Loss of processing plants means more food imports
Canada’s food processing industry is shedding jobs, plants and competitiveness under the weight of chaotic rules, lack of investment capital and a strong Canadian dollar, says a senior processing official.
During the past four years, the food processing industry has seen 58 plants close and 35,000 jobs lost, Alberta Food Processors Association president Ted Johnston told the House of Commons agriculture committee last week.
One of the results is a sharp increase in imports.
Johnston, who also co-chairs the national Food Processing Value Chain Round Table, said governments can help reverse the industry’s decline through rules being written for the next five-year Growing Forward programs.
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“Even though they may not articulate it clearly, it’s my belief that if the Canadian consumer was aware of the continuing threat to their domestic food supply and therefore food security, they would insist that the government of Canada take strong affirmative action to retain and renew this vital industry for the benefit of all Canadians,” he told MPs.
“Government policy needs to change and it begins with Growing Forward 2.”
Among suggestions Johnston made were:
- create a new fund of money available for interest-free loans to processors for investment. A $50 million AgriFlex fund in the current Growing Forward program with a $2 million cap is inadequate
- give processors the ability to quickly challenge Canadian Food Inspection Agency decisions that close down or limit plant activity
- find a way to support manufactured food exports
- change the Product of Canada labelling rule to reduce the Canadian content requirement from 98 percent to 85 percent.
“The 98 percent guideline has resulted in the removal of Product of Canada from Canadian manufactured food products for all practical purposes,” he said.
Manufacturers usually cannot meet the 98 percent content rule because of the need for imported spices or sugar in most products
- find a way to create one product standard that processors need to meet when trying to market
Johnston said processors must now deal with a CFIA product safety and plant standard, as well as standards from powerful retailers such as Loblaw’s and Walmart.
He said one of his members spent $3.5 million to raise his plant to federal inspection standards, but then needed to spend an additional $1.5 million to meet the standard required to put meat into Loblaws stores.
“It’s harassment,” he said. “It’s a huge problem.”
However, Ontario Conservative MP Ben Lobb wondered if it was up to government to try to interfere with industry-set standards.
“Is it really the government’s problem that Walmart or Loblaws have certain standards or is that the industry’s issue?” he said.
Johnston said the government problem of overseeing a declining industry is partly the result of the confusing layers of requirement.
“The result of that is people are closing their doors.”
