TORONTO — Canada’s food processing sector measures up well to other Canadian manufacturing industries, according to a study released by the George Morris Centre, an agricultural think tank in Guelph, Ont.
However, a second study suggests Canada must improve productivity to catch up to the United States in food processing.
The report was delivered during the Canadian International Farm Equipment Show in Mississauga, Ont., at a joint meeting of the agricultural media and members of the Canadian Agri-Marketing Association.
According to a co-author of the first study, Canada’s $65 billion food processing sector has done a commendable job since the Canada/U.S. Free Trade Agreement was signed.
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“The agri-food sector is the second largest industry in Canada in terms of sales and employment,” said Larry Martin.
“It holds its own in productivity and profitability.”
The study found that the agri-food sector is less volatile and more immune to fluctuations in the underlying business cycle.
But despite its good track record at home, the food processing sector risk losing industries to the U.S., according to a separate study.
Except for the oilseed industry, which has shown improvement, sectors including red meat, fluid milk, and frozen fruit and vegetables lag behind their U.S. counterparts.
“The vegetable oils industry has been growing and has surpassed the United States in value-added per dollar spent,” reported Martin.
Equipment quality
“Since 1990 and the free trade agreement, labor activity in this area has exceeded that of the United States and Canada’s net export ratio has increased in comparison.
“Much of our lower productivity has to do with the quality of equipment and tools; it has nothing to do with labor quality,” Martin said.
He added that for every $4 that goes out of Canada in investment, only $1 comes in from the U.S.
Canada’s higher taxation and regulatory standards are main factors driving the imbalance, he said.
