Thank you very much, Mr. Chairman and members of the committee, for a chance to present on Canada's food chain. I'll make a very quick comment on the George Morris Centre, for everyone's awareness, talk about the food chain very quickly and some of the challenges and opportunities, and the concept of the value chain as a way of trying to address this, which governments in Canada and the industry itself are starting to do. And we'll talk about some future directions.
The George Morris Centre, as some of you may recall from the presentation last fall, is a national, non-profit think tank for agrifood policy. One of the areas we do work on is the value chain, the concept of the food chain and how to make it more effective.
Canada's food chain, from the farm gate all the way to the dinner plate, as some people call it, is sophisticated, competitive, innovative, and adaptable. But it is not quite perfect. There are issues of scale, depending on where you are in the sector and inside the food chain, where you are getting the investments, who is investing, and whether they're capable of handling some new innovations. The regulation of the food chain varies, depending on where you are, what products you're in, and what history has occurred in those products, and there are issues of what the non-food sector has in terms of bringing either competition head to head or competing for that consumer dollar.
There's a good deal of evolution happening, both at the food retail and food service end, which most consumers see all the time. That's leading to changes down through the chain, back through the processing side, into the farm community, and into the input sector. The whole concept of traceability is one way of thinking about how people's attention to the food chain has changed over the years.
I should note that competition exists everywhere in the food chain to a greater or lesser extent, and in some cases it's very ruthless. In some cases it's dominated by several large players.
I have just a few quick stats, and I'm sure my colleagues will present a far greater amount of information. I should note that recently Agriculture and Agri-Food Canada released an overview for 2012 on this whole issue, and it's very good. I'll try not to replicate it, but $87 billion is an estimate of food retail sales in Canada, and the food service sales are about $48 billion to $49 billion. These are the large employers, when we add it all up, for the Canadian food system, and they have a dramatic impact across all regions of Canada.
On the other hand, for the food chain, the farm community, the food processing retailers, food service and others have very different historical developments, some smooth, some not very smooth. Many players that used to exist have ceased to exist. Consolidation has occurred across the entire food chain, as well as increasing scale for some and increasing innovation for others. There are very different attitudes up and down the chain, and some of that's been driven by some of the regulatory context in which the participants operate.
There are also differences between the chains, when I think of the food service and food retailing or the independents, and the links back in terms of how they link to the processors and the farm community. And there are also new competitors. I'm sure my colleagues will speak to this, like the issue of other stores, such as Target, coming into Canada, or to what Walmart has done to the food retailing system in terms of changes. There's the use of grocery stores and food service sales at gasoline stations. Shoppers Drug Mart is now getting into a certain amount of actual food retailing. These formats are shifting, and it shows the kind of continued evolution of the food chain and what it means up and down.
There's also been a tremendous shift in consumer demands for fresh product, for different types of packaged goods, for pricing, and goods from outside of Canada. There are also shifts in demographics, both in age and ethnicity, and a need for different approaches to meet these different types of consumers in terms of driving back some differences up and down the chain.
One thing that has changed in the last two or three decades, particularly in the public policy for agriculture and food, is the growing involvement of the entire food chain in all these discussions, whether it's on a specific issue or on the broadest context of agrifood policy. The challenge is that the capacities differ between the players. Their histories and institutional memories are not identical, and how the markets affect them are also not identical. Both work for the past efforts and where they're going in the future.
There are different ways of responding to environmental pressures, social pressures, community pressures, community issues, where a community wants to be with certain food products or what they don't want, and how you shift the roles and linkages between them. How the sector responds and how the entire food chain responds has not always been consistent. There have been some very diverse views out there in discussions between one part of the chain with the other, some of it driven by the regulatory context, which is part of the history of how these things have changed.
Over the last several years, spurred both by industry and by government, there has been a greater focus on what we call value chains, in which they try to find market opportunities at the enterprise level, not trying to solve all of it at the industry level, but building up from enterprises, special value chains within sectors and within subsectors.
There is a whole concept now of value chain management, which the Government of Canada, provincial governments, and industry groups have supported. They're trying to learn more about how this works and how other jurisdictions have worked the value chain to get greater profitability, better viability across all players, not just some players in the food chain, and how technology, different attitudes, and different awareness might affect it.
Again, there are some limits on capacity, limits on adaptability, who has the money to reinvest, and who has the time and effort to think differently about an issue in which they can all participate. Where in the past they would have been in conflict, maybe in the future there should be greater trust and responsiveness.
The George Morris Centre has a value chain management centre, and we've done this business for about four years. We've done some work with the Canadian Agri-Food Policy Institute, which David McInnes represents. A recent paper released recognized these challenges through both our workshop efforts and our analysis. Past adversarial attitudes, driven by conflicts in history about bargaining power, about attitudes, about differences in how to achieve the same goals, and a lack of trust in the sharing of information have been real challenges. However, that can be overcome, and there have been examples both in Canada and across the world where the food chain has been able to achieve better results for consumers and for themselves by better cooperation, better linkages, and better trust.
A key focus for value chains is how to improve that over time, step by step so that it can work, not only for just one small commodity but across commodities. Still, we have to realize that the sector is complex. One size won't fit all. There have to be different ways of looking at it and different measures of how you see this being successful. Then look at these results and try to find the ones that work the best, and try to keep replicating the successes and avoiding the failures.
My view, and the view of the centre, would be that there is a great opportunity here to improve the trust, the comfort, and the relationships between those up and down the chain. There is an opportunity for better information sharing, better awareness of what the consumer really wants, and a recognition of the complexity in trying to learn how to make these value chains real, not just conceptually or just by one little pilot, but how to make them real.
I will make one last plug. Mr. Chairman, early next week the Government of Ontario, aided by the Government of Canada, is sponsoring a value chain innovation forum here in Mississauga. We're part of that. It will bring in experts from across Canada, across the United Kingdom, and Australia to talk to people on how to make the system really work, how it was achieved in the past and how they can actually make it work here.
Thank you, Mr. Chairman.