We'll start the meeting. We call this to order.
Welcome to the fourth meeting of the Standing Committee on Agriculture and Agri-Food.
Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. The proceedings will be made available via the House of Commons website. So you are aware, the webcast will always show the person speaking, rather than the entirety of the committee. Screenshots or taking photos of your screen is not permitted.
Colleagues, I'll just quickly outline some of the procedures before we get started.
Of course, if you want to speak, the clerk and I will be liaising between the groups in hybrid mode. Those on Zoom will be raising your hand, and those in the room will perhaps be signalling to the clerk that you wish to speak.
Of course, we are still abiding by the health protocols that have been set by the Board of Internal Economy for those who are in the room. I know the clerk will work with me to ensure that those are enforced.
This is a reminder for those who are online to use their House of Commons certified microphone for the benefit of our translators.
This is another reminder that all comments by members and witnesses should be addressed through the chair.
First of all, members, I would like to ask the committee to consider the adoption of the budget for the study of the agriculture and agri-food supply chain. You have all received this by email. It covers costs related to the meeting moving forward.
This is very procedural, but do I have agreement for us to adopt that budget?
Some hon. members: Agreed.
The Chair: Seeing consensus, Madam Clerk, I think we're good.
Colleagues, I would like to move forward. For the benefit of our witnesses here, I have a few comments.
For interpretation, you have the ability to toggle between English and French. When you're not speaking, please make sure that your microphone is on mute.
Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, January 31, the committee is commencing its study of the agriculture and agri-food supply chain.
I would now like to welcome our witnesses for our first panel. With us today by video conference, from the Department of Agriculture and Agri-Food, we have Tom Rosser, who is the assistant deputy minister for market and industry services branch; and Justine Akman, who is director general for the retail and consumer task team.
Up to five minutes will be given for opening remarks, after which we will proceed to rounds of questioning.
We go over to you for five minutes.
Let me just begin by saying that it's always a pleasure to have the opportunity to appear before this committee and try to contribute to the work that you do.
As you know, Mr. Chair, I am pleased today to be joined by a colleague from the department, Justine Akman.
I thank the committee for undertaking this study. It is an important step to supporting the long–term stability and resiliency of Canada's agriculture and agri-food supply chain.
As this committee is aware, the agriculture and agri-food supply chain touches all Canadians and communities, including a vast array of stakeholders from producers, to processors, food retailers and wholesalers, consumers and all of the input and service suppliers that support them.
Despite significant disruptions and challenges caused by both the pandemic and extreme weather events like the B.C. floods over the past two years, Canada's food supply chain has demonstrated that it is highly adaptable and resilient.
It continues to provide Canadians with reliable access to food while maintaining healthy economic growth, despite these significant challenges. For example, early in the pandemic, primary producers quickly modified their practices to meet new health and safety directives on farm. Food retailers and food service pivoted with regard to evolving demands from consumers.
Having confidence that our food supply chain is reliable and can contribute to deliver is critical for international and local consumers.
With this in mind, since the beginning of the pandemic, Agriculture and Agri-Food Canada has been working diligently to ensure that Canada's food supply chain functions properly for all Canadians.
We have established the Food Sector Network, co-chaired by AAFC and industry, to ensure that we can collectively monitor challenges experienced by the sector in real time and have better foresight into future emergencies.
In part due to this dialogue, early on in the pandemic a number of new programs were launched by AAFC, including the emergency food security fund and the surplus food rescue program.
More recently, $228 million was announced for the Canada-B.C. food recovery program for food security, which will be delivered by the province, and leverages the federal government's AgriRecovery framework and disaster financial assistance arrangement.
In addition to AgriRecovery, producers have access to a suite of business risk management programs to help them manage significant risks that threaten the viability of their farms, and they are encouraged to sign up for the AgriStability program, which can help farmers cover severe drops in farm income.
Moving forward, there is also an opportunity to ensure that key supply chain challenges are reflected in the Canadian agricultural partnership as we work with provinces on the next framework agreement, but there's no doubt that supply chain resiliency will require a coordinated whole-of-government approach. For this reason, it has been identified as a priority in the mandate letters of multiple ministers and included in commitments to strengthen supply chains.
AAFC's mandate provides for the development of a sector-specific agricultural labour strategy to address persistent and chronic labour shortages in farming and food processing in the short and long term. This strategy will be developed over the next year with the support from the , and in partnership with provinces and territories, employers, unions and workers.
As part of our collective efforts, AAFC is also committed to supporting the in leveraging investments from the national trade corridors fund to develop a national supply chain strategy, which will aim to address key transportation bottlenecks and improve system-wide efficiency and fluidity through increased collaboration.
While we discuss the performance of our supply chains, it is important to remember that we operate in a global context. Throughout the pandemic, there has been growing pressure on supply chains, particularly for containers, leading to significant congestion and increasing costs.
Severe disruptions throughout the COVID-19 pandemic have also driven the United States to take a number of actions to explore and build more resilient supply chains. The U.S. Department of Agriculture recently completed an assessment of their supply chain, including for agriculture commodities and food products, and will release the report later this month.
Canada can look to leverage this work to bolster supply chain resiliency in a coordinated and complementary way with our U.S. counterparts.
In summary, the recent events related to the pandemic and B.C. floods have demonstrated the resilience of Canada's food chain, but have also shown us areas that will need to be supported and strengthened as we work at our next steps to improve its resilience.
Thank you again, Mr. Chair.
Ms. Akman and I will be happy to take your questions.
Thank you very much, Mr. Chair, and thanks Mr. Rosser, for making time. It's always good to see you and get your insight.
Certainly, as we go into this study about the supply chain, I think we all would agree that your supply chain is only as dependable and as strong as its weakest link. Right now, we certainly have a number of those links that are showing cracks. I guess I would also argue that now is not the time to be adding additional irritants to that supply chain.
The one topic I wanted to start off with today, Mr. Rosser, is the cattle industry. Certainly we are seeing some issues with transportation of cattle and feed. The cattle industry is also asking for the enforcement, however, of what I would argue are very unscientific new animal transport regulations to be implemented by the government.... We're seeing that those are supposed to be coming into effect on February 20.
They are asking for that deadline to be pushed back, as these new rules may cause more issues with animal welfare, and certainly with transportation issues. Is there any discussion taking into account the current situation and status of our supply chain to push that deadline further down the road until we have more time to ensure that the resources and infrastructures are in place to meet those requirements?
I would concur completely with the member that we are seeing a period of heightened stress from a whole variety of sources on our supply chains.
I understand that the committee will be hearing shortly from representatives of the cattle sector, who can offer their perspectives to you first-hand. We've been in active dialogue with them on some of their concerns around feed. I know they've made statements regarding issues at the Canada-U.S. border and, particularly, the Coutts crossing. We have been in active dialogue with them for some time on the Health of Animals Regulations, to which the member referred. My recollection is that the cattle association is undertaking some research to help support that dialogue.
The regulations are the responsibility of the Food Inspection Agency, so I'm reticent to comment in detail. However, the Food Inspection Agency, throughout COVID, has looked for opportunities to show regulatory flexibility, where it can, to alleviate supply chain shortages.
We are in active dialogue with the cattle sector.
There's no question that labour is a long-standing issue for agriculture and agri-food stakeholders.
There's been an increasing urgency to the dialogue. Food and Beverage Canada and many of the member companies have been in dialogue with departmental officials and with the , as well, in recent weeks about some of their ideas, for both the short and the long term, to rectify the situation.
This committee addressed the labour issue in some of the recommendations from its report from last June, if I remember correctly. As the member noted, the is mandated to create a labour strategy. We welcome input from this committee and stakeholders on that.
I would note, as well, the announcement from last month about lifting the cap on the use of temporary foreign workers by a facility to 20% in Quebec. There have been some nearer-term measures. We're very open to ideas, both short- and longer-term, and more active dialogue around that.
Hello, chair and committee. I'm very happy to join you for the first time in my new capacity.
I might add that my new title has been changed very recently to director general of supply chains, so it just sort of emphasizes the importance of supply chains in our department and taking a very serious look at these issues.
Just to add to what Tom said, the way we think about these issues is that there are urgencies, as you're all well aware, but there's also looking at the issues more medium and long term. Some of the issues are very long term, protracted issues, including temporary foreign workers.
Just to add a couple of things, early on in the pandemic, there was a $330-million emergency food security fund, the $50-million surplus food rescue program, and then in budget 2021, some of these programs were topped up: $140 million to the emergency food security fund and the local food infrastructure fund as well as the $57-million fund for temporary foreign workers and the need to quarantine.
There have been very different responses all along the way during the pandemic, and now, as Tom mentioned, with the supply chain summit hosted by the transport minister recently, our minister participated very actively. There will be follow-up meetings as well to engage stakeholders on solutions more into the medium and long term.
Good afternoon, everyone.
I thank the witnesses, Mr. Rosser and Ms. Akman, for joining us.
As the study on the supply chain is extremely broad, we have tried to decide which aspects we wanted to go explore further. One of the things we are hearing people talk about the most on the ground is the severe labour shortage.
Every time we meet with stakeholders from the food processing sector, they tell us that up to 25% of their positions are vacant. They have submitted concrete proposals to us, one of which concerns an emergency plan for the temporary foreign worker program.
Have you seen that plan? Are you seriously considering those kinds of options?
Thank you for your answer.
I am putting a bit of pressure on you. We are counting on you to implement measures quickly because industry really needs that.
Before we began the study, committee members identified a second important factor—fluctuating input costs. The workforce is directly related to that because cost increases are often due to longer time frames, which, in turn, are due to labour shortages. This is happening in the food processing industry, but also in trucking and agriculture. It is actually happening across the board.
Various measures could help—for example, measures to facilitate access to permanent residence for people working in the sector who want to bring their family to Canada.
I would like to hear your thoughts on that.
Mr. Chair, I thank the member for a really thoughtful question. I'll offer a couple of very quick thoughts and then perhaps turn to Justine.
Yes, absolutely, I think I referenced our dialogue with the U.S. on supply chains, and certainly one way to make the supply chains more resilient is to shorten them. There may be some opportunities to do that.
I would note as well—and Justine may be able to speak to this—that when we look at supply chain resilience, where vulnerability tends to be greatest at the community level is in smaller and more remote communities, so those situations, too, might present the greatest opportunity to strengthen resilience by shortening supply chains and increasing local supply. As a department, we are involved in some pilot-level projects in communities like Gjoa Haven and others to try to help individual communities toward that end.
Justine, do you have something to add to that?
Thank you for your thoughts and the work you're doing on this. I would, of course, second what has been said about barriers to interprovincial trade and that having more “made in Canada” products being able to go across borders would be great.
On that point and the good Saskatchewan protein, I'd also add, as a vegetarian, plant protein is a great product. We've had that supercluster in Saskatchewan. A lot of work has been done there. As I mentioned in the House the other day, one of my favourite products is the Three Farmers chickpeas.
We have a new food guide. We have been putting the emphasis on products that are more environmentally sustainable and that can be probably not as subject to a lot of the difficulties in the supply chain, such as perishable foods, and I would add, animal welfare concerns.
Is anything being done in Agriculture and Agri-Food to promote the new food guide we have? Well, it's not quite that new anymore. Is anything being done to promote that food guide to try to encourage people to have more plant-based foods and to incorporate that when we're talking about our supply chains and just our overall resilience?
Thank you so much, Chair.
We've covered supply chain issues for what seems like a good two years now. Our agriculture committee was one of the few that was operating in the early days of the pandemic. Of course, we produced a pretty substantive report on processing capacity in the previous Parliament.
Mr. Rosser, we did hear a lot of witness testimony about how centralized our slaughter capacity was, especially in meat-processing plants such as big multinational companies like Cargill. We talked a lot at this committee about programs like the local food infrastructure fund, and certainly many a witness has asked that the federal government step in more to provide the necessary capital so that we can have a more decentralized approach.
I'm stepping into the committee midstream here, so you may have answered this question before, but perhaps you could humour me and give me an update on what efforts AAFC is making for a decentralized approach to our slaughter capacity, just to make sure that we can withstand these types of disruptions in the future.
Thanks again to our witnesses for being here and for giving us good information.
Mr. Rosser, I want to go back to the sector engagement tables. My concern here, I guess, is that we've taken a program and the value chain round tables and replaced them with something that isn't nearly as meaningful. Look at the names of these sector engagement tables—agile regulations, sustainability, consumer demand and market trends, and skills development. Nothing in there talks about what is actually the key issue we're talking about here, and that's the supply chain.
I asked you before, and I really didn't get an answer; I'm just curious to know whether one of these engagement tables will actually be addressing the supply chain issue. If so, can you tell me which one? Which stakeholders have they asked to be engaged in that process?
Yes, I forgot to mention automation, which is something we have studied previously. I appreciate that.
I would be remiss if we didn't mention those border crossings. You mentioned the border crossings, the blockades that are happening in Alberta with the cattle industry and feed not getting there. Also you mentioned Windsor, which affects our greenhouse sector, and I think you said pork, and fertilizers and other inputs. You did also say that we're heavily dependent on inputs for fruits and vegetables, especially in winter. I understand we have a just-in-time system.
Trying to stay on top of that issue, these orders are being cancelled. It sounds like these border interruptions are going to start affecting grocery shelves. Can you tell us more about how long we have before the interruption of food from these blockades is going to actually be seen for consumers?
To our witnesses, Ms. Akman and Mr. Rosser, thank you on behalf of the committee for being here.
We're going to move to our second panel.
Colleagues, please don't go far because this is going to be a quick transition, and we're going to get right into the second panel. Just hold tight, and we're going to get rocking and rolling.
The Chair: That was a very quick transition.
Thank you to all our witness, and indeed, our clerk and our wonderful team in the room making this happen.
We'll start with the second panel, and today we're fortunate to have a number of witnesses who are joining us by video conference.
First, from Agri-Food Innovation Council, we have Serge Buy, who is the chief executive officer. From the Canadian Cattlemen's Association, we have Bob Lowe, who serves as the president; and Fawn Jackson, who is director of policy and international affairs. From Food and Beverage Canada, we have Kathleen Sullivan, who serves as the chief executive officer.
We're going to have five minutes for opening comments.
I'm going to start with you, Mr. Buy.
Thank you very much, Mr. Chair. Good afternoon.
All parts of the agri-food supply chain are facing challenges that predate the pandemic. Food production is impacted by diseases, pests, weather-related events—think of the drought in the prairies in 2021 and the fires, then the floods in British Columbia—workforce availability, capacity to adopt new technologies, etc.
Processing and packaging are also impacted by the lack of an available workforce, a lower adoption of new technologies than some international competitors and, during the pandemic, challenges to adapt to new needs. We have seen strikes, blockades, floods, fires and other events have an impact on logistics.
Distribution is facing its own challenges that are also related to the lack of an available workforce.
Others, very competent witnesses, will focus on regulatory, financial and workforce availability issues. The Agri-Food Innovation Council would like to concentrate on the role that research and innovation can play to solve some of our supply chain issues.
Thanks to research and innovation, we have developed crops that are hearty in our cold climate, as well as resistant to some pests and diseases. Examples of those exploits include canola, which now represents close to $12 billion in exports. On the other side of the spectrum, we've also developed new varieties of vines, despite minus-30-degree weather. I'm sure Mr. Drouin will invite all of you to visit Stonehouse Vineyard near Alexandria, one of the newest wineries that produces great wines.
We all know that the weather is changing. While it can be slightly awkward to speak about global warming as most of us are still shovelling snow—well, maybe not Mr. MacGregor—it requires us to prepare for events and diseases that will continue to impact food production in Canada. The 4DWheat project, supported by Genome Prairie and Ontario Genomics, as an example, is looking at enhancing yield and managing risk from important diseases.
We also need to focus on making Canada more self-sufficient, thereby addressing food security. Food prices are increasing and fruits and vegetables are becoming more expensive, leaving segments of our population unable to provide healthy choices to their families. As an example, investing in technology to make vertical farming produce more, sustainably, and at lesser costs is one of the ways we can address this. Increased local production will also diminish strains on the system. Far be it for me to suggest that we'll start producing and exporting pineapples from Nunavut, but can we provide various communities the ability to produce the food they need at a decent cost? I applaud the initiative announced Tuesday by the Weston Family Foundation to invest over $33 million in developing innovation hubs to look at growing vegetables and fruits year-round in Canada.
On processing and packaging, it is important to continue to invest in robotics, artificial intelligence and big data systems. That is crucial for the future of the sector. Logistics also have major challenges, from the use of spreadsheets to analyze the routes to a reliance on 19th century transportation models. The sector will benefit from research and innovation that modernizes its operations. We are seeing drone deliveries of food, medication and PPE to rural and remote regions in Canada.
We're pleased to see large companies, such as telecoms, getting involved. Telus is an example of a telecom that moved efficiently into the agri-food space by launching Telus Agriculture to provide solutions. Professor James Nolan, a professor at the University of Saskatchewan, indicates that the use of quantum computing would increase efficiency in logistics, while at the same time raising concerns about affordability of the technology. We should also research this.
We need a coordinated approach to deal with today's challenges and address tomorrow's problems. AIC, supported by dozens of organizations, has called for the development of a national strategy on agri-food research and innovation. The effort should be co-led by governments and industry and focus on a few tangible, achievable objectives with measurable results in a tight timeline. A broad strategy will enable a proactive approach to some of today's challenges and enable us to avoid some of tomorrow's crises.
Thank you. I will be pleased to take questions in English or in French. Merci.
As you mentioned, I'm Bob Lowe. I'm a beef producer in southern Alberta and also the president of the Canadian Cattlemen's Association. With me is Fawn Jackson, our director of policy and international affairs.
Thanks for inviting us to discuss the supply chain challenges in Canada's beef sector, and to identify potential solutions to build resiliency by working together as industry and government.
With the start of the COVID-19 pandemic, we knew there would be global supply chain disruptions. We were encouraged to see the Government of Canada recognize agriculture as an essential service to ensure the continued flow of goods across Canada and internationally.
While the sector has over the last three years performed remarkably well under the circumstances, the combination of the pandemic and severe weather has identified areas that need to be further strengthened for long-term resilience. Supply chain challenges have included a lack of redundancy in processing capacity, shortages of labour, major trade route interruptions and supply chain impacts due to severe weather such as fire, flood and drought.
If we can learn one lesson from the last three years it's that investment in resilient infrastructure; quick, responsive emergency programs; and a prioritization of trade are critical to long-term resiliency. Our sector has identified key investments that will help build resilience to current and future stresses.
Investment in labour is needed across agriculture and industries that transport agricultural goods. The global market for Canadian agricultural products is expanding rapidly, but persistent labour challenges are jeopardizing its growth potential as well as its resilience in the face of challenges such as COVID-19.
In 2017, 16,500 jobs went unfilled in our sector, which cost us $2.9 billion in lost revenues. In every province and across every commodity, labour shortages impact today's production levels and resilience in supply chain for tomorrow's growth potential.
I mentioned the global market above. We are a trade-dependent industry exporting 50% of what we produce in the beef sector. We need to be able to get our products to market, but also to import products when faced with challenges such as processing capacity. When we've had trade interruptions they've had some of the biggest impacts on our resilience as a sector and thus the resilience of our food supply chains.
Continued investment in prioritizing trade, diversification of markets, and new and increased investment in addressing non-technical trade barriers is key to Canada's economic growth and stable supply chains.
On that note, I would like to thank both and for their help recently in getting South Korea and the Philippines to reopen their borders, and to all members of this committee for reaching out with their offers to help whenever they can.
Investment in the transportation corridors to withstand extreme events is critical for long-term success. Roads, rail, ports, etc., need to be maintained and ready for the impacts of climate change with prevention—an example would be dikes—and redundancy—an example would be alternative routes—being key. Also, rural infrastructure needs to be prioritized and invested in significantly by the broader community, as it is the basis of much of Canada's GDP.
We recommend committing essential rural infrastructure investments, including but not limited to irrigation, roads, bridges, flood mitigation, and expanding on rural broadband Internet that is both reliable and affordable.
Now I'll turn it over to Fawn.
The pandemic has demonstrated the need for effective and efficient use of vaccines and preparation ahead of potential health events. This includes threats of animal disease outbreaks. A serious animal health incident would have large-scale impacts on our sector.
We are, simply put, not ready for the real threat of an FMD outbreak and must immediately invest in a Canadian FMD vaccine bank as our neighbours to the south have. It could have a $50-billion to $60-billion financial impact on the Canadian economy. This is a key priority for Canadian beef producers and is one of our top federal budget asks.
The recent severe weather events and COVID have also shown us the importance of the business risk management programs to the economic viability of our producers. We have used AgriRecovery to address floods, fires, processing capacity and drought in the last number of years. Continued and increased investment in the BRM programs is needed as it helps smooth out bumps in the road for our producers in enabling them to better plan for the future.
We thank the teams who have worked on designing and delivering these programs, and look forward to making future improvements so that they are even better suited for future challenges. While today's time doesn't allow me to get into all of the nuances and details, we would be pleased to meet with members of the committee to look more comprehensively at solutions for the future.
Thank you. We look forward to your questions.
My name is Kathleen Sullivan and I am the CEO of Food and Beverage Canada, representing Canada’s domestic food and beverage manufacturing sector.
I am also co-chair of Agriculture and Agri-Food Canada’s Food Sector Network and, with the Canadian Federation of Agriculture and the Canadian Agriculture Human Resource Council, am co-chairing a project to develop a workforce strategic plan for Canada’s agriculture and food and beverage manufacturing sectors.
I appreciate the opportunity to meet with you.
Canada’s food system is the foundation of this country’s national food sovereignty. Our food system contributes to Canada’s national, provincial, territorial and regional economies, it supports our international trade goals and it underpins local food production and food security, but the food system is a complex supply chain connecting almost 200,000 farms, 8,000 food and beverage manufacturers, 15,000 retail stores and 100,000 restaurants, all working together and with input suppliers and the transportation sector to ensure Canadians have the food they need.
Over the past two years, Canada’s food supply chain has been under inordinate and destabilizing pressure. Today, more than 90% of Canadian food companies are experiencing supply chain issues.
The reasons are complex. They include disruptions in global supply chains due to the pandemic, price inflation, natural disasters and transportation infrastructure disruptions.
For food and beverage manufacturing, the sector I represent, the number one overriding issue is labour. Food and beverage is the largest manufacturing employer in the country, but today, on average, Canadian food and beverage manufacturers are short 25% of their workforce. That is an absolutely staggering figure. The labour shortage has resulted, we estimate, in a more than 20% reduction in output. That means 20% less Canadian food available to feed Canadians or to export.
The impacts of the labour crisis are real. They are felt across all products, company sizes and regions. Here are just a few examples.
In Pointe-Claire, Quebec, LUDA Foods is a mid-sized processor that makes soups, sauces and custom blends for the food service and industrial markets. At full capacity, it has 80 employees but today has open postings for 20% of its workforce. The company’s fill rate for orders is now between 70% to 80% only, and the company is losing sales.
In Winnipeg, Medallion Milk has experienced labour shortages throughout the pandemic, specifically in the production area, averaging a 20% vacancy rate for production jobs. Really importantly, we have to remember the stress that puts on the remaining employees.
Olymel, one of Canada’s largest meat processors, with plants in Quebec, Alberta, Ontario and New Brunswick, reported in the media last fall that it needs 3,000 workers. Olymel announced it will stop slaughtering activities at its plant in Princeville, Quebec, starting next March, due to its labour shortfall.
In Brampton, Ontario, Maple Lodge Farms, Canada’s largest independent chicken processor, is operating with a 25% labour shortage. The facility has made substantial changes in product offerings. It has added overtime, and that places even more demands on the employees, who are already experiencing burnout due to the pandemic.
These are just some of the stories we have heard and continue to hear from companies across the country. It is our full expectation that these labour shortages will exist even after the pandemic comes to an end and likely will become worse. As an example, and like many other companies, at Maple Lodge Farms a further quarter of that company’s workforce will reach the age of 65 in the next five years. That means a level of turnover that has never been seen in the company’s history.
We recognize and we very much welcome recent commitments from the federal and provincial governments to help address labour issues, including the $85 million in additional resources recently announced to assist in processing times at IRCC. The problem, though, is that these these initiatives will take time to roll out, and they will not provide the relief that is needed in the immediate term.
We were also very pleased to see that 's and 's mandate letters acknowledged the need to focus on labour and to prioritize the development of a labour strategy to address the chronic shortages in the agriculture and food-processing sectors.
Industry has in fact already stepped forward to play a leadership role in developing that strategy.
Last fall, the Canadian Agricultural Human Resource Council, the Canadian Federation of Agriculture and my organization launched a project to develop a workforce strategic plan for our sectors to address our chronic labour problems. This project, started last fall, is already under way—
We heard from officials this morning and certainly what I'm hearing from the 200,000 farmers and 8,000 processors in food manufacturing is that labour shortage is the number one issue, as you identified in your remarks.
I appreciate the work that industry is doing in bringing forward solutions and participating in some of these longer-term round tables and meetings.
We heard from officials that the recently participated in a supply chain summit, but from the acute shortage now, the industry was welcomed to have more meetings. Do you feel more meetings are required? Do you feel that you've been heard in launching the emergency worker benefit?
I have the five-point plan here in front of me. I know we've spoken about this before. Invitation to more meetings doesn't address it. I think the 20% cap is welcomed in Quebec, but my understanding is 30%, as we identified in the processing capacity report, is required across Canada.
Would you have any comment?
Sure. As you well know, we've met with about 55 officials so far to discuss the labour shortage and the need for an emergency response. We have a meeting coming up next week with senior officials at the departments of Agriculture and Agri-Food, ESDC and IRCC. It would very much be our hope that at that meeting they will provide us with a response to our proposal.
In short, every day that goes by without some sort of response is a day wasted and a day where we just put more pressure on our current workers.
I know we're not the only sector facing this labour crisis. We're also not the only country that's facing this. However, if we want to have a chance of reviving our economy as we emerge from this pandemic, it is clear that the fundamentals of our workforce have somehow shifted under our feet through this pandemic.
We need to really stop the blood loss that we're experiencing right now, stabilize the workforce, and collectively we need to come up with some solutions for the food sector, and I would suggest, for the whole economy going forward, because this is going to be the biggest issue that many countries will be dealing with.
I want to start by saying thanks to all the panellists for joining us today. I really appreciate your organizations, the incredible work you do and all the of the stakeholders you represent who are essential to our food system.
Perhaps I could say to Mr. Lowe and Ms. Jackson to not get offended if I focus my questions on fruit and vegetables with Mr. Buy today. I do eat beef and enjoy it very much. Canadian beef is great, but I'm going to focus some questions on the briefing that Mr. Buy gave us.
I appreciate the comment that was made in the briefing note that 80% of Canada's fruit and vegetables are imported, which I found quite revealing and a bit shocking.
I think the opportunity, especially given comments made earlier about the food guide, certainly shows that a more sustainable diet includes eating more fruits and vegetables than the average Canadian does, generally speaking. I think it certainly goes without saying that we can have much more production of fruits and vegetables in Canada.
I note, Mr. Buy, that your briefing note expresses the opportunities for innovation within that, including vertical farming.
Have you done any research or innovation around import substitution and identified very specific categories of fruit and vegetables that we can grow here in Canada?
I will begin by thanking the representatives of the three organizations for taking the time to join us today. We really appreciate it.
Mr. Buy, allow me to continue with you.
You talked about implementing a national strategy on research and innovation. Is it necessary for that kind of a strategy to be highly centralized? Shouldn't the government rather give freedom of action to businesses and educational institutions?
Among others, you mentioned the Deans Council, Agriculture, Food and Veterinary Medicine. Its representatives have met with us a number of times to raise a red flag about the lack of investments in university research.
Wouldn't a government policy that would provide a tax credit or financial support for anything related to innovation and research be even easier, without a new administrative structure being needed?
Thank you so much, Chair.
Maybe I'll start with Ms. Sullivan from Food and Beverage Canada. It's good to see you before our committee again.
With respect to the labour problems that you very clearly outlined for us, those are very stark figures. Even for someone who has been on this committee for four years, and who has seen this perennial problem, those are pretty brutal.
In my region, we saw housing prices go up anywhere from 30% to 40%. I want to get a sense from you on whether your members are doing any kind of surveys amongst the labour force. What are workers reporting back to you about the cost of living? Are they even able to afford to live in the regions where the work is? I know that a lot of people would love to work, but they also have to judge other things in their life, like their housing costs, their transportation costs, etc.
Can you maybe link that in? This doesn't exist in a silo. It has to be linked to other things as well.
You're absolutely right.
In this long-term strategy that we're working on, infrastructure is one of the pieces that we are tackling. Housing prices are a problem. Availability and affordability of day care can be a problem. It's not just the cost of public transportation, but remembering that in any manufacturing setting, you're doing shift work. Sometimes it's even the availability of public transportation. We really have to take a look at that whole package, at things that enable people to be able to go into work or to be able to live in the regions where we need them.
We definitely see problems. In food manufacturing, sometimes you're in rural areas where you've seen depopulation and it's hard to find people. Sometimes, you're in urban areas where the cost of living makes it very difficult to find people. One of the things we are seeing is that even in the rural areas, the housing prices are now starting to become a bit prohibitive for our employees. We have to get our head around that. This is a relatively recent phenomenon or it's certainly accelerated recently through COVID.
What food processors who use the temporary foreign worker program have done over years, even predating COVID, is purchase housing stock. They would have, in some cases, purchased entire apartment buildings so that they can be sure that their workers actually have appropriate housing that's appropriately priced.
As we have seen with the labour supply in the last six months, things have shifted under our feet and we're going to have to get a handle on that whole infrastructure piece. Subsidized day care will absolutely help contribute to that, but there's a big piece here that we're going to have to figure out.
It's going to have an impact in a couple of ways. One is the ability for us to get product across the border. The other is our ability to receive inputs or supplies—including packaging—from the U.S.
As I pointed out earlier, we deal with a fairly major transportation disruption, it seems, almost every year.
In my sector, where we're doing processing, a lot of times we are delivering to distribution centres. The distribution centres have a certain supply of products we've manufactured. We are just-in-time delivery, but we have that buffer.
We are already seeing a backup of trucks, as everyone is. Because of the amount of time it takes for that to register in the grocery store or in plants that can't operate because they don't have supplies, it hasn't hit yet.
It has to be clear to all of us that the sooner the blockades are ended—as would be the case in a strike or anything else—the better off supply chains will be.
I want to thank the witnesses for joining us this afternoon.
My first questions are for Mr. Buy from the Agri‑Food Innovation Council.
First, thank you for your brief. You spoke a great deal about a very important labour issue. However, another very important issue concerns innovation and robotics in our processing companies, specifically in the animal sector. I speak from experience, given the Olymel plant in my constituency.
How are you working with animal processors in order to make further progress on robotics? It wouldn't resolve all the issues, but it would mitigate them.
I want to extend my greetings to you, Mr. Buy. My colleague, Mr. Turnbull, has already asked you some good questions. Since your organization is active in my constituency, I'll be visiting you in Alexandria. I'll have more than five minutes to have a proper discussion with you about agri‑food.
I want to turn my attention to Ms. Sullivan.
You've raised a few points with regard to the temporary foreign worker program. I'm not sure if you measured the impact. Two years ago, Premier Legault made a call for Quebeckers to come to work in the agri-food businesses. This was at a time when the unemployment rate was in the double digits because we were just starting with COVID-19.
I'm wondering if your members reported—back in April, May or June 2020—an increase in the uptake of those jobs.
One of the biggest things that could benefit us right now is increasing the cap. Across food and beverage manufacturing—unlike primary agriculture—your workforce cannot be more than 10% temporary foreign workers. Just increasing that cap by any amount would be helpful. We are suggesting 30%. Ideally, in a perfect world, during a crisis we wouldn't have any cap at all but we have suggested 30% might be something that could be tolerated by the federal government.
We're also suggesting that the federal government move for a defined period of time to a two-year LMIA, rather than a one-year LMIA, which would help to reduce paperwork on the part of companies, but also—and I think very importantly we've all realized—help reduce processing times and processing work for the government itself.
I think those two measures in and of themselves would be quite beneficial.
Another thing is really important. Somebody asked me once why we want to use temporary foreign workers. Except for seasonal jobs, we don't want to use temporary foreign workers. We want to welcome people into Canada to become permanent residents and do these jobs permanently and become parts of our community and our workplace family. We have to have, attached to any program we put in place, really clear and workable pathways to residency for any of these workers who come in.