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Results: 1 - 15 of 32
View Warren Steinley Profile
CPC (SK)
I would be remiss if I didn't mention Protein Industries Canada, which is right in the heart of Regina, which is my riding.
You have a new partnership, or a recent partnership, with Bioenterprise Corporation. It expands on the role of business accelerators in the ag sector.
Will there be a role in that partnership with Bioenterprise Corporation to also help increase processing capacity? Could you expand on that a bit, please?
Kelleen Tait
View Kelleen Tait Profile
Kelleen Tait
2021-02-18 16:29
Sure.
Obviously, in that scenario as well, we would be assisting with some of the people coming through that incubator. Some of the things we discussed earlier, those research and development credits, would play a huge role there.
Also, access to capital for some of those new businesses is going to be difficult, or established businesses, really. Therefore, if there was any availability of government funding that could be easily predictable and applied for, that would be truly of benefit.
View Alistair MacGregor Profile
NDP (BC)
Thank you, Chair.
I'll turn to Mr. Lemaire and the CPMA.
One of our previous witnesses was the Agri-Food Innovation Council. I was really interested in your comments in your opening statement about the tremendous potential that exists for value-added products. Despite the challenges you listed, I know that there have been some success stories. There are companies that are making it in Canada under current conditions. That's what I'm really interested in.
I asked the AIC about some of the common threads that weave through these success stories, and they say it's the presence of an ecosystem that can bring together researchers, entrepreneurs, industry reps, investors to mentor entrepreneurs and so on.
Can you talk to our committee about some of those success stories, about any members of the CPMA who have found success under current conditions in innovative food processing, and about what led to their success?
Ron Lemaire
View Ron Lemaire Profile
Ron Lemaire
2021-02-18 16:40
Yes, most definitely. As an example, I can talk about Sliced, out west, under the Star Group. When you start looking at where and how they found success, you see that, number one, they ensured that they had control over their production base. They had an internalized ecosystem where they managed it from start to finish. They also invested heavily in automation and the innovative production line. They used state-of-the-art technology in their production and their fresh-cut operations so that they could ensure they were processing the vegetables and the fruit product going through in the most effective manner.
Then, the other end comes out relative to the key attributes on the packaging piece and managing your cost centre. We continually look at the overall cost and structure, from your production to your package to the consumer. You have to be able to manage it all. At the same time, the piece that we are now seeing more and more is the sustainability component that starts flowing into that full value proposition.
They've looked at all of these pieces and brought all of those elements together. Even pivoting during COVID and looking at how they can redistribute and re-manage that supply line into the market is fundamental.
There are stories like that across the country. I totally believe that the opportunity is there. The model we're seeing and where we have opportunity moving forward is in really trying to drive this back into a regional model where, for our sector, we can centralize production with the growers so that they can move it together and into the market.
Al Mussell
View Al Mussell Profile
Al Mussell
2021-02-02 15:32
Thank you.
Mr. Chair and honourable members, I am pleased to appear before you this afternoon and to provide the insights I have to offer as an independent researcher focused on Canadian agriculture and food.
As a country we take great pride in our agri-food system and its performance. Our point of departure is a position of strength, and the flip side of the challenges that I will raise are opportunities for Canada. I would like to begin my remarks with this important acknowledgement.
I will touch briefly on a number of immediate and tangible challenges to food processing in Canada. These are the challenges of today, impacting the ability of food processing just to be retained in its current state. There are also forthcoming challenges only just beginning to be conceived. Increasingly, the full range of issues that we face in relation to food processing in Canada will not entail a stable solution in which we fix a problem, and the solution endures over time. The environment is more unstable, and maintaining solutions for food processing will require broader, ongoing effort.
Much of the data published by Statistics Canada dealing with capital stocks in food manufacturing was terminated in 2013. Increasingly, we are left to public announcements made by firms investing in new plants for information. That doesn't provide a consistent or satisfactory source of information on processing investment, infrastructure and capacity.
Scale in food processing in Canada faces a number of constraints. From the perspective of product brands and food marketing, Canada is a small market, yet from a geographic and product distribution standpoint, Canada is a very large area to serve and the need for product freshness and distribution can require multiple plants operating throughout the country at a relatively small scale.
The Canadian market is also fragmented provincially through provincial regulation in farm products marketing, under the interpretation of section 121 of the Constitution Act. In effect, the platform through which many processors purchase farm products for processing is provincial in structure, while their primary customers, grocery retail chains and food service distributors, operate at the national level.
The challenges of obtaining and retaining human resources for the needs of the agri-food sector are no doubt well known by the committee. This certainly extends into food processing. Where economics would have dictated that food processing plants be located in rural areas near supplies of farm products for processing, increasingly plants are locating closer to large urban centres as accessing the necessary workforce becomes the key consideration.
For some years now the trends and forecasts documented by Employment and Social Development Canada have pointed to trends in education and training oriented towards professional careers. This risks leaving our sector with a gap.
A recent and troubling development is the erosion of our global trading institutions and a shift toward bilateralism on behalf of large economies with the economic weight to use trade as leverage. Agri-food products are frequently drawn in as an instrument of retaliation in trade disputes, and the resulting injury drives the demand for agricultural support.
For example, the United States has had repeated and highly significant ad hoc farm subsidies in place dating from 2018. These support U.S. production, advantaging U.S. food processors. In addition, support also applies to food processing plant development. For example, in a recent announcement, municipal supports exceeding $1 million U.S. were given for development of a poultry processing plant located in Alabama.
There are also increasing technical challenges to exporting food. The pandemic has elevated these. For example, exports to China have recently become subject to inspections of packaging in food shipments for the COVID-19 virus. This has resulted in suspensions by China of exporters in a number of countries, including Canada. China has also invited countries to self-delist plants in which there have been cases of COVID-19 among employees; however, the process to get re-listed as an exporter to China is not clear. Delisting by China, under either mechanism, could be an overwhelming blow for a food processor leveraged into exports.
In the domestic market, food processors face a customer base of retailers and food service distributors that is highly concentrated. This, by itself, is a concern as the loss of a single retail account could be disastrous. Moreover, the supply chain relations between suppliers and grocery retailers is increasingly seen as fraught in Canada, with concerns regarding involuntary and arbitrary fees levied by retailers and processors, and requirements placed on processors that generally increase uncertainty and inefficiency in the supply chain. This topic occupied considerable discussion at the most recent federal-provincial agricultural ministers conference.
The process of constantly raising the bar on all aspects of food quality and safety and on facilitating innovation is in the interest of all. However, the public process and nature of regulation can undermine this if it is excessively cautious, onerous or creates uncertainty. Regulations need appropriate analysis, consultation and resources behind them, and excessive fees for regulatory approval can form a barrier to new product introductions.
Carbon taxes are recognized as the most efficient instrument for greenhouse gas mitigation; however, the financial magnitude of these costs on the food system are sobering. Without some rationalization about how these costs will be shared, the concern exists that they will end up being allocated by bargaining leverage in supply chains, with the costs rolling back to the food processing and primary production segments.
We are struggling to come to grips with how the economic adversity in Canada fragments itself across the segments of our society, but the effects appear worst in the prairie provinces whose economies are most closely tied to energy. There is a need to replace employment lost and restore economic growth in these provinces. One avenue for doing so is through agriculture and food, with food processing investment as a linchpin. My hope is that new economic development in Canadian food processing can proceed on the basis of competitiveness and efficiency, but this environment is ripe for dangerous provincial economic rivalry.
I have some recommendations.
Evidence-based policy development requires quality data. Improved collection of public statistics that deal with the capital stock for food processing in Canada, with the resources to analyze the data and interpret the results, is necessary.
Many of the challenges that I have identified boil down to inefficiencies in food supply chains. Understanding the causes, the costs of inefficiencies and who is affected can help bring about their resolution and relax barriers to investment in food processing.
Through investments in technology research and development, Canada can redouble its efforts to facilitate improvements in efficiency at smaller scales and address some of the issues with workforce in food processing.
Ongoing work is required on Canada's approaches to regulation of the food system and the provision of public resources to support regulation that is effective for all.
Export market access, and also access to imports, is fundamentally in the interest of food processors. Canada needs to continue its pressure to restore and expand the rules-based trading system. Equally, Canada should explore approaches to trade in processed foods that addresses broad priorities, notably climate change and the facilitation of processed foods featuring a reduced carbon footprint, with protective border measures based on the carbon footprint of the imports. Indeed, missing this point could lead Canada to falling behind.
Investments in food processing can be an important generator of regional economic development and form a portion of the solution for economic recovery. The federal government has a role to play in facilitating recovery through food processing investment, but in a coordinated manner that avoids the pitfalls of provincial rivalry.
Recognizing and addressing our constraints in food processing are critical in advancing the goals in the Barton report, and more fundamentally, having Canadian agri-food play the role that it can in economic development, enhancing food security, and being a resilient food supplier to the world.
Serge Buy
View Serge Buy Profile
Serge Buy
2021-02-02 15:40
Thank you, Mr. Finnigan.
Good afternoon, and thank you for giving the Agri-Food Innovation Council a chance to provide recommendations as you study processing capacity in Canada.
The Agri-Food Innovation Council has been in existence since 1920. It is a unifying voice for research and innovation in our country. Our members include research centres, university faculties, producer groups, government entities, and large, medium and small business, all involved in research and innovation on agri-food.
Some of our members are located in your ridings, such as in Mr. Steinley's riding of Regina—Lewvan, with Protein Industries Canada and the Farm Credit Corporation, while others have various connections through agri-food research and innovation, such as the Agriculture and Agri-Food Canada research centres located in the ridings of Madam Bessette and Mr. Blois.
The COVID-19 pandemic has resulted in Canadians being concerned about food safety and security. For some people this was the first time in their lives that they went to the grocery store and couldn't find the products they are used to buying. The problems we are experiencing with processing capacity won't end when the pandemic ends. We require thoughtful action now.
The Agri-Food Innovation Council would like to offer tangible recommendations which, in our opinion, are realistic solutions for some of the ongoing problems. We consulted our membership when preparing this presentation and making our recommendations, and we certainly want to thank them for their input.
I also want to take the time to thank the farmers, the workers in food and beverage manufacturing and processing plants, distributors, retailers and those in food services who enabled Canadians to continue to feed their families even when it meant taking a risk for themselves.
Let me move forward with our recommendations.
The first recommendation is to ask that the government create a funding program to facilitate the adoption of automation technology for food and beverage manufacturers as well as processing plants.
As noted by Food and Beverage Canada and le Conseil de la transformation alimentaire du Québec in previous submissions to this committee, automation in food and beverage manufacturing would help reduce risks for our food systems. Dr. Andrea Brocklebank of the Beef Cattle Research Council, one of our members, also suggested further adoption of automation for repetitive tasks in processing plants. Along with increased efficiencies, this would also reduce risks of worker injury and facilitate the transition of labour to value-added jobs.
We see the lack of capital as one of the key barriers to the adoption of new technologies for food and beverage manufacturing. The government has a role to play. Let's take today's news. The government has announced that it has secured a deal to manufacture vaccines in Canada. It is providing funding for new facilities. That is fantastic. It shows that the government sees a role in making us more independent for the supply of vaccines.
We need to be able to replicate that type of support for food and beverage manufacturing and processing plants. This will strengthen our food security. The development of a funding program to facilitate the adoption of technology for food manufacturers and processing plants would go a long way to support companies with the large capital investments required. Rightfully so, Canadians view food security as a crucial issue. Increased adoption of automation in food and beverage manufacturing as well as in processing plants would help.
Canada is a nation of innovation. However, we have seen an increasing gap between research and commercialization. Incubators and accelerators in agri-food, such as Creative Destruction Lab, Bioenterprise, and the Saskatchewan Food Industry Development Centre, can provide early-stage companies with guidance, cross-sectoral connections, mentorship and access to capital and funding. This leads me to my next point: incubators.
Our second recommendation is that the federal government should incentivize the expansion of incubators and accelerators to stimulate entrepreneurship in agri-food.
Incubators play an important role in bringing together agriculture research with other key sectors, as Dr. Paul Hoekstra of Grain Farmers of Ontario noted to AIC. This is why they're important and the government should play a role in supporting them.
In November and December, AIC held a series of video conferences on the climate for investment in agri-food research and innovation. We had a number of presentations from Canadian organizations, companies, funders and even international organizations, which helped provide comparatives for Canada.
The agri-food research and innovation sector is underserved in terms of private investment.
As Mr. Dave Smardon from Bioenterprise said during our video conference, trying to help agri-food companies find capital for activities such as piloting demonstrations was currently a significant challenge. This is partially an issue of perception and limited knowledge of available opportunities.
Ms. Kelley Fitzpatrick from NutriScience Solutions in Manitoba said that while government funding is generally effective at funding research, more could be done to support agri-food ventures looking to market innovative products and processes.
My final two recommendations further my previous comments. First is that the government collaborate with industry to actively attract private investments in agri-food research and innovation by promoting opportunities, success stories and incentives for investments. Next is for the government to expand NRC's IRAP offering to SMEs looking to commercialize their innovation by making capital costs eligible.
In the not-too-distant past, December 2017, in a report on Canada's economic growth, Dominic Barton highlighted agriculture as a key growth sector. He was right.
There is no question that this pandemic has had a deep impact on all of our society. Stemming from that are new challenges for our economy.
We don't need to see solutions to challenges as being out of reach. Yes, we need to move quicker and smarter. Yes, we need to work better together. Our recommendations don't necessarily mean big programs. They can be implemented and will benefit our country. The government, to its credit, has made more regulatory changes and more developed new programs in the past 10 months than in the past number of years. When there is a crisis, our society rises to the challenge.
In this presentation and in the brief that you should have received, I highlighted four recommendations that either require some investments but would support economic growth for the recovery or have little cost for the government.
We would be pleased to see this committee adopt all or even some of our recommendations as its own and would also want to work with the government on their implementation.
Thank you.
View Alistair MacGregor Profile
NDP (BC)
Thank you, Mr. Chair, and thank you to both of our witnesses for their very informative testimony and also the responses they've given to questions so far.
Monsieur Buy, I'll start with you.
In your brief to our committee, you made mention of a few of the incubators and accelerators. One of those, the Saskatchewan Food Industry Development Centre, is a facility that our committee actually got to have a tour of in the previous Parliament. Those of us who were there were quite impressed with what it was able to do to really help young entrepreneurs bring their ideas to fruition. We got to sample some of the products that it made.
You've spoken a lot about what we need to do to attract investment. Can you talk a bit more about some of the success stories that we as a committee could make mention of when we're making our recommendations to the government? Could you expand a bit more on that?
Serge Buy
View Serge Buy Profile
Serge Buy
2021-02-02 16:07
We can certainly provide you a number of success stories for those products and those centres. I don't have success stories at the tips of my fingers here, but I—
View Alistair MacGregor Profile
NDP (BC)
Is there a common weave through those success stories that we could briefly allude to in our committee report?
I'm not sure if we have Mr. Buy on, Mr. Chair.
View Alistair MacGregor Profile
NDP (BC)
Sure.
Dr. Mussell, did you have any thoughts on the question I was asking Mr. Buy about success stories?
View Alistair MacGregor Profile
NDP (BC)
The question I was asking you is, apart from any specific success stories, is there a common thread that weaves through them that you can allude to for our committee to examine when we make our recommendations to the government?
Serge Buy
View Serge Buy Profile
Serge Buy
2021-02-02 16:09
Yes, absolutely.
I think the common thread is the fact that a lot of those companies are not having their own the capacity to do this. Therefore, the joining of efforts, the ability to benefit from this incubator type, has enabled them to move forward.
In the stories we are going to assemble for you, you are going to see through those three organizations that are mentioned and others the fact that it is the same story on a regular basis. We are hearing regularly that they need to pool their resources, that they need to get some support initially and move forward.
View Alistair MacGregor Profile
NDP (BC)
When you look at the motion that's guiding our study, our primary objective in this study is to ensure the stability and renewal of the value chain, but one of the other parts of our study refers to also supporting the goal of increasing local capacity to protect food security. You made mention of that in your opening statement.
Can you add anything to cover that particular aspect of our committee study?
Serge Buy
View Serge Buy Profile
Serge Buy
2021-02-02 16:28
Absolutely.
Two of the recommendations deal specifically with this increasing access to capital for local processing plants and manufacturing plants.
We need to look at the local aspect of this. I don't have the funding to support their activities on that front. The major international companies do and can make the investment, but the small and medium-sized enterprises don't. The government needs to support them on that. The government also should be able and should want to promote the investments in those facilities.
Those are two things that I think could help on this, and the NRC IRAP as well, which mainly deals with small and medium-sized businesses. The recommendation to enable capital funding within that program should be able to help as well.
Rob Lipsett
View Rob Lipsett Profile
Rob Lipsett
2021-02-02 16:38
Thank you.
Good afternoon. My name is Rob Lipsett and I'm a beef producer from Grey County, Ontario. I'm the president of the Beef Farmers of Ontario. Joining me today is BFO's executive director, Richard Horne. Thank you for the opportunity to appear before you today.
While the COVID-19 pandemic has heightened the focus on processing capacity, the beef sector across eastern Canada has had to contend with capacity challenges for some time due to a variety of factors that have led to periodic supply bottlenecks, significant negative pressure on farm gate prices and lost market opportunities.
Over the last five years, federally inspected processing utilization in eastern Canada increased from 71% in 2015 to 100% in 2020. In addition, Ontario provincial processing numbers are up approximately 20% over 2019 and the five-year averages. Some beef farmers must wait four to six months, and in many cases up to one year, to have their cattle processed at provincial facilities. CanFax estimates that shortages in beef processing capacity equated to $129 million in lost revenue in 2020 for farmers in eastern Canada.
To enhance processing capacity, we recommend four key areas of focus. They are strategic investment in the sector, addressing labour shortages, addressing regulatory differences between Canada and the U.S., and creating permanent tools to help mitigate processing disruptions.
First and foremost, continued government investment in the sector is needed. We need to simplify programming and ensure funding windows have enough runway to allow facilities sufficient time to plan and execute. Focus programs on outcomes and stop limiting what and how businesses can invest in capacity growth. Funding priorities should be placed on projects with the greatest ability to expand production capacity. A combination of cost-share funding, no-interest loans and non-repayable loans should be offered to assist with capital investments to spur production and improve efficiencies.
Between 2008 and 2017, Canada's agricultural exports grew three times faster than the Canadian average. Last year, Canadian beef exports grew 17% and opportunity for further growth remains. The sector's ability to maintain jobs through COVID-19 makes agriculture a priority for economic recovery. To capitalize on export opportunities, we recommend creating an industry export development fund to assist export diversification efforts and address trade barriers. For example, the fund could enable processors to apply for matching funding that would support enhanced capabilities to segregate eligible product, support modifications to food safety interventions to meet country-specific requirements or make strategic investments that spur growth and improve efficiencies.
Access to labour is another issue of concern. A study was done by Food Processing Skills Canada indicating that the meat sector had a job vacancy rate of about 13%, compared to other food companies that averaged 2% to 4%. In Ontario, this equates to approximately 2,400 vacant positions and $1.2 billion in lost productivity. A domestic strategy to attract, train and retain the workers by providing investments and supports in training and education is needed. A refocus of foreign worker programs into permanent programs is also needed. The agri-food labour pilot was a good first step, but we need to be doing more. There are dozens of countries with ample supplies of workers willing to come here and fill the jobs. Pathways need to be created to facilitate this.
I'll now turn it over to Mr. Horne to complete our presentation.
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