Agriculture Committee on Feb. 10th, 2022

[Fawn Jackson, Director, Policy and International Affairs, Canadian Cattlemen's Association]

Thanks, Bob.

The pandemic has demonstrated the need for effective and efficient use of vaccines and preparation ahead of potential health events. This includes threats of animal disease outbreaks. A serious animal health incident would have large-scale impacts on our sector.

We are, simply put, not ready for the real threat of an FMD outbreak and must immediately invest in a Canadian FMD vaccine bank as our neighbours to the south have. It could have a $50-billion to $60-billion financial impact on the Canadian economy. This is a key priority for Canadian beef producers and is one of our top federal budget asks.

The recent severe weather events and COVID have also shown us the importance of the business risk management programs to the economic viability of our producers. We have used AgriRecovery to address floods, fires, processing capacity and drought in the last number of years. Continued and increased investment in the BRM programs is needed as it helps smooth out bumps in the road for our producers in enabling them to better plan for the future.

We thank the teams who have worked on designing and delivering these programs, and look forward to making future improvements so that they are even better suited for future challenges. While today's time doesn't allow me to get into all of the nuances and details, we would be pleased to meet with members of the committee to look more comprehensively at solutions for the future.

Thank you. We look forward to your questions.

[The Chair, Liberal, Kody Blois]

Thank you, Ms. Jackson.

I will move now to Ms. Sullivan for five minutes.

[Kathleen Sullivan, Chief Executive Officer, Food and Beverage Canada]

Good afternoon.

My name is Kathleen Sullivan and I am the CEO of Food and Beverage Canada, representing Canada’s domestic food and beverage manufacturing sector.

I am also co-chair of Agriculture and Agri-Food Canada’s Food Sector Network and, with the Canadian Federation of Agriculture and the Canadian Agriculture Human Resource Council, am co-chairing a project to develop a workforce strategic plan for Canada’s agriculture and food and beverage manufacturing sectors.

I appreciate the opportunity to meet with you.

Canada’s food system is the foundation of this country’s national food sovereignty. Our food system contributes to Canada’s national, provincial, territorial and regional economies, it supports our international trade goals and it underpins local food production and food security, but the food system is a complex supply chain connecting almost 200,000 farms, 8,000 food and beverage manufacturers, 15,000 retail stores and 100,000 restaurants, all working together and with input suppliers and the transportation sector to ensure Canadians have the food they need.

Over the past two years, Canada’s food supply chain has been under inordinate and destabilizing pressure. Today, more than 90% of Canadian food companies are experiencing supply chain issues.

The reasons are complex. They include disruptions in global supply chains due to the pandemic, price inflation, natural disasters and transportation infrastructure disruptions.

For food and beverage manufacturing, the sector I represent, the number one overriding issue is labour. Food and beverage is the largest manufacturing employer in the country, but today, on average, Canadian food and beverage manufacturers are short 25% of their workforce. That is an absolutely staggering figure. The labour shortage has resulted, we estimate, in a more than 20% reduction in output. That means 20% less Canadian food available to feed Canadians or to export.

The impacts of the labour crisis are real. They are felt across all products, company sizes and regions. Here are just a few examples.

In Pointe-Claire, Quebec, LUDA Foods is a mid-sized processor that makes soups, sauces and custom blends for the food service and industrial markets. At full capacity, it has 80 employees but today has open postings for 20% of its workforce. The company’s fill rate for orders is now between 70% to 80% only, and the company is losing sales.

In Winnipeg, Medallion Milk has experienced labour shortages throughout the pandemic, specifically in the production area, averaging a 20% vacancy rate for production jobs. Really importantly, we have to remember the stress that puts on the remaining employees.

Olymel, one of Canada’s largest meat processors, with plants in Quebec, Alberta, Ontario and New Brunswick, reported in the media last fall that it needs 3,000 workers. Olymel announced it will stop slaughtering activities at its plant in Princeville, Quebec, starting next March, due to its labour shortfall.

In Brampton, Ontario, Maple Lodge Farms, Canada’s largest independent chicken processor, is operating with a 25% labour shortage. The facility has made substantial changes in product offerings. It has added overtime, and that places even more demands on the employees, who are already experiencing burnout due to the pandemic.

These are just some of the stories we have heard and continue to hear from companies across the country. It is our full expectation that these labour shortages will exist even after the pandemic comes to an end and likely will become worse. As an example, and like many other companies, at Maple Lodge Farms a further quarter of that company’s workforce will reach the age of 65 in the next five years. That means a level of turnover that has never been seen in the company’s history.

We recognize and we very much welcome recent commitments from the federal and provincial governments to help address labour issues, including the $85 million in additional resources recently announced to assist in processing times at IRCC. The problem, though, is that these these initiatives will take time to roll out, and they will not provide the relief that is needed in the immediate term.

We were also very pleased to see that Minister Bibeau's and Minister Qualtrough's mandate letters acknowledged the need to focus on labour and to prioritize the development of a labour strategy to address the chronic shortages in the agriculture and food-processing sectors.

Industry has in fact already stepped forward to play a leadership role in developing that strategy.

Last fall, the Canadian Agricultural Human Resource Council, the Canadian Federation of Agriculture and my organization launched a project to develop a workforce strategic plan for our sectors to address our chronic labour problems. This project, started last fall, is already under way—

[The Chair, Liberal, Kody Blois]

Ms. Sullivan, I apologize. I gave you about 25 extra seconds. I'm sure members want to ask you questions and we'll be able to elaborate on those points.

[Kathleen Sullivan]

No worries.

[The Chair, Liberal, Kody Blois]

We're going to Mr. Steinley first. You have six minutes.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you, Mr. Chair; and thank you, everyone, for being here to present to us today.

My questions will be for either Fawn or Bob.

In the first hour, we learned that the departments of Agriculture and Transportation have been talking about interprovincial vaccine mandates for truckers since December. I'd like to know if you guys have been part of that conversation. Trucking is a big part of your membership and industry. If you've been part of that conversation, have you talked about what effects an interprovincial vaccine mandate would have on your association for truckers?

Thanks.

[Bob Lowe]

Thanks for the question. We're in no way saying that people should or should not be vaccinated. What we are saying is that essential services are what has been keeping things alive, and the trucking industry was an essential service. It seems just a little funny to us that all of a sudden they would be required to be vaccinated, when we aren't out of the pandemic yet.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Have you guys had any conversations with Ag or Transport about that as a stakeholder, because some of them would be very much affected by that?

[Fawn Jackson]

We have communicated our concern about further interruptions in transport at this time.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

That's perfect.

Thank you very much. I'll move over to my partner.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

I'll begin with Kathleen, of Food and Beverage Canada. I believe you were about to launch into a description of the emergency worker program. Please go ahead before I launch into my questions, because that was my first one.

[Kathleen Sullivan]

Thank you very much.

The food and beverage manufacturing sector has come forward to request that the federal government launch an emergency foreign worker program. This is a program that would build on the existing temporary foreign worker program. It would not relax any of the obligations of employers to workers, any worker protection, but would provide more flexibility for companies to, in the immediate term, bring workers into Canada to fill these jobs to provide relief for our existing workforce that is burning out after two years in the pandemic and help us really stabilize the workforce while we identify longer-term solutions to our chronic labour problems.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

We heard from officials this morning and certainly what I'm hearing from the 200,000 farmers and 8,000 processors in food manufacturing is that labour shortage is the number one issue, as you identified in your remarks.

I appreciate the work that industry is doing in bringing forward solutions and participating in some of these longer-term round tables and meetings.

We heard from officials that the minister recently participated in a supply chain summit, but from the acute shortage now, the industry was welcomed to have more meetings. Do you feel more meetings are required? Do you feel that you've been heard in launching the emergency worker benefit?

I have the five-point plan here in front of me. I know we've spoken about this before. Invitation to more meetings doesn't address it. I think the 20% cap is welcomed in Quebec, but my understanding is 30%, as we identified in the processing capacity report, is required across Canada.

Would you have any comment?

[Kathleen Sullivan]

Sure. As you well know, we've met with about 55 officials so far to discuss the labour shortage and the need for an emergency response. We have a meeting coming up next week with senior officials at the departments of Agriculture and Agri-Food, ESDC and IRCC. It would very much be our hope that at that meeting they will provide us with a response to our proposal.

In short, every day that goes by without some sort of response is a day wasted and a day where we just put more pressure on our current workers.

I know we're not the only sector facing this labour crisis. We're also not the only country that's facing this. However, if we want to have a chance of reviving our economy as we emerge from this pandemic, it is clear that the fundamentals of our workforce have somehow shifted under our feet through this pandemic.

We need to really stop the blood loss that we're experiencing right now, stabilize the workforce, and collectively we need to come up with some solutions for the food sector, and I would suggest, for the whole economy going forward, because this is going to be the biggest issue that many countries will be dealing with.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

The CPMA, one of your members, has also called for a supply chain commissioner, a whole-of-government approach. Obviously, this is more in the longer term.

Can you comment on that, particularly in identifying, beyond labour, what the other critical vulnerabilities are to our supply chain?

[Kathleen Sullivan]

Labour is a huge one. Level of automation is a huge one as is our transportation infrastructure and disruptions.

We talk about the current blockades, but we have lived through.... In 2019 there was a rail strike; in 2020 there were pipeline and rail protests; and 2021 was B.C. and the closure of highways and the Port of Vancouver. Every year we have some other incident that impacts the transportation infrastructure in this country. Clearly we need to take a step back and figure out how we create surge capacity here, because it just layers more and more on us.

Labour, the level of automation adoption—automation that we have in our sector—and also transportation I would say are some of our biggest priorities.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

I'll conclude with one final question. What have you heard back on the grocery code of conduct? That's something we also spent time on in a previous study. It's something that's critical that we have been strongly advocating for. What has the industry heard back?

[The Chair, Liberal, Kody Blois]

You have 15 seconds.

[Kathleen Sullivan]

I sit on the design committee for the code of conduct. I can assure you that the members of that committee meet for several hours every week. A tremendous amount of work and effort are being brought to bear by all of the segments of the supply chain to ensure that we have a code of conduct that is made here in Canada, that represents the interests and protects and strengthens the supply chain.

[The Chair, Liberal, Kody Blois]

Thank you, Ms. Sullivan.

We're going to now go to Mr. Turnbull for six minutes.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Mr. Chair.

I want to start by saying thanks to all the panellists for joining us today. I really appreciate your organizations, the incredible work you do and all the of the stakeholders you represent who are essential to our food system.

Perhaps I could say to Mr. Lowe and Ms. Jackson to not get offended if I focus my questions on fruit and vegetables with Mr. Buy today. I do eat beef and enjoy it very much. Canadian beef is great, but I'm going to focus some questions on the briefing that Mr. Buy gave us.

I appreciate the comment that was made in the briefing note that 80% of Canada's fruit and vegetables are imported, which I found quite revealing and a bit shocking.

I think the opportunity, especially given comments made earlier about the food guide, certainly shows that a more sustainable diet includes eating more fruits and vegetables than the average Canadian does, generally speaking. I think it certainly goes without saying that we can have much more production of fruits and vegetables in Canada.

I note, Mr. Buy, that your briefing note expresses the opportunities for innovation within that, including vertical farming.

Have you done any research or innovation around import substitution and identified very specific categories of fruit and vegetables that we can grow here in Canada?

[Serge Buy]

We haven't specifically done such research, but certainly some of our members have looked at this. We're looking at leaf vegetables, as an example, which would probably be more appropriate than others, as would spices. As I said, we're not going to produce pineapples in Nunavut by vertical farming, but we can certainly look at lettuce and other things.

A great resource for this is Steven Webb from the Global Institute for Food Security based in Saskatoon. There is lots of information there.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you for that.

Mr. Buy, further to that, I noticed you referred to an innovation challenge that was put out by Agriculture and Agri-Food Canada within new technologies in Canadian meat-processing industries, and I think your briefing note also kind of implies that AAFC could be doing more innovation challenges.

Would you agree with that? What areas would you see as key opportunities for innovation challenges?

[Serge Buy]

Absolutely. I think they certainly could do much more than what is being done presently.

They're responding to crises. I think the idea is to not just respond to crises, but also to be proactive. The vertical farming issue, as an example, would be great. We're seeing the private sector moving on that. For example, the Weston foundation is putting $33 million on that. No one else is doing that, so I hope....

I shouldn't say no one else, but the government is not taking the lead. I hope the government will take the lead at some point to move on some of those projects.