Thank you very much, and good afternoon.
My name is Kathleen Sullivan and I am CEO of Food and Beverage Canada, representing Canada's domestic food and beverage manufacturing sector.
I thank you for the invitation to speak today.
Food and beverage is one of Canada's largest manufacturing sectors. Found in every province, the industry includes almost 8,000 manufacturers, the vast majority of which are small businesses. The sector employs, at capacity, almost 300,000 workers and is central to Canada's food supply, taking raw agricultural products from across the country and turning them into the foods you find in your grocery store, from bread to cold cuts, yogourt to canned vegetables, bacon to butter.
Canada's food system is the foundation of this country's national food sovereignty. Our food system contributes to Canada's national, provincial and territorial economies; it supports our international trade goals; and it underpins local food production and food security.
The system is a complex supply chain. It connects almost 200,000 farms, 8,000 food and beverage manufacturers, 15,000 retail stores and 100,000 restaurants, all working together and with input suppliers and the transportation sector to ensure that Canadians like us have the food we need.
For the past two years Canada's food supply chain has been under inordinate and destabilizing pressure. Today, more than 90% of Canadian food companies are experiencing supply chain issues. A recent survey of my members listed supply chain disruptions among the top three issues impacting the sector, along with labour and competitiveness.
The reasons for supply chain disruptions are complex and include interruptions in global supply chains due to the pandemic, price inflation, natural disasters, labour shortages and transportation infrastructure disruptions.
To give you just a few examples, first, last November, flooding in B.C. had a significant impact on the food supply chain both within that province and also outside of it. The province, which is responsible for 9% of Canada's food processing, experienced the closure of highways, rail service and roads as a result of flooding. Transportation backups, driver shortages, along with the infrastructure barriers impacted the ability to move product from distribution centres and processing facilities to retail stores for consumers. Agriculture producers and food processors experienced significant strain due to the inability to secure animal feed and concern for animal welfare. As well, freight costs skyrocketed and in fact remain high compared to pre-flood levels.
In March a potential strike at Canada Pacific Railway, which of course turned into a very brief strike, raised significant concerns about the ways in which Canada's food system depends on a reliable transportation infrastructure to ensure that Canadians have access to the food they need.
Most recently and tragically, the war in Ukraine has led to increases in the price of wheat and Canadian flour, with Russia and Ukraine combined representing almost 30% of the world's wheat exports.
The most pressing concern for supply chain stability right now is labour. Food and beverage is the largest manufacturing employer in the country, but today Canadian food and beverage manufacturers are short 20% to 25% of their workforce, which is absolutely staggering. The labour shortage has resulted in a 20% reduction in domestic food output and it's our expectation that these shortages will exist even after the pandemic, and in fact, become worse. As an example, we anticipate one quarter of the industry's workforce will reach the age of 65 in the next five years.
Recent changes to the temporary foreign worker program, which Food and Beverage Canada was advocating extensively for, will absolutely provide some necessary and welcome short-term relief for Canadian companies as industry continues to work with government on longer-term measures to address labour issues.
Work on a national workforce strategic plan for the agri-food sector, in partnership with my organization, the Canadian Federation of Agriculture and the Canadian Agricultural Human Resource Council will also help to identify medium- and long-term solutions to address our workforce challenges and I think could be a blueprint for other sectors as well.
We would welcome the opportunity to continue updating you on the progress of that work.
Finally, I do want to point out, as I noted earlier, that the vast majority of companies in Canada's food and beverage manufacturing sector are small businesses. Work on a code of conduct with Canada's grocery retail sector will, I think, also be very instrumental in helping to improve supply chain issues.
In closing, I would like to acknowledge the dedication of everyone in Canada's food system over the past two years as they worked to keep the food supply chain operating in Canada, which is not a small feat. Working together, they have continued to ensure that Canadians have access to Canadian food.
I look forward to your questions. Thank you very much.