Thank you, Kathleen.
Good afternoon, everyone.
I want to start by describing our sector. While some of you might feel that's unnecessary, we have learned through this pandemic that here in Canada, even among senior policy-makers, there is a fundamental lack of understanding of how Canada's food system operates. Without this knowledge, it's impossible for governments to adequately support us and to ensure that the food system continues to produce.
Food processing is a critical step in the food system. It's a step that takes place between primary agriculture and retail, and it represents over 60% of agri-food industry revenues in this country. While much of our fresh produce travels directly from the farm to the grocery store, the majority of the food you and I buy has undergone a transformation in one of the companies Kathleen and I represent.
When you think of your grocery store, across virtually every aisle and department—deli, baked goods, cheese, pastas, sauces, meat, flour, sugar, baking goods, granola bars—these products came to you from a food processor in this country. The work we do takes place in manufacturing plants. Food and beverage processing is the largest manufacturing sector in the country. It includes over 7,000 facilities, employing close to 300,000 workers, and it produces $118 billion in products every year. Our plants can be found in every one of your provinces, and they range in size from a few employees to over 10,000 staff.
In terms of COVID-19 and its impacts on our industry, it has hit our sector and our workers very hard. Food has been declared an essential service and “critical infrastructure”, yet our plants have continued to operate with little recognition and even less support.
Food manufacturers have virtually impossible jobs. They have been asked to keep their plants running so that people like you and me can eat. Employees and production workers have been asked to come to work every day, while their families and everyone else they know have been told to stay home. At the same time, food manufacturing is tasked with keeping our workers safe from a deadly virus while maintaining operations.
Before COVID-19, our main focus was food safety, and our plants were set up to facilitate food safety. Almost overnight, we had to pivot and introduce new ways of social distancing in closed buildings that were never designed for this.
Companies have accomplished this through a number of means.
There's certainly an increased usage of PPE or personal protective equipment, such as masks, gloves and hand sanitizer. I should note that these items are used in the normal course of operations, but of course the usage has increased during this pandemic. The challenge, though, is in both the access to PPE and the costs, which have been prohibitive. In many cases, the costs of these essential materials have escalated by several hundred per cent in the past two months of this pandemic.
There is also the introduction of health screening tools, such as thermal imaging cameras to determine whether or not employees have elevated temperatures; building temporary non-structural barriers such as Plexiglass screens, which is possible, but not in every environment; and other increased measures, such as increasing the sanitation of touchpoints, staggering shifts and staggering the use of common areas like lunch and change rooms.
The industry has pivoted very well, and a lot of the measures taken have been an extension of the food safety protocols it already had in place. That said, we do estimate that there has been a cost in excess of $800 million, which is a cost that we just cannot pass on to the consumer.
In addition, we've seen an almost complete collapse of the food service industry, only one-third of which has been made up by increased retail. Also, even retail sales have focused primarily on staple items, as opposed to the specialty items, which in B.C. in particular is a $10-billion industry largely dominated by small companies that are really specialized in innovative and unique niche products. Those items have also been in decline, even at retail.
With that, I'm going to pass this back to Kathleen, who can talk a bit about some of the liquidity strains on the industry.