Gay Lea Foods is a proud Canadian co-operative with members on more than 1,400 farms across Ontario and Manitoba. Our membership in Ontario represents roughly 40% of the bovine milk production in the province. We ourselves process approximately 24% of Ontario's milk in 11 facilities, making everything from milk proteins and ingredients to cottage cheese, butter, whipped cream, soft and hard cheese, sour cream and fluid milk. We also broker 45% of Ontario's goat milk, have a cheese facility in Alberta and are partners in a joint venture in Manitoba.
Recognizing the external threats from global trade agreements as well as the rapidly changing marketplace, Gay Lea Foods has been steadily strengthening our co-operative through investments in our existing operations. These have enabled us to increase sales from $560 million in 2013 to just over $872 million in 2019 as a wholly owned and operated Canadian business.
Gay Lea Foods has been committed not only to our members, our employees and the communities we touch, but to the Canadian dairy industry as well. The basis of our co-operative's investment in a drying facility in 2003 was to support the management of solids non-fat, SNF, as a responsible dairy sector. That is also why Gay Lea Foods was an active partner in the development of classes 6 and 7 in the national ingredients strategy as an industry-led solution to address the growing structural surplus of SNF as a consequence of satisfying the growing domestic demand for butterfat.
It needs to be emphasized that this industry-led, market-driven policy was a significant step for Canadian dairy and ignited investment throughout the sector, including more than $1 billion of publicly reported projects by Canadian dairy processors that included new facilities, modernization of existing capacity and capabilities, as well as expansion.
To that end, in 2016 Gay Lea Foods embarked on a plan to create a new dairy ingredients hub in Ontario, with a $72-million investment in the construction of a nutraceutical-grade dairy ingredients facility in Teeswater. This is the only nutraceutical-grade dairy ingredients facility in Canada.
We also brokered a non-conventional joint venture in Winnipeg, Manitoba, to construct a new MPC, milk protein concentrates, and butter facility with Vitalus Nutrition Inc. The latter was in support of chronic underproduction in western Canada, providing much-needed processing capacity to support dairy farmers in the western part of the country.
Both of these investments were committed, with shovels in the ground, prior to the NAFTA negotiations, and they are both now in operation.
I must add that the $72-million investment was all made from aluminum and steel that was specially fabricated in the United States.
Over the last four years, Gay Lea Foods has invested an additional $180 million in the business, with plans for a further investment of $100 million by 2023. These financial decisions by a dairy co-operative owned by dairy farmers were not made without risk, but they were made with the understanding that both industry and government shared a commitment to the growth of a thriving, innovative and uniquely Canadian dairy sector.
The impact of CUSMA on Canadian dairy needs to be placed in the context of the multiple pressures, opportunities and changes the dairy sector has encountered over the last six years.
The global marketplace and consumer demands on food are shifting. Canadian dairy has lost domestic market share under CETA, CPTPP and now CUSMA. We also have the WTO deadline for the elimination of export subsidies coming into effect later this year.
That was part of the rationale for creating classes 6 and 7: to address our issues of structural surplus while also dealing with the increasing demand for butterfat. This included our looking at how we would utilize and sell skim milk powder, which is globally recognized as some of the best skim milk powder you can find.
ln 2019 we have started to see the real impact of imported cheese in the Canadian marketplace. While the volumes are incremental, the effect on pricing is necessitating changes for Canadian cheese in order to remain competitive. As more imports come into Canada, the industry will need to adjust further to maintain market share.
CUSMA will force the industry to make changes to our milk class pricing and has designated a formula for the pricing of three specific dairy goods: skim milk powder, MPC and infant formula. It will also place thresholds on global exports of these three specific dairy goods, based on our dairy year. This will have a direct impact on the industry's ability to balance the demand for butterfat while providing value to the SNF associated with that milk volume.
As the committee has heard from previous testimony, the timing of the coming into force could add additional challenges to our sector, as these provisions are based on a dairy year starting on August 1.
The agreement also includes provisions on the disclosure of certain information and on obligations to notify and consult with the other party on changes to milk class. It should be noted these provisions apply to both parties to the annex, both Canada and the United States. It is hoped that government will work with industry and ensure that both parties to that annex fulfill their obligations in relation to those provisions.
As a sector, we need to have a good dialogue on the future we want for the Canadian dairy industry. We need to solidify a common vision and chart the plan for the next three, five and 10 years. We will need to know that the government has our back as we move through the unprecedented, most difficult and most significant next three years with these trade agreements, the cumulative effect of which will be a significant impact on all of our businesses and decisions going forward.
We need to work on restoring the stability and predictability that have been eroded in our sector in order to effectively manage milk supply to meet market demands for various milk components. Government will need to play a role as we work on how to position this sector to remain viable with growth, sustainability and innovation at the core. The dairy industry still has so much potential, and we all need to get behind it.
The government needs to move ahead with the implementation of a dairy processing investment program as compensation for both CPTPP and CUSMA. The government has repeatedly committed that this compensation will be full and fair. I would only add that it also needs to be retroactive to the signing of the trans-Pacific agreement in March 2018. The reason for this is simple. We have not waited for the impact of these trade agreements to be felt in our marketplace as we have developed and put investment into mitigation strategies. That was with the understanding that government would be there to support our investments in our operations that are negatively impacted by the trade agreements.
Global Affairs Canada should allocate the TRQs for the market access conceded under CUSMA to dairy processors. Simply put, we are the best placed to identify what is required to fill domestic needs. I will note that contrary to CETA, the market access conceded under CPTPP and CUSMA is market access of opportunity. Canada's not obliged to 100% fill it or even to fill it. It should be brought in only if there are domestic needs to be fulfilled.
Related to the administration of TRQs by Global Affairs Canada, government needs to ensure that the department has the resources to administer the new obligations under these trade agreements to ensure they are timely and business-friendly. They currently administer 38 TRQs for supply-managed commodities. We will see that number increase to 54 with CUSMA. They need to provide for both the resources and the training for the staff, as we look forward to how this administration will be done in a timely and business-oriented way.
While there are many challenges ahead of us, Gay Lea Foods remains committed to working with industry partners and all orders of government on a plan for the sector and our future as a dairy co-operative in what we hope will be a thriving and growing dairy sector in Canada.