My name is Dominique Benoit, from Agropur. I will continue in French.
Depending on their product and market mix, the majority of dairy processors have seen their revenue decline anywhere between 0% and 50% due to the reduction in the food service market. Furthermore, dairy processors have seen an increase in expenses due to costs related to COVID-19, such as a rise in absenteeism, higher PPE costs, and so on.
The combination of decline in sales and increase in cost means that many dairy processors are under significant financial stress as a result of a much lower or even negative bottom line.
We recognize and appreciate the emergency support programs announced by the federal government to help businesses mitigate the impact of the COVID-19 pandemic. However, these programs often fall short for most food processing organizations. As such, we recommend expanding current support programs.
First, selected elements of the business risk management programs should be extended by Agriculture and Agri-Food Canada to the critical food processing sector to address margin losses, notably the impact on earnings before interest, taxes, depreciation and amortization, or EBITDA.
Second, as currently structured, the Canada emergency wage subsidy will leave some food manufacturers without support because revenue declines will not meet the 30% threshold in April and May. We propose that the government provide a sliding scale of support for revenue reduction between 10% and 30%.