Thank you and good afternoon. My name is Kathleen Sullivan, and I'm CEO of Food and Beverage Canada, an association representing Canada's food and beverage manufacturers.
Food and beverage is the largest manufacturing sector in this country. It includes 7,000 companies. They employ 290,000 Canadians and generate close to $120 billion in annual revenue.
Unfortunately, it is also a sector that is often overlooked. Most of our food does not go straight from the farm to the grocery store. Instead, agriculture products are shipped to Canadian food plants, plants that turn wheat into flour and then bread, turn cow's milk into yogourt and cheese, and turn potatoes into perogies.
Food manufacturing is a critical component of Canada's domestic food supply. Our 7,000 companies buy over half of Canada's agriculture output, add value to crops and livestock production and, most importantly, ensure that Canada maintains its food sovereignty.
We should all be very concerned that with COVID-19, Canada's food system has experienced a series of shocks: the collapse of food service, the disruption of supply chains, the impact of border closures, the additional costs to protect our workers and, most recently, the fees imposed by some of Canada's largest grocery retailers. These shocks have destabilized not just my sector but the entire food system.
In 2018, Dominic Barton and the agri-food economic strategy table tapped agri-food to drive economic growth in this country. To achieve this, we will need to address some fundamental issues. Today I'll focus on three—resolving agri-food's labour problems, rebalancing relationships across the supply chain, and ensuring that our front-line food workers are recognized as a priority and continue to be protected throughout COVID-19.
With respect to labour, even before COVID-19, labour was the biggest issue and the most limiting factor facing our entire agri-food sector. We simply do not have enough people for the jobs we have, and we do not have the right people with the right skills. On any given day, this, Canada's largest manufacturing sector, is short 10% of its workforce. By 2025, we expect to be short 65,000 workers.
This is a missed opportunity for our economy. There is demand for Canadian products here at home and abroad, but until we address the industry's labour problems, our ability to invest and grow will remain constrained.
We are therefore encouraging the federal government to work with industry to develop a labour action plan for Canada's food and beverage manufacturing sector, and I would say for the entire agri-food sector.
The second issue is to rebalance the supply chain. Canada's grocery sector is over-concentrated. We have just five retail companies controlling 80% of Canada's grocery market. This circumstance has allowed retailers to regularly impose arbitrary transaction costs, fees, and penalties on their suppliers. Most recently, in the past few months and despite the pandemic, major retailers have announced even more new fees. This simply can't continue. Other countries have faced this challenge and have addressed it by implementing a grocery code of conduct. We, along with 33 other industry associations and producer groups, are encouraging Canada to do the same.
We are pleased that at their meeting last week, the federal, provincial and territorial agriculture ministers committed to striking a working group to look at this issue. We encourage the federal government to continue to prioritize this and to commit to having a code in place by the end of 2021.
Finally, I would like to talk about our front-line food workers. Even in a pandemic, Canadians need to eat. It is thanks to the efforts of our front-line food workers that Canada's food plants have continued to operate through COVID-19. This has been no easy feat. As companies, we have invested an estimated $800 million to keep our workers safe. We have also spent countless hours reinforcing with them the importance of their contribution. It is critical that governments also reinforce with our front-line food workers the essential nature of their work. As we move forward, in particular we are asking that governments consider the importance of front-line food workers in any rapid testing and vaccination programs.
Despite the measures we have put in place to mitigate risk, food plants remain congregate settings, and it is on all of us to do what we can to ensure our food workers remain healthy while they produce the food that allows us to eat.
I thank you for the opportunity to present to you today, and I look forward to your questions.