Agriculture Committee on Nov. 2nd, 2022

[Kathleen Sullivan]

I don't have stats, but I can report anecdotally to you that I think there is a real recognition that, given the labour situation and also an overall desire to increase productivity, there needs to be a move to more automation, digitization and robotics. This is an industry, though, where we're not going to see the equivalent of the self-driving car. There are segments in our industry that are very hands-on. Often we're looking at small improvements in how you might apply a technology to a piece of your production line, for example, or a transition from one production line to another. Incremental technology is probably more where you're going to see changes.

To be truthful, though, through the pandemic and coming out of the pandemic, I have committees within my organization, and I can't tell you the number of times CEOs can't make committee meetings because they're on the production line when staff have called in or when they've lost staff. The ability for most companies to be forward-thinking and forward-planning is very stunted right now, because folks are dealing with the challenges of varied supply chains. It can be the challenge of pallet shortages or sugar shortages. We see these different problems pop up every week or so.

I think we really need to step in and find ways to help the companies in order to facilitate their ability to adopt these technologies.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay. Thank you.

Tim, it's over to you.

[The Chair, Liberal, Kody Blois]

You have a minute and 45 seconds, Mr. Louis.

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

I'll do what I can.

I appreciate all the witnesses' time.

Maybe I'll go back to you, Mr. Paul. You mentioned recommendations about port infrastructure and rail infrastructure investments. We've heard testimony recently from CN Rail and Canadian Pacific that the climate crisis is affecting our supply chain. Wildfires, floods, extreme cold weather, all of this is affecting our transportation.

Would it be fair to say that the climate crisis, with the extreme weather, has played a part in the need-to-do investments in port infrastructure and rail infrastructure? What do we need to do as far as investments in climate resilience are concerned? What recommendations would you have for our short term and long term?

[Stephen Paul]

In terms of the climate impact on the supply chain, I think the biggest thing we've learned from events of the last couple of years is diversification. When events such as last year's atmospheric river in B.C. happen, how do you then pivot and go to different areas, whether it be, in this case, Prince Rupert, Montreal or Halifax? How do you do that effectively? We saw a lot of people trying to pivot and look for solutions.

What happens is that there is no surge capacity. There is no infrastructure in place to allow us to simultaneously move and shift where needed. Whether it's a result of climate change or whether it's a result of supply chain dynamics that are affecting it, putting elasticity in the supply chain and allowing us to really move to where it's more efficient will increase the efficiencies and the effectiveness of the exports as well as the imports. It will also change the reputation of how Canada moves exports.

[The Chair, Liberal, Kody Blois]

We will have to leave it at that.

Thank you, Mr. Louis and Mr. Paul.

Mr. Perron, it's over to you for six minutes.

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

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for being with us. I'm happy to see you here in person, Ms. Sullivan. It's always a pleasure.

My question is for Mr. Paul.

You said that the expansion of your site in Montreal took too much time, six years in fact. What held the project up?

There are sometimes assessments to make…

[Stephen Paul]

In Montreal....

I apologize.

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

Go ahead.

[Stephen Paul]

At the Montreal site, we had ambitious goals to expand the site here. We acquired a piece of land that had been vacant for nearly 15 years, adjacent to the port of Montreal and zoned exactly how we are zoned today at our existing site in Griffintown, a Montreal suburb. We went ahead and did the environmental cleanup according to specs. We applied for the permit. We were then told that we were not permitted to conduct our activities on that land.

That ended up going to court, and it ended up going to the Superior Court of Quebec, both of which ruled in our favour. As we continued, then, with that ruling, to try to say, “Okay, can we get another permit to continue?”, we were still met with opposition. Some of that has to do with some reluctance from the neighbouring communities to have supply chain logistics parked in their neighbourhood. We've been kind of battling that as we're trying to improve the supply chain movements through this corridor and trying to drive effective economics to make it viable for our clients and our partners.

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

I understand that infrastructures are needed very soon. That's very important, but social acceptability and community consultation mustn't be forgotten because those are important factors too. The thing I wanted to raise was that you can't just remove everything. There may be some inefficiencies in terms of administration, but there are steps to be followed.

Do you think the neighbouring population should have its right to consultation taken away? Is that what you're saying?

[Stephen Paul]

No, not at all. I think it's important to always engage with the community. You want to be part of that community.

As an example, we proposed to work with the citizens of the area and the local municipality to create an ecofriendly logistics park. We could create a park. We could create sound barriers to protect from the sound. We tried to come up with ecofriendly solutions to meet our needs as well as those of the neighbourhood, so that we could coexist.

To your question, it's absolutely important to engage with the neighbouring citizens. We don't want to force anything on anybody at any given time.

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

Thank you for reassuring me; I just wanted to make sure I'd understood properly.

Of course, certain administrative procedures might be improved.

Ms. Sullivan, I liked your comment about the earlier report to the committee and the other reports to other committees. Personally, I've been a member for three years now and it seems to me that some reports have been lying dormant for a while. There must be dust on them by now.

You talked about workers, the code and the need for a specific plan. If you had to choose from two or three recommendations that ought to be implemented soon, what would they be?

[Kathleen Sullivan]

There's a long list, but number one, I think we have to focus on labour.

In that respect, I think in the short term, again, where we should be focusing our time is on foreign workers, making sure that we can bring those foreign workers in, that those foreign worker are.... You don't want to tell people where to work, but I think you want to encourage them to work in critical infrastructure sectors.

We also need to look longer-term. Now, the good news is that industry has taken ownership of developing a longer-term strategy for labour. It's really about the federal government supporting that. Within that, I think there is a role for ISED, for example, to take a look at how to better support the adoption of incremental technologies in the food and beverage manufacturing sector. We fall behind other manufacturing industries in Canada, behind other food-processing industries in other countries. We absolutely need to address that.

I think we need to take a look at how we better prepare ourselves for and address emergencies when they come up. We went through the pandemic. We learned a lot of lessons. However, even since the pandemic began, we have had multiple labour stoppages. We've had border shutdowns and very severe weather events. We keep having these once-in-a-lifetime weather events every year. We need to be much better prepared when they happen, but also how we recover from them.

Those are three of the big priorities that I would be looking at.

[The Chair, Liberal, Kody Blois]

Mr. Perron, there are only 15 seconds of your speaking time left.

Thank you very much.

Mr. MacGregor, you have the floor now for six minutes.

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

Thank you very much, Mr. Chair.

Thank you to all our witnesses for appearing today.

Ms. Sullivan, I have a feeling that with your comments about the power imbalance and the grocery code of conduct you might be a valuable witness for us in our next study as we examine the high price of food and the power that exists in the grocery retail market.

On your comments about labour, it truly is a strange time in our country right now, having come through a brutal two and half years that have really upended everything. We now have a country where there's a record amount of food bank use among Canadian families. We know that inflation is hitting many Canadian families hard. At the same time, that is juxtaposed with so many “help wanted” signs. It's quite a conundrum that we find ourselves in.

You mentioned that your industry is 20% short. I know that in my riding of Cowichan—Malahat—Langford, it seems that they are in desperate need of labour everywhere, whether they're a restaurant or a small manufacturer. It is truly everywhere. That is the strange time we find ourselves in. I don't remember a time in recent memory where there have been so many jobs available but so many people struggling.

I'm just wondering. You talked about developing an industry-led workforce strategic plan. I know that in many of your members' businesses and manufacturing places you do have unionized workers. The UFCW, of course, is the big one in Canada. I think that for the labour unions—particularly the UFCW—it's in their interest to grow their membership.

I'm just wondering what conversations with them have been like. Have they been able to offer any innovative ideas, some assistance from their expertise or anything about trying to get more homegrown talent interested in what opportunities exist?

[Kathleen Sullivan]

I haven't had a lot of direct conversations with the unions recently.

I will say, first of all, that we are a fairly highly unionized industry, as you pointed out. Those are relationships that are managed between the unions and the companies, and for all intents and purposes seem to flow well. It's something that we obviously don't discourage and certainly have welcomed in our sector.

When in the spring we were asking the federal government to implement changes to the temporary foreign worker program, we in fact had letters of support from unions, because of course when we bring foreign workers into a unionized plant, those foreign workers are automatically part of the union. They are afforded all of the same benefits and protections that any other worker would have—in fact, whether a plant is unionized or not. As we work on the strategic framework, I think we are going to have to be having more conversations.

A chair of mine once said that if we were doing everything right, we wouldn't still have problems. That doesn't mean we haven't all been working hard, but we clearly have to start thinking about how we do things differently. I think that involves having conversations with a lot of folks we may not always talk to, including indigenous Canadians and groups that are perhaps under-represented, and trying to figure out how to in fact encourage more people to come into this workforce. The challenge there, of course, is that we end up stealing from other employers, so you make the situation more difficult for them.

I think that ultimately what we want to do is understand how we look at Canadians who perhaps are not active or fully active in the workforce and how we encourage and help them to overcome barriers to enter the workforce. How do we look at where maybe the people who aren't working are? They may not be in the right places where we need them to be.

Really critical to this whole thing is that a lot of times you have workers but they don't have the right skills. We have a massive skills gap. The skilled trades are where I think we spend a lot of time talking about that shortage, but across the board, we often see a skills gap that we need to focus on as well.

All of this, I will say, is part of the project that we're working on.

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

You also mentioned that instead of a time of growth and opportunity, this is in fact a time of consolidation and contraction for many companies. In our earlier panel, some of our witnesses made reference to the growing amount of farm debt. One of our witnesses said that farm debt is growing, but sometimes there are different kinds of debt, and good debt can help to grow productivity.

What's the general status of many of your member companies in terms of their debt loads? What does that consolidation or contraction ultimately mean for Canada's food security if we don't correct the course on that?

[Kathleen Sullivan]

I don't have stats. I will say that what we are seeing, though, as you all know because you're talking to your constituents, is that supply chain costs are going up, whether fuel costs or just the costs of getting replacement goods and labour costs. At the same time, we have a very difficult time passing the full extent of those costs through to consumers, who are already facing food inflation, so you're getting this building up within the manufacturing sector. That is becoming a problem.

I would say the biggest impediment remains labour, though. I think when it comes to conversations about contraction or consolidation, it comes down to a point where a manufacturer will say, “I have a plant in one province. I can't get enough workers and I may just need to move all of that production to a plant in the neighbouring province and just consolidate it there.” Ultimately that means that we're going to have fewer food manufacturers and they will be concentrated in larger and larger companies.

Maybe somebody will say that having 7,000 or 8,000 food manufacturers is not sustainable if they're all small businesses. I would counter that by saying that a lot of the support for local food security comes from having those small manufacturers and that a lot of the creativity, product development and innovation that we see in our industry.... BC Food & Beverage—in your backyard—does this phenomenal awards showcase every year where they feature all of the innovative products that are coming out of B.C., which largely has small and mid-sized food manufacturers. You really should be incredibly proud of what comes out of the province.

I think it would be sad to see over-consolidation and concentration in the food-processing sector, but I think you're going to start to see that.

[The Chair, Liberal, Kody Blois]

Thank you very much, Ms. Sullivan and Mr. MacGregor.

Colleagues, that ends our time on the panels, but please don't go too far. We have a little bit of committee business work to do.

Before we do that, to all of our witnesses—Ms. Sullivan in the room, Mr. Paul on the video conference and Mr. Beusekom—thank you so much for your testimony and the opportunity to engage with us today. I'll release you because we have about 10 minutes of committee business.

Madam Clerk, could you just release the folks online, and Ms. Sullivan, I know, will see herself out.

Colleagues, we'll keep this relatively quick. I have four things I just need to discuss with you.

First of all, we know that when we come back after the break week, on November 14, we are going to do clause-by-clause on Bill C-234. I have consulted with the clerk. We're asking for any proposed amendments to be submitted to the clerk and to legislative counsel by November 10 at noon, please. Thank you.

I need unanimous consent to adopt that. I don't foresee there being any issue.

[Some hon. members]

Agreed.

[Philippe Méla, Legislative Clerk]

Mr. Chair, I am sorry to intrude.

Can I propose a different date, November 9, rather than November 10 at noon? The reason for that is that we have four other bills on November 10 with a deadline at noon, so it would spread the joy, so to speak, over two days rather than the same day.

[The Chair, Liberal, Kody Blois]

No problem. We'll help you out. It will be November 9. Perfect.

We had a little miscue there with our administration. Thank you.

Mr. MacGregor, go ahead.

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

Just quickly, who is the person we're connecting with to draft the amendments?

[The Chair, Liberal, Kody Blois]

There is a legislative counsel you can connect with.