Thank you, Mr. Chair and members of the committee, for inviting us to appear today. My name is Sylvie Cloutier. I am the CEO of the Quebec Food Processors Council and the chair of the Canadian Council of Food Processors. I am here today with François Couture, a senior adviser and expert in food innovation.
The Canadian Council of Food Processors, CCFP, is an alliance of all provincial food processors associations, and represents collectively over 1,500 Canadian companies from all regions of Canada, ranging from small independently and privately owned companies to larger public businesses.
The food and beverage industry is the most important manufacturing sector in Canada and in many provinces. The sector employs 300,000 Canadians across the country, making it the largest employer in the Canadian manufacturing sector. It has over $90 billion in shipments annually.
If you don't mind, Mr. Chair, I will continue this presentation in French.
The food processing industry is the primary client of Canadian agricultural producers. For example, in Quebec, the food manufacturing sector buys and processes more than 70% of the province's agricultural production. The food industry adds value to agricultural products, creates jobs, generates revenue and contributes significantly to society.
The industry is facing challenges such as opening up markets, increasingly fierce competition, food integrity, major regulatory changes, the ability to respond to consumer demands and to health and other trends, while ensuring our companies' ability to innovate.
In addition, the financial pressure on our food companies, coupled with the precarious state of some, reduces their ability to compete, innovate and grow.
As you may have heard by now, there will be between 9 and 10 billion mouths to feed on the planet by 2050. Canada already has the enviable reputation of being the breadbasket of the world, but how are we going to maintain that reputation and to position ourselves as a world leader to meet multiple demands? Canada must quickly adopt a vision and an action plan, and the government has an important role in mobilizing and supporting its food industry.
It is clear that the food processing sector has not yet received its fair share of funding under the current program, Growing Forward 2. The food processing sector is overwhelmingly under-represented, with barely 5% of the overall spending earmarked for programs, research and innovation. This shortcoming needs to be addressed with the new five-year policy framework and the government must be fair to its largest manufacturing sector in Canada by investing in innovation, research and development, new technologies, equipment, market access, acquisition of strategic information and so on.
A massive investment in the food processing industry would help develop the sector, as well as maintain the added value and the jobs in Canada.
We support the major policies outlined in the Calgary statement, specifically those related to markets and trade, science, research and innovation, and the processing of value-added agricultural and agri-food products.
In fact, investments to keep our companies competitive and help them bring their products to market are essential. Promoting Canada's reputation abroad for the quality and safety of our products is important, but it is not as important as government support for companies' development activities such as equipment upgrades, access to strategic information on new markets, access to skilled labour, or access to capital to fund infrastructure projects.
We believe that priority must be given to research and innovation. With the opening of markets, innovation is a key component of the sector's competitive advantage. Research and innovation stimulate the productivity and competitiveness of the agri-food sector and will secure the industry's growth and sustainability. That's the way to go if we want to be a global leader and if we want to provide value-added products to the world. Continued funding in science, research and innovation from the private and public sectors to foster a culture of innovation within our businesses is essential.
SMEs in the Canadian agri-food sector with fewer than 500 employees represent 99% of our businesses, 85% of our jobs, 45% of our research and development expenditures, and 49% of our shipments.
We are all aware of the importance of SMEs and the role they play in economic growth, or in the GDP, in the number of facilities and in terms of employment across Canada.
We have seen a decline in R and D investment in agri-food SMEs. We rank 22nd among the OECD countries in terms of corporate spending on research and development in all sectors.
Yet, the role of innovation in the agri-food sector is essential for people's quality of life. We believe that effective solutions need to be developed quickly, taking advantage of the networks that connect agriculture, food, health and environment with the concerns of society.
SMEs in Canada are struggling to find the tools they need to innovate and compete better with other companies globally and in Canada. They need help to have a variety of platforms, tools, resources, networks and levers for open and collaborative innovation.
The government needs to strengthen the agri-food sector's capacity to respond to emerging sector challenges and priorities by improving knowledge transfer activities while encouraging continued industry leadership.
Thank you for your time.