Agriculture Committee on Nov. 19th, 2020

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Seppey.

Thank you, Mr. Steinley.

Unfortunately, we are out of time.

Mr. Louis, for five minutes.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you all for being here. I very much appreciate this.

I am wondering if you could tell me about got interprovincial travel and trade as well. That's something that gets brought up from time to time, the fact there are different credentials for federal and provincial.... What kinds of steps are we taking to work on that basis to procure co-operation for our food processor?

I'm not sure who would want to answer that question.

[Frédéric Seppey]

Perhaps I can start, Mr. Chair, with your permission. My colleague from the Canadian Food Inspection Agency may wish to add.

I gave a number of examples. For example, allowing exemptions from the requirement that if there's interprovincial trade in meat products they have to be produced in federal plants. That's one venue.

An unprecedented level of federal-provincial-territorial co-operation on regulatory issues is under way. It has always been like that, but since the beginning of the pandemic, that collaboration has been more intense than ever. Therefore, regulators are discussing concrete problems that may exist. To give an illustration, in Nova Scotia there are meat plants that would like to reach the level required for a federal establishment to export outside the province. These issues are being discussed between CFIA and the Government of Nova Scotia.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I appreciate that.

I know that my colleague had previously mentioned protecting our workers. That's important to all of us. Can you explain what steps we have taken as a government to help some of the food processors make sure that their workers stay safe so we can keep food on the table?

[Frédéric Seppey]

My colleague Madame Iuliano from CFIA will probably have things to add.

I would make a very quick point. In addition to what Theresa mentioned earlier, we are working closely with organizations such as the Canadian Meat Council, the Canadian Centre for Occupational Health and Safety, and the Public Health Agency of Canada to ensure that operators have all of the guidance and policies to understand what are the best practices to put in place to ensure the safety of workers, as Mr. MacGregor indicated before.

I don't know, Theresa, if you want to add to that.

[Theresa Iuliano]

Thank you.

Obviously, the CFIA plays a critical role in providing service to food processing establishments. Because of that critical role, we make maintaining the safety of our employees a number one priority. Our staff work very closely with the industry to ensure that we are putting in place the appropriate risk mitigation, including personal protective equipment, following public health guidelines and working closely with the establishments to minimize any unnecessary physical contact.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you.

Maybe I can stay with CFIA questions. We also have to make sure that our inspectors themselves are protected and safe. What kinds of challenges did you have, especially in the beginning of this pandemic, in making sure that these inspectors could get their jobs done but remained safe as well?

[Theresa Iuliano]

I think that in the early days of the pandemic one challenge was ensuring that we had an adequate supply of personal protective equipment. As soon as the public health guidance on the provision of non-medical masks evolved, we acted immediately to ensure that our front-line staff had access to the appropriate personal protective equipment, including face masks, face shields, visors, wipes, as required.

We also took measures to ensure that our staff were delivering critical services in person only when required, and to deliver services remotely where that was feasible. Those were some measures we've taken to protect the safety of our staff.

Through an investment of $20 million that was made in the agency, we've used those funds to hire emergency staff to bring in previously retired inspectors to work with the provinces to increase inspection capacity, all of that with the intent of reducing pressure on the current workforce, to make sure we could continue to deliver those critical services.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Iuliano.

Thank you, Mr. Lewis.

Mr. Perron, you have two and a half minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

I'd like to come back to the emergency processing fund. Of course, there wasn't enough money. Small processors told me that they received a vague response from government officials, saying that the funds had run out or that they couldn't be guaranteed to receive the money. Sometimes, companies have already started to make investments by the time they get that answer.

Don't you think it would be wise to increase this kind of investment?

[Frédéric Seppey]

Thank you for the question.

This is a policy question, which should be addressed by Madam Minister.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

So I understand that the funds are depleted, the needs haven't been met and more money is needed.

I'm going to move on and talk to the Canadian Food Inspection Agency representatives.

At a convention of the Union des producteurs agricoles, or UPA, in 2019, a cheese producer spoke. She said she herself found samples of 23 foreign cheeses that did not pass 200 inspection points. Quebec's minister of agriculture, fisheries and food, Mr. Lamontagne, who was on hand, responded by saying he wants to be a leader in standards reciprocity.

At present, it seems that we are having difficulty establishing reciprocity of standards. If we want our processors to be dynamic and present everywhere, there needs to be a level playing field for products coming into Canada from abroad.

Do you have an action plan to increase resources for this purpose? How do you see this problem?

[Tammy Switucha, Executive Director, Food Safety and Consumer Protection Directorate, Canadian Food Inspection Agency]

Thank you, Mr. Chair. I'd be happy to answer that question from the member.

First, I'd like to begin by stating that the Safe Food for Canadians Act and regulations require that imported food must meet all the same regulatory requirements as food that's produced in Canada, so when it comes to imports, all imported products are treated equally, as they would be treated for those that are produced and sold in Canada.

The CFIA undertakes various activities to ensure compliance of imported products. Before they leave their countries, we also work at the border very closely with the CBSA to ensure that products entering Canada meet all Canadian requirements. Then, when they arrive in Canada, we do engage in post-border activities. We do testing and we do follow-up compliance and enforcement activities to make sure that those products meet all Canadian requirements.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Switucha.

Now we'll go to Mr. MacGregor for two and a half minutes.

Go ahead, Mr. MacGregor.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you, Mr. Chair.

I again want to revisit the issue of our meat-processing capacity. This of course has been a huge topic for the committee. We've heard a lot of reports from many witnesses about how the over-concentration of meat-processing capacity in Canada, while it has been very efficient in the past, has certainly been one of our weak links.

I have a specific question. Back in August in the province of Ontario, it was reported that the old Ryding-Regency meat plant had been going through its final inspection. I think the plant is being renamed. It's under Tru Harvest Meats.

The Beef Farmers of Ontario were quite excited about this because, of course, they are suffering from a lack of meat-processing capacity in Ontario, but we are now in November and we still have yet to hear from the CFIA as to whether this plant is going to restart. Given the situation we find ourselves in, is the CFIA able to comment on this specific application? Can we expect some news on it soon? I know that a lot of farmers would like to hear some good news on that front.

[Theresa Iuliano]

I'm afraid I can't comment specifically on the application itself. When an operator chooses to make an application for a licence, that's a business decision on behalf of the operator, and we will assess those licence applications on a case-by-case basis.

I can tell you that we have a process in place and that we stand ready to work with the operators as those licence applications come forward.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you, Chair. Where am I at with time?

[The Chair, Liberal, Pat Finnigan]

You're at 35 seconds.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Very quickly, does the federal government regard the concentration of meat plants like the old model we operate under as a threat to food security? Is it part of its strategic plan going forward? Is it going to be a big part of trying to diversify those operations?

[Frédéric Seppey]

Perhaps I can try to respond very quickly.

First, it varies from one sector to another. Under the emergency processing fund, we had one stream that was specifically to address imbalances at the regional level. That's one element that is on our radar.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Seppey.

Thank you, Mr. MacGregor.

Unfortunately, that's all the time we have for the first hour.

I want to thank the Canadian Food Inspection Agency, Ms. Iuliano and Ms. Tammy Switucha; and also the Department of Agriculture and Agri-Food, Mr. Warren Goodlet, Monsieur Frédéric Seppey and Marco Valicenti; and also the Department of Industry, Sheryl Groeneweg.

I thank you all for updating us on the situation in the food processing sector in Canada and also for your hard work in keeping Canadian food and Canadian people safe. Thank you so much.

We shall have a small break for a few minutes to bring in the next panel. The clerk will let us know when we're ready. Thank you so much, all of you.

[The Chair, Liberal, Pat Finnigan]

Welcome to the second hour, and to the second panel for our study on processing.

From the Deans Council-Agriculture, Food and Veterinary Medicine, we have Martin Scanlon, dean of the faculty of agricultural and food sciences at the University of Manitoba;

We also have Christine Theoret, dean of the faculty of veterinary medicine of the Université de Montréal.

from Food, Health and Consumer Products of Canada, we have Michael Graydon, chief executive officer;

Finally, we have Jean-Sébastien Gascon, director general of the Société des parcs d'engraissement du Québec of Boeuf Québec.

You each have seven and a half minutes for your presentations.

Mr. Scanlon, we'll begin with your opening statement.

[Dr. Martin Scanlon, Dean, Faculty of Agricultural and Food Sciences, University of Manitoba, Deans Council - Agriculture, Food and Veterinary Medicine]

Thank you very much for the opportunity to speak here today on behalf of the Deans' Council to discuss food processing in Canada, a topic that's even more critical in light of the COVID-19 pandemic.

After a brief introduction to the Deans' Council—Agriculture, Food and Veterinary Medicine faculties, we wish to address two things. The first is the importance of innovation and innovation training for building an internationally competitive food processing sector. Second is the importance of taking an integrated approach to the continuum that is environmental health, animal health and human health. Canada's food processing industry is an integral part of that continuum.

The Deans' Council is a pan-Canadian network of eight agricultural faculties and five veterinary colleges for training, research and knowledge translation. It's really a core to the national ecosystem in food, agriculture and health. Indeed, as one of the world's most advanced producers of food, Canada does have a leadership role to play in meeting the expanding requirement of the globe for quality nutrition.

As a result, Canada's communities and trading partners must have confidence in the integrity, resilience and safety of our food system. It's important to emphasize that the Deans' Council faculties not only hold the talent, but they're also responsible for developing the talent and the knowledge that will enable the tremendous economic and export growth potential of Canada's agri-food sector to be realized.

Our faculties also contribute to public confidence in the integrity and safety of Canada's food system, and they also shield it and potentially also our health care system from future infectious disease incursions, food safety threats and environmental risks.

About a year ago the Deans' Council worked with Industry, Science and Economic Development Canada to produce a report examining the path to growth for Canada's food and beverage processing sector. More specifically, ISED asked us how the Deans' Council could help cultivate a skilled, innovation-minded workforce. How could we also marshal the enormous research and development capacity within our faculties to address the short, medium and long-term goals of a transformed food sector?

In the report to ISED Canada, we made various recommendations that our analysis showed were necessary for attracting a diverse set of students to our faculties, and that way we could ensure that there was a broad range of ideas and creative solutions to both ingredient and process innovations.

One recommendation was the need for renewal of core infrastructure that is absolutely vital for student training as well as for research. It's worth noting that hundreds of scientists and indeed thousands of students in our faculties conduct internationally recognized research that fuels ingredient innovation for Canada's crops and livestock. They also devise process science innovations for retooling Canada's small to medium-sized enterprises. As you're likely aware, it's these SMEs that dominate Canada's food processing landscape.

When we did this, though, as deans we recognized that we couldn't take a narrow perspective on just renewal of infrastructure for the food process sector, because consumer choice and confidence in food is increasingly driven by considerations of this important lifeline between human health, animal health, plant health and environmental health. The intimacy of this lifeline is recognized through a one-health concept, a concept that's been endorsed by the World Health Organization and the Food and Agriculture Organization as the way to tackle zoonotic disease threats.

Renewal of the research, innovation and training capacity in our veterinary and agriculture facilities must be a priority if we're realistic in our aspirations to turn natural capital, through our human capital, into an international leadership position for our agri-food industry.

An investment into unique, cutting-edge, highly connected national initiatives will provide the evidence that Canada is willing to protect its borders and its communities from current and future infectious diseases and food safety threats. The investment will also fundamentally strengthen Canada's economic recovery from this pandemic and prepare us for future pandemics.

The first of these investments, “growing Canada”, is directed to training and research capacity in sustainable ag and food processing. This will integrate the academic innovation that's spread across the country for the prospering of Canada's agriculture and food processing sectors. The second, “one health Canada”, will integrate science and data-driven approaches to human, animal and environmental health risks: these risks have been starkly evident over the past year, but it will also propose solutions to these threats. These two initiatives are interconnected and interdependent, and both are vital elements for the economic and social progress of a growing agri-food sector.

As Monsieur Seppey had talked about earlier on, this is warranted not only by the size of the industry, its importance to our national economy, but also its effect on the employment sector. One point Monsieur Seppey emphasized is the fact that both these metrics, the employment and the size of the sector, are growing faster in the agri-food sector than in other sectors of the economy.

In closing, the Deans' Council would emphasize one salutary lesson from COVID: we cannot take our food system for granted. We ask you to use the Deans' Council as a valuable resource for both building talent and knowledge creation for the agri-food sector. It's this innovation-focused perspective on the development of the tools and the talent in agri-food and veterinary science that will sustainably fashion the long-term economic and social benefits of Canada's agri-food system.

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you very much, Mr. Scanlon.

Now, we have Food, Health and Consumer Products for seven and a half minutes. Go ahead.

[Michael Graydon, Chief Executive Officer, Food, Health and Consumer Products of Canada]

Good afternoon, Mr. Chair and members of the committee.

I'm Michael Graydon, chief executive officer of Food, Health and Consumer Products of Canada, the leading voice of Canada's largest manufacturing employers. The food, health and consumer products sector employs more than 350,000 Canadians across businesses of all sizes that manufacture and distribute the safe high-quality products that are at the heart of healthy homes, healthy communities and a healthy Canada.

We transform Canada's agricultural riches into value-added finished goods that feed families here at home and around the world. We work closely with Canadian farmers and are the single largest employer in rural Canada, serving as a critical link between rural and urban communities. We are present in every region across the country, providing good-paying jobs, strengthening communities and adding more than $39.9 billion to the economy each year.

Key initiatives like the national food policy, the agri-food economic strategy table and the food processing industry round table have all recognized the critical importance of the agri-food industry, and in particular the potential for value-added food manufacturing to make Canada a global leader in food production and innovation. Our sector is a necessary engine for jobs, growth and self-reliance.

Today I'll focus on two of the top constraints facing the Canadian food-manufacturing industry: first, a chronic and growing labour shortage that has left one in 10 job vacancies in our sector unfilled; second, unfair practices from grocery retail giants that harm Canadian farmers, grocery suppliers and consumers.

For Canada to be an attractive destination for investment, we must be able to attract and retain workers, yet labour gaps continue to worsen for food manufacturers, with nearly 28,000 job vacancies. Jobs in our sector pay well and should be in demand. Hourly wages for food manufacturers have increased by 16% compared to the previous year, with an average wage of $24 an hour. That's 60% higher than the highest provincial minimum wage. Food manufacturers have also stepped up to invest heavily in keeping workers safe through the COVID-19 crisis, to provide incentives to workers and to increase employee engagement and appreciation incentives.

Despite our efforts, labour challenges persist, and we ask the government to incentivize unemployed Canadians to take these jobs, to continue to help ensure predictable and timely access to workers outside of Canada to fill the domestic labour gap, to provide support and incentives for companies to invest in automation, and to convene a round table with food manufacturers to discuss these labour challenges and work together towards solutions.

If Canada truly prioritizes jobs and growth, it must also urgently correct the second constraint that I'd like to raise today: unfair practices by a handful of powerful grocery retail giants. Just five grocery retailers control more than 80% of Canada's grocery stores and drugstores, creating a significant power imbalance over manufacturers, farmers, suppliers, small retailers and consumers.

Some grocery retail giants have exploited this power to impose unfair and unethical business practices that hurt everyone else who grows, makes, buys or sells food and other essential products. For far too long, some large grocery retailers have used farmers and suppliers as a piggy bank, imposing arbitrary fees, raising costs and paying suppliers less than they are owed, all while charging shoppers more and more.

The consequences are severe. When farmers and suppliers are forced to pay retail giants' bills, they struggle to pay their own and must cut back on innovating new products, investing in new facilities and creating new jobs. Made-in-Canada food becomes more expensive, and our food system weakens. Consumers have fewer, more expensive choices; workers lose job opportunities; and, Canada is already losing investment to more competitive countries.

Now, in the midst of the ongoing pandemic, companies like Loblaw and Walmart have doubled down on this bullying behaviour, forcing suppliers to fund retailers' expansion, all while making record profits. New fees imposed by Walmart and Loblaw alone cost suppliers an estimated $1 billion per year, bringing the total cost of getting and keeping products on store shelves to an estimated $6 billion a year, with no tangible benefit to the suppliers or to consumers.

Canada's grocery giants may control the majority of stores and shelves in the country, but it's time that we all remember there would be nothing to sell without food and other grocery suppliers.

Proven models, such as the U.K.'s groceries supply code of practice, with a dedicated enforcement agency, have shown significant success in restoring balance and fairness to the relationship between grocery retailers and the suppliers, while keeping food-cost inflation low. A recent statutory review confirmed that the U.K. code has improved communication, collaboration and efficiency while maintaining flexibility in the food supply chain. It resulted in clear benefits for all stakeholders. The code's results prove that strong oversight and good governance are good for business and good for consumers.

We are calling on the provinces and territories to lead the way in implementing an enforceable code of conduct, similar to the U.K. model, that holds large grocery retailers accountable for fair treatment of suppliers. We also urge the federal government's leadership to develop a common framework that would be used by provinces and territories to avoid a patchwork approach of various codes of conduct.

It is long past time for governments to take seriously the negative consequences of unfair practices by Canada's grocery giants. Leaders across the supply chain agree that failing to do so will threaten food security in this country, weaken our essential supply chains, hurt consumers and jeopardize Canadian growth, jobs, and the COVID-19 recovery.

I thank you, Mr. Chairman, for your time.