Excellent. I'm ready.
Food and Consumer Products of Canada welcomes the opportunity to contribute to the Standing Committee on Agriculture and Agri-Food study on innovation competitiveness. FCPC is the largest national industry association in Canada, representing companies that manufacture and distribute food, beverage, and consumer products. Our member companies have facilities in 170 federal ridings across the country. Our industry is the largest employer in the manufacturing sector in Canada, with approximately 300,000 Canadians working in 6,000 manufacturing facilities in every region. We are a truly national industry, providing value-added jobs to both rural and urban Canadians in every province and territory. We support farmers by providing them a market for the food they grow, and we meet the needs of Canadians consumers, who enjoy the safe and high-quality food available on grocery store shelves.
The government can encourage innovation and competitiveness in our industry by, one, making regulatory modernization a priority; two, encouraging capital investment; and three, pursuing meaningful access to international markets. I'll go through each of these items.
First, with regard to regulatory modernization, the most important way the government can support innovation and competitiveness in our industry is to rapidly modernize Canada's food regulations. Regulations must continue to be based on science and prioritize product safety. Our regulatory framework, governed by Health Canada, has not been updated in a meaningful way since the 1950s. Food regulations have not kept pace with changing technologies and the development of new products, and backlogs for product approvals persist. Canada's food and beverage manufacturers require a more predictable and responsive regulatory framework, which would encourage companies to maintain and grow their operations in Canada. For consumers, regulatory reform is needed to provide more product choice on grocery store shelves.
We have seen some progress in food regulatory reform at Health Canada. This was achieved because Agriculture and Agri-Food Canada provided $17.4 million over five years to Health Canada to address food regulatory reform. In Growing Forward 2, however, this funding was no longer made available. As a result, food regulatory modernization is stalled. Health Canada's limited resources are regularly diverted away from food to pharmaceuticals, as both sectors compete for resources in the regulation of the Food and Drugs Act. Our regulatory recommendations are therefore twofold: one, reinstate the $17.4 million to Health Canada for food regulatory reform; and two, create a separation of funds between food and drugs in Health Canada, to ensure more predictable and balanced allocation of resources.
I'll go onto my second item, capital investment. Food and beverage manufacturers recognize that they require state-of-the-art facilities to be productive and competitive in both Canada and abroad. Many, however, are facing challenges related to aging infrastructure and equipment in facilities. More incentives are required to encourage manufacturers to reinvest in their Canadian plants, expand existing operations, or open brand new modern facilities. Other countries are fiercely competing for these investment dollars, and Canada needs to be in the game if we want to keep value-added jobs here in Canada.
Our recommendations, therefore, include making an accelerated capital cost allowance permanent, expanding the advanced manufacturing fund outside of Ontario, and creating a new capital investment fund to support investment in Canada's manufacturing facilities.
My third item is international markets. Our member companies understand they need to export in order to grow and compete in both Canada and abroad. We therefore fully support meaningful access to international markets, and commend the government for its ambitious international trade agenda. While many companies are interested in taking advantage of these export opportunities, there is a growing need for more support outlining the steps required and market insight to become export ready. Furthermore, having this information in a one-stop portal would make this accessible to companies.
As we know, our industry is highly integrated with the U.S., and our success depends on the free flow of goods with our top trading partner. We are therefore very concerned about the government's proposed retaliatory tariffs on our industry, in response to the ongoing country-of-origin labelling dispute with the U.S. If implemented, these tariffs would affect every product category on store shelves.
Canadian families would be subject to a vast increase in their grocery bills and significantly less product choice in stores. For a typical shopping trip, purchasing 10 items including staples such as breakfast cereals, juices, potato products and rice, for example, would increase from $40 to $75.
An increase in tariffs on ingredients would also have a negative impact on domestic sales, exports, and jobs. Decisions relating to innovation in R and D would be cancelled. Many Canadian manufacturers would be at extreme risk of closures and others would significantly scale down their Canadian operations, and Canadian farmers would be forced to find new markets.
The uncertainty created by the proposed retaliatory tariffs on our industry is not conducive to competitiveness or innovation. Our recommendations are therefore, one, to develop a one-stop portal of information to help companies become more export ready, and two, resolve the country-of-origin labelling dispute in a manner that does not increase tariffs on our industry.
I'd like to leave you with one final thought. As you know, food manufacturers and Canadian farmers are interdependent and we all work together to ensure the safe and high-quality food available on grocery store shelves. In order to drive innovation and competitiveness, the views of both farmers and manufacturers must be given equal consideration in policy development by this committee and by the department. This opportunity provided to me today is therefore very much appreciated.
Another positive step would be to include food manufacturers and their issues on the agenda of every federal-provincial-territorial agriculture ministers' meeting.
My final two recommendations, therefore, are to provide equal consideration to farmers and manufacturers in policy development, by this committee as well as by Agriculture and Agri-Food Canada, and to ensure equal weight in the agenda for farmers and food manufacturers at all upcoming federal-provincial-territorial agriculture ministers' meetings.
Thank you.