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Eleventh meeting of the Food Processing Industry Roundtable

June 11 to 12, 2019 – Montreal, Quebec

Opening remarks

  • The Government Co-chair welcomed approximately 60 participants (see Annex B) to the eleventh meeting of the Food Processing Industry Roundtable (FPIRT) that took place on June 11 and 12 in Montreal, Quebec.

Trade

  • Agriculture and Agri-Food Canada (AAFC) provided an update on the Government of Canada’s Trade Agenda, including trade agreements; existing (Canada-United States-Mexico Agreement (CUSMA) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)) and possible future agreements (MERCOSUR - economic and political bloc comprising Argentina, Brazil, Paraguay and Uruguay, and Association of Southeast Asian Nations (ASEAN)).
  • Challenges in the current trade environment include the re-emergence of protectionism and market access interruptions.
  • It was noted that Canada’s trade policy will be reviewed by the World Trade Organization (WTO) this year.  With respect to the WTO, the immediate issue is its modernization, particularly in the in area of strengthening the dispute settlement mechanism.
  • The issue of the upcoming Global Affairs Canada review of Tariff Rate Quotas allocation was noted and is of interest to the members.  Members were encouraged to take part in consultations.
  • Regardless of the situation with Brexit, it was noted that the negotiated level of access within the Canada-European Union Comprehensive Economic and Trade Agreement will remain unchanged.

Strategic Innovation Fund

  • Innovation, Science and Economic Development Canada (ISED) presented an overview of the Strategic Innovation Fund (SIF), its criteria and described the five streams.
  • The level of support to the agri-food sector was highlighted ($20 million), as well as noting that only one project was approved to this point in the agri-food sector.
  • With respect to the stream 4 competition for agriculture and agri-food, ISED assessed 17 applications and an announcement of successful applicants is forthcoming.
  • Members showed significant interest in qualifying for the $100 million of assistance to the food processing industry that was announced in Budget 2019.  ISED indicated that this was not new monies and that it would be allocated within the existing terms and conditions of the SIF program.
  • Industry expressed concern that the SIF terms and conditions are difficult to meet for the food processing industry.  ISED responded that the industry should continue to look at other sources of assistance including regional development agencies, the Industrial Research Assistance Program of the National Research Council and AAFC.
  • Members were advised that opportunities exist within the Protein Industries Supercluster to have participation from food manufacturing companies.
  • Members discussed need for better collaboration and cohesiveness in assessing innovation needs for the food processing sector.

Tax Policy / Competitiveness

  • Finance Canada presented a general overview on tax competitiveness between Canada and the United States in terms of corporate tax systems.
  • The message was that Canada continues to have a tax system that remains competitive with the United States.
  • Members emphasized the need to understand tax competiveness within the global sense of business competitiveness and that it is important to understand how competitive the industry is vis-à-vis the United States at various levels, including tax, labour, energy, etc.
  • Members were also interested in understanding the inward and outward flow of investment in food manufacturing from Canada.

Industry 4.0

  • AAFC and ISED identified the need to better understand the level of industrial development of the sector relative to Industry 4.0 (which essentially involves the digitalization of manufacturing).
  • The CAI Global Group conducted an assessment to identify where Canadian food companies are positioned on the continuum of Industry 1.0 to 4.0, as well as to describe companies’ plans to move further along the continuum toward Industry 4.0, including drivers and barriers to adoption.
  • Findings from the study revealed a strong interest among food and beverage processors in adopting Industry 4.0 technologies:
    • About one third of respondents, indicated that they had already implemented some technologies related to Industry 4.0.
    • While three quarters of respondents expressed interest in adopting Industry 4.0, only 50 per cent of respondents indicated having made formal plans to invest in such technologies.
    • Companies indicated that increased efficiency was the primary driver to invest in Industry 4.0, while cost, the lack of expertise to implement the technologies, and the lack of awareness of available technologies were the main barriers to adoption.
  • The ensuing discussion focused on the need to consider the potential skills shortage that will occur in the sector as more sophisticated automation is introduced. The industry is currently facing a shortage of unskilled labour.  The future shortage of skilled labour will be much worse.
  • The study authors indicated that the sector is behind other leading manufacturing sectors in Canada such as automotive and aerospace in terms of adoption of Industry 4.0.

Recap since the last Food Processing Industry Roundtable meeting

  • The industry Co-chair provided a summary of the events that took place since the last Roundtable meeting on October 3 and 4, 2018.
  • The Co-chairs participated in the annual Value Chain Roundtable All Chairs meeting in Ottawa on April 16, 2019 where discussions focused on labour, regulations, innovation and market diversification.
  • The industry Co-chair was the champion on the labour discussion at the Value Chain Roundtable All Chairs meeting where he noted that improvements to the Temporary Foreign Worker Program have been useful, but more improvements are needed as labour pressures are intensifying.
  • In terms of regulations, the significant announcements that the government had made was recognized by industry, particularly in response to the recommendations from the economic strategy tables – bringing an economic lens into the regulator’s work, and implementing an annual regulatory modernization bill.
  • There was a desire, however, to understand how exactly these will be implemented and when, to make the regulatory systems demonstrably more agile.
  • An update on the economic strategy tables was also given, noting that the tables will continue, with the addition of an All Chairs-style committee which is planning to meet during the summer.
  • The work of the value chain roundtables in supporting the economic strategy tables was noted and appreciated, and continued collaboration and dialogue between the tables would be beneficial.
  • The industry Co-chair made note of the progress made against the actions items from the last Roundtable meeting.  The supporting documentation was shared with members.
  • AAFC presented an update on the FPIRT targets.  The results were mixed.  The sector is doing well on trade, but behind on domestic market share and female representation.
  • It was noted that with respect to industry sales growth, Statistics Canada recently revised the data and the baseline figure was adjusted downward.  The target will therefore be amended accordingly.

Carbon Pollution Pricing

  • Maple Leaf Foods provided a comprehensive overview on the status of carbon pollution initiatives by province in which they operate, as well as noted the challenges and opportunities that these policies present to the company.
  • It was stated that food is one the most energy intensive ecosystems so that the cost implications of the initiatives is obvious.
  • With respect to the company’s efforts, it was noted that while their actions will reduce energy intensity, it is not expected to reduce absolute levels of emissions due to overall growth in the business.  As a result, carbon neutrality will be their aspirational goal.
  • Environment and Climate Change Canada (ECCC) provided an update on the federal initiative with respect to the Output-Based Pricing System (OBPS) as well as the development of a federal offset program that could apply to agriculture for example.
  • ECCC also indicated that they are looking at allowing smaller companies to voluntarily opt into the OBPS initiative.
  • With respect to offsets, a consultation document is forthcoming.
  • Members were interested in what is expected to happen to the carbon price after 2022.  ECCC indicated that an interim review would be undertaken in 2020 and a final review in 2022.
  • Members were interested in better understanding small and medium enterprise (SME) best practices of other manufacturing sectors in terms of reducing emissions. ECCC indicated that ten percent of the rebates given to consumers will be set aside for measures to help SMEs reduce their emissions.  Details are forthcoming on that program.

Product of Canada

  • The Canadian Food Inspection Agency (CFIA) briefly described the current guidelines for domestic content claims, including the Product of Canada, as well as an update on the review currently being undertaken.
  • Members were very supportive of this initiative; they were pleased with the progress and approach, and encouraged to participate in the consultation.
  • The CFIA indicated that should a recommendation occur, it would take place in early 2020.

Regulatory Review

  • The CFIA provided a status update on the process, roadmap and next steps on the Agri-Food and Aquaculture Sector Targeted Regulatory Review.
  • The roadmap includes 33 initiatives; 30 of which fall under three themes:
    1. clear, agile, responsive regulations;
    2. competitiveness in domestic and international markets; and
    3. efficiency and consistency of regulatory programs.
  • Three remaining initiatives fall under the novel regulatory approach.
  • With respect to theme 1, the CFIA noted that food labelling modernisation regulations are expected to be public the week of June 17th.
  • The Product of Canada guideline change falls within theme 2.
  • Internal trade regulation changes are forthcoming to help align organic regulations across provinces.  As well, consideration will be given to domestic equivalents between federal and provincial safety oversight.
  • Within theme 3, of note, is the consideration given to the recognition of third party oversight, i.e. the Global Food Safety Initiative which could lead to reduced inspection requirements.
  • Further, the CFIA highlighted the intent to standardize inspection approaches as well as the introduction to digital services such as eCERT.
  • With respect to novel regulatory approaches, CFIA noted their interest in introducing blockchain technology, as well as the development of a trusted supplier approach that would give credit to high performing companies with respect to safety.
  • Health Canada noted efforts to modernize the Food and Drugs Act with respect to human milk fortifiers and policy development of supplemented foods.
  • The better use of joint international reviews to expedite regulatory approval was noted.
  • And lastly, efforts will be made to make labelling changes more predictable, in particular consideration will be given for fixed time intervals.
  • Health Canada also provided a very brief update on the elements of the Healthy Eating Strategy.
  • Members emphasized the need for government to carry out a comprehensive cost-benefit analysis and the need for regulatory changes to be based on high standards of scientific evidence.
  • Health Canada emphasised that a systematic review is undertaken of all evidence to support regulatory changes and that the department grades all evidence to ensure that only the strongest is given consideration.

Labour

  • Food & Beverage Canada (FBC) provided an overview of the labour challenge facing food and beverage manufacturing and proposed a labour model to access and retain labour to support current production levels and future growth.
  • Employment and Social Development Canada (ESDC) indicated support for FBC’s framework for looking at the issue as well as emphasized their role to provide training for Canadians to ensure they have the right skills for emerging jobs.
  • ESDC provided a brief overview of their recent sector reviews.
  • Immigration, Refugees and Citizenship Canada (IRCC) also endorsed the FBC’s labour framework and emphasized the importance of the rural pilot introduced in Budget 2019, as well as recognized the need to have recent immigrants consider locating in rural areas instead of urban centres.
  • The industry co-chair emphasized the need to recognize the urgency of the labour shortage facing the sector and asked AAFC to accept the challenge of the labour issue.
  • AAFC responded by indicating that labour remains the mandate of other federal departments but accepted to continue to do research and development in the context of the federal family to help better understand the issue, as well as continue to engage with ESDC and IRCC.
  • Members were interested in receiving any analysis with respect to the impact of the job shortage situation in terms of the sector’s gross domestic product.

A Food Policy for Canada

  • AAFC provided an update on the Policy, including the Budget 2019 funding announcements.
  • Members expressed interest in better understanding how the sector could be engaged in the process to help support a ‘Buy Canadian’ program.
  • It was noted that the consumption of seafood in Canada is particularly low and that promotional efforts could be supported by the government to increase seafood consumption.

Value Chain Roundtable Revitalization

  • AAFC provided an overview of the proposed Value Chain Roundtable (VCRT) model.
  • There was a commitment made to consult with members to ensure smooth transition once a model has been adopted.  AAFC indicated a strong need to review membership as part of the VCRT revitalization initiative.
  • Members and the industry co-chair acknowledged that it was time to revitalize the concept.

Meeting wrap up and adjournment

  • AAFC outlined a list of action items that evolved from the day and a half of discussions. (Annex A)
  • The Co-chairs thanked the participants for attending the meeting and expressed their appreciation of the in-depth discussions and engagement that took place on all topics.

Annex A – Action Items

Food Processing Industry Roundtable Action Items – June 11 to 12, 2019
Action Item Identifier
(meeting number - agenda item number)
Description
Trade 11-1 Members with an interest on Tariff Rate Quotas allocation review currently underway should follow up with Global Affairs Canada (keeping AAFC aware of their interests).
Strategic Innovation Fund 11-2i SIF successful applicants will be announced in coming weeks. It will be important to keep FPIRT members aware of those as they could facilitate the creation of consortiums of food processors, suppliers, and academics to generate SIF-type activities. (for example, companies involved in the plastics supply chain).
11-2ii To develop a roadmap to demonstrate how such collaborations can be created.
Tax Policy 11-3i Examine the question of whether the food industry is in a net investment outflow situation.
11-3ii Consider a scoping exercise on how to better assess the state of competitiveness of the food processing sector vis-à-vis the United States.
Industry 4.0 11-4 Follow up to the CAI study with an examination of the impact of moving to 4.0 and the associated change in demand for skilled labour in the sector.
Carbon Pollution Pricing 11-6 Future meetings should focus on providing members with information on industry’s current best practices to reduce emissions and share company activities in this regard.
Regulatory Review 11-7 Members should participate in the current Product of Canada online consultation.
11-8i FPIRT to offer its views on which regulatory components of the roadmap are of greatest importance.
11-8ii Members to review letter from Health Canada dated May 29, 2019 and provide feedback.
Labour 11-9i AAFC, ESDC and IRCC will share with the FPIRT analysis with respect to economic impacts of current labour shortages in the sector.
11-9ii FPIRT members will work with AAFC, based on the framework presented by Food & Beverage Canada, to identify priorities, potential mitigating actions and areas of analysis to support industry efforts to address urgent needs.
Food Policy 11-10 Continue to engage FPIRT on the implementation of specific elements of the Policy, notably branding initiatives.

Annex B – Participants

Co-chairs

  • Annette Gibbons, Agriculture and Agri-Food Canada
  • Daniel Vielfaure, Bonduelle Americas

Industry

  • Dominique Benoit, Agropur Cooperative
  • Teresa Schoonings, Bimbo Canada
  • Ron Soreanu, Coca-Cola Ltd.
  • Irving (Irv) Teper, Concord Premium Meats Ltd.
  • Martin Le Moine, Fruit d’Or
  • John Nishidate, Grand Hale Marine Products Co. Ltd.
  • Rosemary MacLellan, Gay Lea Foods
  • Brian Read, KML Meat Processors Ltd.
  • Aurélie Daccord, Lassonde Industries Inc.
  • Robert Eiser, LUDA Foods
  • Rory McAlpine, Maple Leaf Foods Inc.
  • Carol Gardin, Maple Lodge Farms Ltd.
  • Andrea Davis, McCain Foods Limited
  • Tim Sinclair, Nüüd Foods
  • Anita Jarjour, Parmalat Canada Inc.
  • Jonathan Clifford, Unilever Canada
  • Gerry Van Winden, Vegpro International Inc.
  • Philippe Blondin, Whyte’s Foods Inc.

Associations

  • James Donaldson, BC Food Processors Association
  • Luke Chapman, Beer Canada
  • Anthony van Heyningen, Canadian Beverage Association
  • Dave Shambrock, Canadian Food Innovators
  • Chris Vervaet, Canadian Oilseed Processors Association
  • Don Jarvis, Canadian Pasta Manufacturers Association
  • Sandra Marsden, Canadian Sugar Institute
  • Dan Paszkowski, Canadian Vintners Association
  • Sylvie Cloutier, Conseil de la transformation alimentaire du Québec
  • Olivier Beaulieu-Charbonneau, Dairy Processors Association of Canada
  • Chathurika Danayanda, Dairy Processors Association of Canada
  • Martin Lemire, Edikom
  • Paul Lansbergen, Fisheries council of Canada
  • Kathleen Sullivan, Food & Beverage Canada
  • Carla Ventin, Food & Consumer Products of Canada
  • Michi Furuya Chang, Food & Consumer Products of Canada
  • Jennefer Griffith, Food Processing Skills Canada
  • Denise Allen, Food Processors of Canada
  • Robert de Valk, Further Poultry Processors Association of Canada
  • Candice Appleby, Small Scale Food Processor Association
  • Sandra Mark, Small Scale Food Processor Association

Provincial government

  • Godwin Pon, Saskatchewan, Ministry of Agriculture
  • Jeff Kraynyk, Manitoba Agriculture
  • Randy Jackiw, Ontario Ministry of Agriculture, Food and Rural Affairs
  • Isabelle Allard, Ministère de l’Agriculture, des Pêcheries et de l’Alimentation du Québec
  • Pierre Yves Vachon, Ministère de l’Agriculture, des Pêcheries et de l’Alimentation du Québec

Federal government

  • Patti-Sue Lee, Atlantic Canada Opportunities Agency
  • Darlene McBain, Farm Credit Canada
  • Kasondra White, Innovation, Science and Economic Development Canada
  • Kelly Soanes, National Research Council Canada
  • Kristen Trautman, National Research Council of Canada

Guests / Speakers

  • Aaron Fowler, AAFC
  • Tom Rosser, AAFC
  • Marc Beauchamp, CAI Global Group
  • Alexander Monteil, CAI Global Group
  • Colleen Barnes, Canadian Food Inspection Agency
  • Elisha Ram, Employment and Social Development Canada
  • Judy Meltzer, Environment and Climate Change Canada
  • Miodrag Jovanovic, Finance Canada
  • Pierre Sabourin, Health Canada
  • David Cashaback, Immigration, Refugees and Citizenship Canada
  • Andrea Johnston, Innovation, Science and Economic Development Canada

Federal Support

  • Frédéric Seppey
  • Marco Valicenti
  • Sylvie Millette LeDuc
  • Warren Gould
  • Joann Perron
  • Marie-Pierre Trudel
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