On one hand, depending on their product line and the markets they serve, most dairy processors saw their revenues drop between 0% and 50% due to the decline in the food and hospitality market.
On the other hand, dairy processors saw an increase in their costs related to COVID-19, such as increased absenteeism, the cost of personal protective equipment and health screening tools, and increased worker distancing that reduced production capacity.
The combination of declining sales and rising costs means that many dairy processors are under significant financial pressure due to much lower or even negative bottom line results.
We thank the government for agreeing to the industry's request to increase the Canadian Dairy Commission's line of credit to $500 million. We also recognize the emergency support programs announced by the federal government to mitigate the impact of the COVID-19 pandemic.
However, these programs are often insufficient to meet the needs of food processors. Therefore, we recommend the current support programs be expanded in two ways.
First, the $77.5-million emergency processing fund must be increased significantly. It is also important that all food processing sectors be treated equitably when the program funding is allocated.
Second, as it is currently structured, the Canada emergency wage subsidy will leave some food manufacturers without support because revenue declines will not meet the 30% threshold in April and May. We propose that the government make changes to the program by providing a sliding scale of support for income reduction between 10% and 30%.
Now Mr. Barrett will take over.