Thank you.
Good morning. I'm Kathleen Sullivan, CEO of Food and Beverage Canada. I thank you for the opportunity to be here today. I'll try to keep my remarks brief; I know you'll want to get on to questioning all the witnesses.
Food and Beverage Canada, or FBC, is a national industry association that represents food and beverage manufacturers across Canada. Our members don't just sell food and beverage products in Canada; we invest in Canada. We create jobs in Canada. We contribute to Canada's economic growth and competitiveness every single day.
FBC provided a written brief to this committee as part of your pre-budget consultations. We also just recently provided extensive comments to Treasury Board as part of the federal government's budget 2018 regulatory modernization initiative. It my remarks today, I really want to focus on just a few of the comments we made, and one in particular.
To begin, I would like to note that our industry was very pleased when the federal government identified agri-food as one of its five priority sectors in both budget 2017 and budget 2018. It is important, though, to remember that agri-food is a very broad term and embraces several different sectors, including primary agriculture, food and beverage manufacturing, and aquaculture. Each of these sectors is distinct. Each of these sectors has its own unique challenges. All of these sectors, if we want them to achieve their full potential, are going to require supports that recognize their respective realities.
The industry I represent has very strong links to primary agriculture here in Canada, obviously, but we are first and foremost a manufacturing sector. We are, in fact—which is surprising to many people—the largest manufacturing sector in Canada in terms of contribution to GDP and also in terms of employment. We are also the second-largest manufacturing sector in Canada in terms of the value of our production.
To give you an example, in 2016 our shipments were worth more than $112 billion. We employed a quarter of a million people. That is more than the auto and aerospace industries combined.
While Canadian food and beverage manufacturing output is growing, we have great concerns that our sector is falling short of its potential. Of great concern to us is that Canadian food and beverage manufacturing companies are actually seeing a decline in investment in research and development, and a decline in investment in equipment. In addition, Canada has fallen from third place to fifth place, compared to our global competitors, in terms of the value of our agri-food exports.
We think it is possible for the Canadian food and beverage manufacturing industry to reach its potential. We share the government's optimism about this sector. To achieve our potential, though, we are going to have to work together to tackle some of the issues that are limiting or that, conversely, could in fact support our competitiveness.
We are particularly interested in the work of the agri-food economic strategy table. That's the main point I want to make here. The strategy table has been working for some time to develop recommendations to support competitiveness and economic growth in the broader agri-food sector. Their report, released earlier this week, focuses on five key policy areas: regulation, market development, innovation, labour and transportation. We cannot let this report languish. The report calls on the food and beverage manufacturing sector to increase its production, its output, by 30% over the next seven years. That will not happen simply on its own.
We are therefore encouraging the government to immediately establish a joint industry-government advisory committee to review the report of the agri-food economic strategy table, particularly, in our case, from the perspective of food and beverage manufacturers. We think the advisory committee should be given a mandate to establish objectives and identify key policies, essentially to create a strategy that will drive this industry toward the competitiveness goals in the next seven years. We think that this advisory committee should be formed now so it can come up with recommendations that can be inserted into budget 2019.
I have just a few other brief comments. In the submission we have made to you and also to Treasury Board Secretariat, we make the point that we think we need to adopt a whole-of-government approach to competitiveness. That's a term we throw around a lot. I think in some cases it may have lost its meaning. Government is complex. We really need to put in place mechanisms that bridge different departments if we're going to solve issues.
Labour, for example, is a critical issue that my colleague has already raised. We fall under the jurisdiction of Agriculture Canada, but labour issues fall under the labour department. They fall under the immigration department. They fall under Service Canada, which delivers many of these programs. Unless we really start to put mechanisms in place to bridge across these different departments, we will never resolve the barriers that are preventing us from achieving our potential, and we will never fulfill the objectives that the economic strategy table laid forward this week.
With that, I'll conclude my remarks. I look forward to any questions you might have.
Thank you.