In its comments, the Baking Association of Canada (BAC) has told the federal government that Canada’s National Food Policy discussions to-date have put a lot of focus on nutrition and food security but are not addressing specific economic goals or plans to ensure Canada has the policies, programs and workforce to continue to make good quality and healthy foods for Canadians and the world’s population. The Canadian food and beverage processing sector is the second largest manufacturing sector in Canada in terms of the value of production, with sales worth $112.2 billion in 2016. It is also Canada’s largest manufacturing employer, providing 257,000 jobs in 2016. In addition, the sector is a vital link in the agri-food system, acting as a major buyer of Canadian primary agriculture products and providing a secure source of supply for retail and food service distributors. As stated in the Advisory Council on Economic Growth’s report: “The Council believes the first step to prosperity is ensuring the right conditions are in place to promote growth in all areas in the Canadian economy. However, we also believe that certain sectors of the economy have significant untapped potential that will require focus and attention to unlock. To realize this potential, the Council suggests an approach that uses carefully selected policy actions to remove obstacles (for example, policy barriers such as excessive regulations …) and seize opportunities (for example, by convening private and public actors and setting a sector-wide aspiration).” Currently the Government of Canada is challenging the sector to be a world leader in food production and to invest in innovation to order to help grow the economy and to address the global demand for food which is expected to triple internationally by 2050. While industry welcomes the challenge, there is a concern that a lack of policy attention and the large number of regulatory activities currently underway will shift investment funds away from innovation and growth and into regulatory compliance. The introduction of new food inspection regulations combined with new food labelling requirements and marketing restrictions, are imposing additional burden and costs on food manufacturers. The total net cost of the proposed label changes alone, when refined to address the different complexity of change by product type and the impacts on label size, equipment and retailer slotting fees, are estimated at $2.2 billion. Continued prosperity depends on the sector’s ability to maintain an economically viable manufacturing base. Taking inflation into account, in real terms, manufacturing sales were flat during the last few years and did not keep pace with population growth in Canada. While exports of processed food and beverage products continue to grow, and stood at a record value of $33.5 billion in 2016, imports are also increasing and were valued at $32.6 billion in 2016. Although the industry’s trade surplus of $883 million compares favourably to its deficits of the last few years, it remains far behind the industry’s peak surplus value of $5 billion in 2004. Furthermore, in recent years, both productivity growth and profit margins in the Canadian food processing sector have been lower than those in the United States. Several factors influence the success of this sector, yet the proposed Food Policy neglects to focus on the food manufacturing industry as a first step in making sure that Canada can produce enough food to feed its population. A National Food Policy needs to be integrated with Advisory Council on Economic Growth’s recommendations to ensure the growth and prosperity of Canada’s food manufacturing industry.
Published by Annex Bakers Journal. View All Articles.