Thank you, everyone.
First, I would like to thank the members of the committee for inviting Whyte's Foods here today. It's an honour for Philippe Blondin and me to be able to share this information with you and hopefully represent the voice of our industry.
We are the largest pickle and pepper manufacturer in Canada, and are also sadly one of the last. Our company began just outside Montreal in 1892. Since that time, we have not only been manufacturing and selling food to the Canadian market, but we have been employers, buyers and charitable givers to our community.
Since our company was founded, we've purchased the Mrs. Whyte's brand, the Coronation brand from Kraft Foods, and finally the Strub's brand in 2012 out of bankruptcy. Each of these pickle and pepper manufacturers struggled to remain alive in Canada for decades prior to our acquisition of them. In 2011, the Bick's brand left Canada and moved to the United States. We are, in effect, the last one standing in our industry.
Two years ago we decided to open a new facility. We saw many advantages to operating south of the border, including lower minimum wages and often less restrictive business environments; however, we chose to stay in Canada. We have always chosen Canada. We are now, as I said, more or less the only ones left in Canada in our industry, and we are so proud to still be here.
Our relationship to the communities in which we work runs deep. In Saint-Louis, we are the town's largest employer. In Wallaceburg, we're providing jobs in a previously extremely underemployed region of Chatham-Kent. We buy from local farmers and view ourselves as members of the community. We have always taken our role as corporate citizen extremely seriously. We support local charities both financially and with our human resources. Without us, jobs in the cities in which we operate would be lost. Many Quebec and Ontario farmers would be unable to sell their crops, and the communities we call our own would suffer significantly.
The agriculture and agri-food sectors are Canada's largest employers. It's easy to forget this from our urban centres, but we are the engine of our national economy and we are rooted in our national identity. Imagine the Canadian landscape without our farmers and without our rural communities. We're here today to make clear that an omission to help us during this challenging time will make that sad vision a reality: a Canada with far fewer farmers, with significant unemployment, with rural decay, and with an entirely imported food supply.
Starting a business like ours takes significant investment and, for those who are not as committed to Canada and to our farmers as we are, there is little reason to be here. Operating out of Ohio or Michigan is cheaper and provides easy access to our markets. Without the support of our government, losses that result from the pandemic to the agri-food sector will not likely be gained back in years to come. As we at Whyte's are pivoting to be retail packers, Canada will be forced to pivot into being exclusively an importer of agricultural goods. I hope you agree with us that this is not the Canada any of us recognizes or desires.
As a company that views itself as a community member, we prioritize the safety of our team above all else. We have slowed production in order to maintain social distance, bought as much PPE as we could and engaged in training and safety precautions everywhere possible. This is costly and time-consuming. We, like all of you, are aware not only of the closure of meat-packing plants in Canada, but also of many non-meat food manufacturers in the United States that have closed due to COVID but have received less press.
The risks of the virus hitting our plant, and us having to shut our doors during crop, are very real. We are doing all we can to avoid this, and to make our team feel safe coming to work each day. We would have it no other way, but we need help to continue to do this. We have invested $52 million in our facilities in Canada in the last few years, including $23 million in our new facility in Chatham-Kent.
Prime Minister Trudeau recently said that more needs to be done, when he referred to the programs being offered to sustain the agricultural industry in Canada. We are here to echo very clearly that yes, indeed, more needs to be done. We have lost our food-service sector, which has left companies like ours to fight in a crazy game of survival in which we are forced to become almost entirely retail providers.
As anyone who understands food manufacturing knows, this is neither easy nor cheap. We are facing staggering wage increases to combat current unemployment subsidies, and receiving notifications from retailers about their commitment to maintaining current prices. We have inventory that was planned for restaurants but that will go to waste. We are awaiting a rapidly approaching single annual crop in Canada and have neither the manpower nor the resources to equip ourselves to process it in time. This likely means that the shelves of our grocery stores will see shortages as we move into the fall. I would encourage you to look through the middle aisles of your grocery store and note how many items require product from local farmers and food processors like us. Any company like ours that produces both retail and food service, which is most of us, is very likely to be unable to transition quickly enough to fill those shelves and replace the food service business we have lost. Add to this that profits from food service sales are gone and you can begin to imagine our reality: lost margins, massive operational expenses as we transition, increased wage costs and wage shortages, inventory going into the garbage and little room to increase prices.
The natural conclusion to this is empty shelves, the destruction of our agri-food industry, significant damage to growers and eventually the loss of rural life. I don't mean to sound bleak, but hungry Canadians and deserted rural towns are the inevitable final chapter of this story if we are not afforded assistance. This assistance needs to be both generous and swift. Our crop is around the corner, and it doesn't come back for another year.
As a result of our large investment in a new plant in southwestern Ontario, we were proudly able to bring a great deal of business back to Canada that was lost to the United States many years ago. Due to this recent growth, and the metric currently used to assess wage subsidies, we cannot qualify for programs like the 75% wage subsidy. We have lost over 40% of our sales compared with last year, but this truth is hidden by the growth brought from our new facility; in other words, what appears to be sales growth is in fact not growth at all when one considers the expenses incurred in the last few months to accommodate much greater growth. Our costs continue to be in line with this anticipated growth from our new facility. We have lost almost all food service sales and are therefore left at a very significant loss, with no government help.
We ask that the parameters around certain programs be more flexible so they can be fair to everyone. Companies like ours that have invested in growth in Canada and are providing more jobs and supporting more growers in Canada than last year cannot be measured against last year’s pre-expansion sales. We need to be measured against what the reasonable growth expectations were when we built a new facility and invested so heavily in Canada. The current metric effectively penalizes us for providing additional jobs and buying more from our farmers. Companies with no planned growth are rewarded for cutting jobs and losing sales. This was not the intent of the wage subsidy, but it is certainly the result of the current system.
In conclusion, we are asking our government for help to cover the costs of wage increases, the changes we made to our operations to accommodate more retail production, the crop we paid for and cannot use, the lost food service inventory and for keeping our team safe. I am asking for help not because this is all about money, but because this business is full of people that my family have worked with for 20, 30, and even 40 years in some cases. These are people I consider friends and care about deeply. This is not just a numbers game: These are human beings who have worked hard their whole lives, who love their work and the community of growers and customers we have all known for a lifetime.
I received an email recently from a colleague who has worked in our plant in Laval for over 30 years. She asked us not to give up on them, because they need us right now, so today I pass along her message: We need you, the Canadian government, on behalf of the Canadian people, to decide that agri-producers, growers, rural communities and the Canadian food supply chain matter enough to keep us alive, and that we, as a company full of loyal, hard-working, smart people, deserve to survive this pandemic.
Thank you for your time.