Good afternoon, Mr. Chair, and members of the committee.
FHCP represents the companies that manufacture and distribute the vast majority of everyday essential products found in every household. Our members work closely with Canadian farmers to transform this country's agricultural riches into value-added finished goods that feed families here at home and around the world. As the single largest employer in rural Canada, we also serve as a critical link between rural and urban communities.
With inflation now at historic highs, we understand the concerns Canadians share regarding higher food prices. Canada's inflationary environment aligns with skyrocketing costs of food and goods globally. According to the Food and Agriculture Organization, global food prices jumped 5.5% between September 2021 and September 2022. Canada's peer countries face similar trends. Some factors driving global inflation include COVID-induced demand spikes, labour shortages, crop damage from extreme weather, transportation disruptions, and sharp increases in the price of energy and fertilizer due to the war in Ukraine.
Unlike past trends, many of these conditions and pressures have been occurring simultaneously or in a more pronounced manner, leading to broad-based increases in prices. Simply put, the costs of producing, selling and buying food have risen sharply across the board. When costs increase, prices generally do as well.
This point is reflected in an October 2022 survey of FHCP members, who reported that input costs have increased, on average, 23% this year. For example, wheat and oil prices have skyrocketed, and sugar has increased over 12% year over year. Plastic packaging costs rose 42% and paper packaging costs have increased by 36% since January 2020. The price for glass rose 12% year over year. Freight transportation costs are up 32%. Labour costs rose by almost 16%. In addition, our members are dealing with interest rate increases, the increased cost of debt servicing, and foreign exchange challenges, as many of the ingredients used in manufacturing are sourced from outside Canada. Our members expect these costs will continue increasing well into 2023.
Our industry also faces labour, ingredient and packaging shortages. Eighty per cent of our members report labour shortages in their manufacturing plants. Severe labour shortages also continue to impact the trucking industry, which manufacturers rely on to transport over 70% of their products. Packaging shortages include pallets and pressure-sensitive labels. These global shortages, with limited to no domestic supply, impact our industry's ability to produce and deliver essential everyday products to Canadians.
In response, some FHCP members are temporarily reducing variety and sizes and concentrating on making the most necessary and in-demand products. Most manufacturers are passing on significantly few of their costs to retailers.
While industry is working to mitigate the impacts on consumers, there are steps the government can take to help.
First, we must build supply-chain resilience and bolster our economic capacity. The government must take immediate action to implement the national supply chain task force's recommendations that impact our industry, including investing in critical transportation infrastructure and supporting the digitization of supply chains.
Second, the fall economic statement outlined important steps towards providing a more levelled investment playing field between Canada and the U.S. We are pleased with commitments like the Canada growth fund, tax credits for clean technologies and investments in advanced manufacturing. These are important steps to help Canada remain competitive in North America, while keeping and attracting investments here.
Third, labour shortages continue to be a challenge for our industry. We are encouraged by the government's plan to increase immigration levels to 500,000 people by 2025 and provide further financial measures to process new immigrants and reduce backlogs.
Lastly, Canada needs a mandatory and enforceable grocery code of conduct with a broad scope that captures all essential everyday products on grocery shelves. Since August 2021, discussions on the development of a code have been under way in an industry steering committee, which I am pleased to be co-chairing. The code will ensure the relationship between suppliers and Canada's grocers is transparent, stable and fair.
Thank you, Mr. Chair.