Food and Consumer Products of Canada would like to thank the committee for the opportunity to provide input into federal budget 2018.
FCPC is Canada's largest industry association representing the companies that manufacture and distribute the majority of food, beverage, and consumer goods found on store shelves, restaurants, and in people’s homes. Our membership is truly national, providing value-added jobs to urban and rural Canadians in more than 170 federal ridings in every region of the country.
Food processing is the largest employer in the manufacturing sector in Canada, providing 300,000 Canadians with high-quality jobs in over 6,000 manufacturing facilities. Canada’s food manufacturers employ more than the automotive and aerospace sectors combined.
According to the chair of the advisory council on economic growth, Mr. Dominic Barton, food is going to be one of the biggest businesses in the world. The council's report discusses the opportunity to grow and process more food in Canada. It points out that we only add value to 50% of what farmers grow in Canada and that this represents an enormous untapped opportunity.
We were very pleased that budget 2017 singled out agrifood as one of three key strategic industries in Canada with great potential for growth and job creation. Importantly, it identified export targets for the agrifood industry, amounting to at least $75 billion annually by 2025. In order to meet these export targets, we need to address barriers to growth currently facing food manufacturers in Canada.
We know that investment in R and D and capital in food processing facilities in Canada has not kept pace with our international competitors. A 2014 KPMG report showed that Canadian food manufacturers are lagging behind their counterparts in their adoption of advanced technology like automation and robotics. In order to be more productive, we require modern facilities with technology that allows us to make products in a smarter, greener, and more efficient manner.
Our first recommendation for budget 2018 is to provide additional support to our industry to encourage investment in advanced technologies and modern manufacturing facilities in Canada. Our industry is facing other significant barriers to growth coming from beyond our border. The Trump administration's focus on repatriating U.S. manufacturing and the ongoing NAFTA negotiations are putting additional pressure on Canadian manufacturers.
Our second recommendation, therefore, is to modernize NAFTA by building on its beneficial aspects and, at the very least, do no harm. Despite the uncertainties south of the border and declining investments, the most pressing challenges facing food manufacturers today are actually regulatory and entirely within the Canadian government's control. The cost of all of the federal government's food labelling changes alone is $1.8 billion. This is $1.8 billion that food manufacturers will not spend on creating jobs in Canada, not spend on operating plants, and not spend on innovating products.
The government's healthy eating strategy will change how we make our products, how we package our products, and how we market them. It's hard to imagine the government asking any other manufacturing sector in Canada to make these types of drastic changes all at once. To be clear, we support Health Canada's public health objectives and are committed to transparency and education for consumers. We need to ensure, however, that food labels do not unnecessarily confuse consumers and undermine public trust with no proven public health benefits.
Our 130-plus member companies are extremely concerned with Health Canada's alarming proposal to place harsh warning labels on the front of food packages. We are not alone. National farm groups are also opposed to the placement of stop signs on iconic Canadian products like cheese and maple syrup.
There are other ways to improve public health, like education, that take a more informative approach to how people eat, and our own research shows that consumers actually prefer an informative approach over an alarmist judgmental approach. In contrast, there is no evidence to suggest that Health Canada's proposals would improve public health outcomes.
Health Canada cancelled a successful consumer education program, on which we partnered with it, and in its place it proposed stop signs on food. We have grave concerns with Health Canada's process and approach. Following a meeting on September 18, we were alarmed that the department communicated broadly, in writing, that we had arrived at an agreement on criteria for front-of-pack labelling, which we had not. This was a clear misrepresentation of the record.
Health Canada's criteria is so narrow, in fact, that it would exclude exploring labelling options adopted by our major NAFTA and European trading partners. Given that the Canada-EU trade deal includes the first-ever stand-alone regulatory co-operation chapter in Canadian history, and that the government is pushing for inclusion of a similar chapter in NAFTA, it only makes sense for Canada to at least explore the merits and alignment opportunities with the food labels adopted in these countries.
Our third and final recommendation is for Health Canada to take the time to determine the best labelling approach for Canada through consumer research, meaningful consultation, and an openness to consider the labelling options adopted by our major trading partners. Also, to signal that Canada is a predictable economy in which to invest, Health Canada must be open to all stakeholders and stop excluding industry from critical conversations.
In conclusion, we support initiatives to grow and process more of our own food in Canada sustainably and competitively for the benefit of Canadians who rely on good jobs in the food manufacturing sector.
Thank you.