Thank you, Mr. Laurin.
Mr. Chair and honourable members, thank you for giving us the opportunity to appear before you today to brief you on our industry's response to the COVID-19 crisis and on what we are doing to meet the expectations of the government and Canadians.
I want to begin by saying, on behalf of all of our members, that we are taking very seriously our role of industry designated as an essential service, immediately following health and safety services.
Since the beginning of the crisis, two primary objectives have guided our actions as industry. The first is ensuring the health and safety of people who work in our facilities. That includes not only our employees, but also all Canadian Food Inspection Agency inspection staff who must be on site at all times in our slaughterhouses.
Our second major objective is to keep our factories operating, so that Canadians can continue to purchase eggs, chicken and turkey, despite all the market disturbances. Canadians are counting on us to provide them with food to eat and feed their families, and egg and poultry producers are also counting on us to process their products. We take those responsibilities very seriously. We play a key dual role of ensuring constant food delivery to consumers and, at the same time, avoiding a break in the supply chain, which consists of living animals.
Responding to the COVID-19 pandemic and making sure we meet the two objectives I just outlined has not been without its challenges for us. I would like to focus your attention on three of those challenges.
The first one is the significant costs our members have incurred to keep operating during this crisis. The second is the rapid deterioration of market conditions as demand and prices fall, especially from the food service sector. The third is that the combination of these two elements puts our sectors in an unsustainable and vulnerable position. This is why we have asked the government to adapt their measures to help us overcome these challenges.
To expand a little bit more on the first point, keeping our workers safe so we can continue to operate our plants is having a significant financial impact on our sector. For all CPEPC members just in March and April, we're talking about more than $87 million in unbudgeted costs, or a little over $3,000 per worker. Despite taking these measures, some plants have had to shut down production shifts and sometimes their entire plants for several days to ensure workplace safety.
On the second point, we had to rapidly adapt to an unprecedented level of market disruption. We've seen an overall decrease in market demand, in large part due to a massive drop in demand from our food service sector and the institutional segment. Over one-third of our production was going to that sector. Even if this market collapsed, we still had to process those poultry and egg products as if the market were still there, because we are dealing with a live product. Because of the severe market correction in the poultry sector especially, wholesale prices have also dropped significantly since the beginning of the crisis.
On the third and final point, what we want to stress is that this perfect storm creates vulnerabilities within our supply chain. Under normal circumstances in a business, cash flow drives business investment. Right now that is not the case. We have to make significant investments to keep our plants running despite COVID, but the reduction in demand and the deterioration of market conditions are putting strong pressure on our financial sustainability. For this reason, and because most of our members don't qualify under existing programs, we have been reaching out to governments to adapt and target their support measures to the unique reality we are facing.
We hear that there is $1.6 billion available to producers through business risk management programs. In our sector the impact of COVID is largely being felt by our members—hatcheries, graders and processors—but those programs are made available only to producers. We have been asking both levels of government, provincial and federal, to expand one of those programs, the AgriRecovery segment, so that the extraordinary costs incurred by processors can be eligible.
Another idea we share is to expand the Canada emergency wage subsidy using a sliding scale approach so that processors with a 15% to 30% reduction in net income could qualify.
We also welcomed the emergency processing fund and the surplus food purchase program announced a few weeks ago, and we have made recommendations on how these measures should be applied to help our industry.
I should also mention that poultry and egg processors were promised financial support to mitigate the impact of CUSMA and CPTPP. More specifically, we ask that this support focus on capital investments and on allocating the majority of import quotas to processors and further processors. Having the government follow through on its commitments is more critical than ever.
In closing, we hope we can work with you to overcome the challenges we described today—additional costs, lost revenues and an unsustainable financial situation that is resulting from this. By working together we want to ensure that we get back to a sustainable position as an industry, and that we can ensure a long-time presence for the benefit of customers and consumers.