Thank you.
Good afternoon. My name is Rob Lipsett and I'm a beef producer from Grey County, Ontario. I'm the president of the Beef Farmers of Ontario. Joining me today is BFO's executive director, Richard Horne. Thank you for the opportunity to appear before you today.
While the COVID-19 pandemic has heightened the focus on processing capacity, the beef sector across eastern Canada has had to contend with capacity challenges for some time due to a variety of factors that have led to periodic supply bottlenecks, significant negative pressure on farm gate prices and lost market opportunities.
Over the last five years, federally inspected processing utilization in eastern Canada increased from 71% in 2015 to 100% in 2020. In addition, Ontario provincial processing numbers are up approximately 20% over 2019 and the five-year averages. Some beef farmers must wait four to six months, and in many cases up to one year, to have their cattle processed at provincial facilities. CanFax estimates that shortages in beef processing capacity equated to $129 million in lost revenue in 2020 for farmers in eastern Canada.
To enhance processing capacity, we recommend four key areas of focus. They are strategic investment in the sector, addressing labour shortages, addressing regulatory differences between Canada and the U.S., and creating permanent tools to help mitigate processing disruptions.
First and foremost, continued government investment in the sector is needed. We need to simplify programming and ensure funding windows have enough runway to allow facilities sufficient time to plan and execute. Focus programs on outcomes and stop limiting what and how businesses can invest in capacity growth. Funding priorities should be placed on projects with the greatest ability to expand production capacity. A combination of cost-share funding, no-interest loans and non-repayable loans should be offered to assist with capital investments to spur production and improve efficiencies.
Between 2008 and 2017, Canada's agricultural exports grew three times faster than the Canadian average. Last year, Canadian beef exports grew 17% and opportunity for further growth remains. The sector's ability to maintain jobs through COVID-19 makes agriculture a priority for economic recovery. To capitalize on export opportunities, we recommend creating an industry export development fund to assist export diversification efforts and address trade barriers. For example, the fund could enable processors to apply for matching funding that would support enhanced capabilities to segregate eligible product, support modifications to food safety interventions to meet country-specific requirements or make strategic investments that spur growth and improve efficiencies.
Access to labour is another issue of concern. A study was done by Food Processing Skills Canada indicating that the meat sector had a job vacancy rate of about 13%, compared to other food companies that averaged 2% to 4%. In Ontario, this equates to approximately 2,400 vacant positions and $1.2 billion in lost productivity. A domestic strategy to attract, train and retain the workers by providing investments and supports in training and education is needed. A refocus of foreign worker programs into permanent programs is also needed. The agri-food labour pilot was a good first step, but we need to be doing more. There are dozens of countries with ample supplies of workers willing to come here and fill the jobs. Pathways need to be created to facilitate this.
I'll now turn it over to Mr. Horne to complete our presentation.