The Calgary Statement outlined six overarching objectives for the next framework. All are critical to the future of our industry. I will touch on how a few of these areas can support our sector.
The produce industry is a unique entity. This important economic engine is made up of rural, provincial, national, and multinational companies, all working together to increase the consumption of fruit and vegetables.
We make an important contribution to national economic output and employment. In 2013, the fresh fruit and vegetable sector supported over 147,000 jobs, created $11.4 billion in real GDP, and contributed $1.3 billion in personal income tax and $840 million in corporate taxes—yet significant potential for growth still exists. This growth will be fostered by many factors, including access to markets, effective regulatory frameworks, and the continuous commitment by both government and industry to innovation and improvements in the sector.
While science, research, and innovation form their own priority area under the Calgary Statement, these are cross-cutting issues that will help us achieve results in multiple areas. Dramatic improvements in innovation have supported our industry's ability to not only maintain and improve the traditional fresh items available to Canadians but also to dramatically expand those offerings. Additionally, improvements to technology and innovation have improved such areas as inputs to grow crops, how fields are monitored and augmented, the transportation of produce, new product development, data sharing, produce identification, and much more.
Public support for research is also important to ensuring that the benefits from the commercialization of new discoveries extend across the sector and not just to one private company. This enables national industries to benefit and grow and for those gains to reach more Canadians.
Examples of positive public-private investments are already reaping rewards for both our sector and for Canadians. After fire blight nearly decimated the Canadian pear industry, Agriculture and Agri-Food Canada researchers developed a new pear that was resistant to the disease and had a longer shelf life. This, combined with investments in storage technology, allow for this Canadian pear to be available on grocery shelves from November through to March. After 20 years of development, the Vineland Growers Co-operative launched the Cold Snap pear to consumers in November 2015. The variety is now licensed to Canadian industry and grown in Ontario and Nova Scotia, and plantings of this Canadian variety have also begun in Europe and the United States.
The produce industry faces many opportunities, but also many challenges. Labour, environmental sustainability, and consumer demands are all areas that fit under the new policy framework, and I'm going to quickly touch on a few of these now.
We are all aware that the availability of labour is an issue for our sector, and without labour all else fails. The Canadian Agricultural Human Resource Council estimates that horticulture represents 50% of the labour gap in Canadian agriculture; that means the horticultural sector is short over 29,000 workers. This highlights only the shortage at the grower level and does not include shortages through the rest of the supply chain, which would surely add thousands more. Automation and robotics are used in planting, picking, and packing of produce, all helping to reduce the demand on labour while also reducing waste and improving productivity, but automation cannot replace all labour needs.
Another challenge is environmental sustainability and the need not only to reduce the use of inputs like water and crop protection tools but also to meet emission reduction targets and adapt to our own changing climate. Technology has already allowed us to make substantial progress in these areas. Drones and other innovations are being used to monitor fields, improve irrigation, and reduce the use of pesticides and other crop protection tools, but more can be done, and investment in innovation will be essential to getting us there. As well, while support for environmental sustainability is critical at the grower level, it should not be forgotten across the rest of the supply chain.
The third area noted is the changing tastes and demands of Canadians. This is both a challenge and an opportunity for our sector. As Canada's population becomes more diverse and consumer demands become more complex, research support can help Canadians and the fruit and vegetable sector meet complex demands through the development of new varieties and the adaptation of non-traditional crops to be grown in Canada.
Along the same vein, different age groups have different expectations in terms of product offerings and convenience, not only in Canada but on a global level. Our industry has been at the leading edge in providing value-added products to consumers to meet their demands for ready-to-eat products that fit their busy schedules, from bagged salads to pre-cut apple slices to pre-made cauliflower rice. Support for innovation in this area is important, not only to ensure the continued development of new and exciting products that make eating a healthy diet easier for Canadians but also to support research to address the different food safety concerns for these products.
Additionally, I do not want to omit the growing issue of food security. Food security is a concern for both industry and government. Innovation and research in the produce supply chain supports long-term solutions in food production, distribution, and storage infrastructure for rural, remote, and northern communities, and the scope of this issue should find its way into the framework moving forward.
Support for innovation does not only mean support for research and development of new technologies in Canada, but also ensuring that Canadian agriculture is able to assess the latest technology from all over the world. For example, some of you had the opportunity to visit Peak of the Market in Winnipeg and witness their state-of-the-art equipment in their packing facility in action. It was funding under Growing Forward 2 that helped Peak make these investments. They received support to purchase equipment that included new robots with custom-designed hands capable of filling retail bins, a custom-made unloading and pallet system, metal detectors for all packed products, and an automated pallet replacement system. In addition to a projected 30% increase in productivity, the new equipment also helps ensure a higher quality of produce reaches the consumer, reducing bruising and damage to vegetables and creating a better work environment for staff. While the majority of the new equipment was made in Canada, some pieces were sourced and customized from the Netherlands, Germany, and the United States.
The funding model moving forward is vital. The foundation for Canada's fresh produce supply chain is made up of approximately 25,000 small, medium, and large-sized farms that produce vegetables, fruits, and potatoes. The produce industry is one of narrow margins with little bandwidth to absorb rising costs. It is critical to the sustainability of the industry that research and innovation enable the industry to increase its productivity and reduce costs. There is strong support within our sector to continue with the model of 75% government and 25% industry funding for research, but there are concerns that the contribution from government could decrease. There is little ability in our industry to increase the dollars devoted to these research projects at this time. A decrease in the ratio of the government contribution for research projects will only have an effect of decreasing the number of projects overall.
In closing, it is critical that the next agricultural framework allow for flexibility to meet changing needs. In the coming months, our industry expects the publication of the Safe Food for Canadians regulations. This is significant regulatory change, and support will be needed to ensure that our sector and the agrifood industry is able to meet the new requirements being delivered in the coming years.
Given the substantial investment that our federal and provincial governments will be making under this framework, it is important to ensure that the regulatory burdens are not counterproductive to our efforts. A responsive, science-based regulatory framework that allows for the timely approval of new ingredients, product, and processes is essential.
Support under the framework must also be matched by support to achieve these goals through other means. Market access concerns for fresh produce are normally non-tariff barriers related to food safety or plant health. Industry alone cannot meet the requirements of foreign governments in these areas. If AAFC and CFIA are not adequately resourced to respond to plant health and food safety requests from our international partners, other support or investment to market access will have little results.
Moving forward, we must remember the demands of tomorrow cannot always be foreseen. The Canadian produce industry works in a fast-paced market and needs to be flexible to meet changing demands. Government support should work to be reactive and flexible to enable our businesses to grow.
Again, thank you for the time. I look forward to your questions.