feed and

differences in rendering processes, it concluded that there were large differences in the risk factors

which “greatly reduce the potential risk at the national level.” As Dr. Kellar said at trial of this

document: “It’s the Canadian context all over again,” and it did not cause him or AAFC to revise

their approach.

The following month, in February 1991, APHIS published another report titled “Risk

Analysis of Introducing BSE in the United States.” It largely repeats and summarizes information

8

The third “C” was dropped to reflect the inclusion of producers of livestock other than cattle in the consultation

process.

⁹The Agreed Statement of Facts puts the number higher, at approximately 499 animals.

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from the January 1991 paper in concluding there is a low risk of BSE developing in the US. Neither

document mentions the concern about recycling of BSE in cattle.

Canada’s amendment of the Feeds Regulations in 1990

In January 1990 Canada passed amendments to Schedule IV of the Feeds Regulations to

permit certain “Animal Meat By-Products Fresh” to be included in animal feed: SOR/90-73. Meat

by-products are the non-rendered, clean parts, other than meat, derived from mammals slaughtered

for meat production. Although the Regulation does not say so, the evidence was that this “fresh

meat” was only fed to mink and foxes, not to cattle.

The addition of "Animal Meat By-Products Fresh" to Schedule IV of the Feeds Regulations

was first proposed on 18 November 1985. The addition was approved as a feed ingredient from at

least 19 December 1986. A feed ingredient, once reviewed and approved as safe and efficacious,

and added to Schedule IV of the Feeds Regulations, is not reviewed again unless there is doubt as

to its safety, or improper use is suspected.

Rendered MBM, including RMBM, had been permitted in feed in Canada, the US and

elsewhere for many years and continued to be permitted in the 1990 Regulation. However, any

single ingredient added to Schedule IV after the promulgation of the Feeds Regulations would

have undergone a safety and efficacy assessment before being approved. The nature of the

assessment and the type of information required for registration would depend on the particular

ingredient and the potential risks that might be associated with that ingredient.

As the inclusion of "Animal Meat By-Products Fresh" was approved in 1986, BSE and the

continued inclusion of RMBM would not have been considered at that time. Although by 1990

scientific evidence, of which Dr. Kellar and others were aware, was emerging that transmission of

BSE occurred through RMBM in feed, Canada conducted no review or safety assessment of the

inclusion of RMBM prior to amending the Regulation in 1990.

Canada’s regulatory expert, Mr. Presley, agreed that the amendments passed in 1990 were

“substantive changes” that were required to be “critically reviewed” for “a full assessment of their

impact by the Treasury Board Secretariat, and were not mere “housekeeping” changes.

Surveillance program: 1991 – 1992

In 1991 a proposed protocol for BSE surveillance was circulated by AAFC to Animal

Health Division staff for comments. This led, in 1992, to the implementation of a national BSE

surveillance program. Unlike the Monitoring Program which involved tracking the UK imports

and monitoring them for clinical signs of BSE, the surveillance program addressed the preservation

of tissue and testing to be done on any animal that exhibited signs of BSE. As Dr. Kellar noted,

the clinical signs for BSE are the same as those for bovine rabies which “we saw every second day

in Canada” and required testing; the protocol in the surveillance program required further testing

if there was a negative diagnosis of rabies.

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Science on BSE continues to evolve: 1991 - 1993

Dr. Wilesmith, Dr. Kimberlin and others in the UK and elsewhere continued to study BSE

and its transmission, and reported on it in veterinary and scientific publications which were

followed by Dr. Kellar and others at AAFC.

In December 1991, Dr. Wilesmith published an article on the epidemiology of BSE which

continued to articulate the sheep scrapie hypothesis. He observed that the greater incidence of BSE

in dairy herds in the UK due to their reliance on concentrate feed meant that the “risk of animals

becoming infected in beef suckler herds is remarkably small.” Dr. Kellar found this significant as

75% of the UK imports to Canada were beef cattle, not dairy. Almost all BSE cases in the UK

were in dairy cattle, not beef, due to the greater use of protein feed supplements in dairy herds.

In the same month, Dr. Wilesmith, Dr. Hueston and others published a “Comparison of

bovine spongiform encephalopathy risk factors in the United States and Great Britain.” After

refering to the potential for transmission from imported cattle carrying BSE, and noting that there

had been approximately 459 cattle imported from the UK to the US in the previous ten years, the

paper stated that “[t]he potential risk of BSE attributable to imported cattle appears to be small.”

Two months later, in February 1992, Dr. Wilesmith, Dr. Hueston and others published a

paper containing “epidemiological observations” about BSE in Northern Ireland. Of 304 cattle

imported from Britain between 1981 and 1984, four animals had developed BSE, most likely from

feed consumed before moving to Northern Ireland. The paper concluded that, while the imported

animals “cannot be disregarded completely as a possible source of infection…given the small

number of animals it is unlikely that they could have provided sufficient exposure through meat

and bone meal” to be a source of infection. Dr. Kellar took comfort from this as well, noting that

Northern Ireland had a cattle population “likely not even 10% of that in Canada” but with numbers

of imports that entered slaughter likely 5 times as high.

The OIE published a lengthy paper by Dr. Kimberlin in May 1992. Dr. Kellar agreed this

work was the “definitive” statement of the science of BSE at that time, incorporating the findings

of Wilesmith, Wells and Bradley, among others. It was a “guiding light” to the OIE, Dr. Kellar

said.

In his paper, Dr. Kimberlin reviewed the likely source of BSE from scrapie. He also

discussed the recycling of infection in cattle, noting that a “driving force” of the epidemic in the

UK was that cases were “amplified by the subsequent recycling, via meat-and-bone meal, of

infected cattle material within the cattle population. … Given the length of BSE incubation

periods, recycling would have established the pattern of the epidemic long before BSE was even

recognised.” Dr. Kimberlin noted that the evidence suggested that the average dose of infective

material was “extremely low” and that the “main effect of recycling” was to increase the number

of batches of MBM to a threshold sufficient to infect.

With respect to trade in live cattle and reducing risk from imports, Dr. Kimberlin stated:

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