Agri-food CANADA'S ECONOMIC STRATEGY TABLES - Innovation, Science and Economic Development ...
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CANADA’S ECONOMIC STRATEGY TABLES
Agri-foodAGRI-FOOD
Canada’s agri-food sector spans a wide range of industries—from primary agriculture and
aquaculture to food, seafood and beverage processing. Our passionate and hard-working
producers, processors and value chain partners have earned Canada a global reputation
as a supplier of safe and high-quality products. With the world’s population projected
to rise to 10 billion in 2050, there are huge opportunities to supply the growing global
demand for protein. Seizing these opportunities is something we can do, but it won’t be
easy. The sector faces intense competitive pressures in global and domestic markets,
which means we need Canadian leadership in innovation as well as an agile regulatory
system and enabling infrastructure to secure our position as a preferred supplier to high-
value markets.
“
VISION
Canada needs to seize
value-added opportunities,
By 2025, Canada will be one of
including more domestic
the top five competitors in the
processing, innovative
end-uses for our agri-food agri-food sector, recognized as
products, co-product the most trusted, competitive
manufacturing and turning and reliable supplier of safe, sus-
waste products into tainable, high-quality agri-food
revenue streams.
” Murad Al-Katib
Chair, Agri-Food
products and an innovator in
value-added products to feed
Economic Strategy Table the dynamic global consumer.
We will have a leading digital and
technology-based supply chain
and stand out as the world’s
favoured protein provider.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
2 Report of Canada’s Economic Strategy Tables: Agri-foodTARGETS In February 2017, the Minister of Finance’s Advisory
Council on Economic Growth identified Canada’s
agri-food sector as having great potential to be a
$140B in domestic
driver of economic growth for the nation. In Budget
2017, the Government of Canada presented a chal-
lenge to the sector by setting a goal of $75 billion in
sales by 2025, an increase exports by 2025.
from $110 billion in 2017 After assessing global and domestic trends and growth
opportunities, the Agri-Food Table set a more ambi-
tious target of $85 billion in agriculture, agri-food and
$85B in exports
seafood exports by 2025 (32% increase from $64.6 bil-
lion in 2017). In acknowledging the importance of the
Canadian market, we decided it was equally important
by 2025, an increase from to set a target for the domestic market, which we
$64.6 billion in 2017 have set at $140 billion in sales of agriculture and
food processing products by 2025 (27% increase
from $110 billion in 2017). These growth targets will
position Canada as a global leader in high-value mar-
kets and reclaim previous lost domestic opportunities.
Achieving these targets will require bold action in
regulations, infrastructure and market readiness,
supported by innovation and a future fit workforce.
Agriculture, Agri-food and Seafood Domestic Agriculture and Food Processing
Exports, 2005–2025 Sales, 2005–2025
$140 B Target
90 $85.0 B Target 140
Food Processing Sales, 2005–2025 ($ billions)
80
120
Seafood Exports, 2005–2025 ($ billions)
$64.6 B $110 B
70
Agriculture, Agri-Food and
Domestic Agriculture and
100
60
50 80
40 Export Sales
60 Domestic sales
Target Target
30 (3.5% annual growth rate) (3.1% annual growth rate)
40
20
20
10
0 0
2005 2009 2013 2017 2021 2025 2005 2009 2013 2017 2021 2025
Source: Statistics Canada and Agriculture and Agri-Food Canada Source: Statistics Canada and Agriculture and Agri-Food Canada
(AAFC) calculations. (AAFC) calculations.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Agri-food 3❚❚ WHAT WE NEED ❚❚ WHAT WE NEED
TO OVERCOME TO BECOME
There are several critical obstacles standing For Canada’s agri-food sector to succeed,
in the way of us achieving our goals. The we need:
following elements need to be overcome
An agile regulatory system that supports innovation,
in order for us to realize our ambitions:
provides certainty to industry, and protects health
Internal regulatory barriers hinder innovation and safety
and competitiveness A business climate that supports the scaling up of
Investment is lagging across all sectors, Canadian companies and makes us a top country
particularly food and beverage processing in which to invest
Lack of strong Canadian firms to lead internationally A smart, interconnected transportation system
that is free of bottlenecks
Acute infrastructure bottlenecks disrupt flow of
goods within Canada and to export markets Broadband and IT infrastructure accessible in
all communities and by all businesses
Lack of reliable broadband limits ability to take
advantage of new technologies A labour force that meets the range of skills
and experiences required to achieve sector
Tight labour markets, restricted access to foreign
growth targets
workers, and evolving skillsets for the sector all
pose challenges Access to global and domestic markets where
goods are traded more freely
Trade barriers are increasing and becoming
more complex
❚❚ THE ACTIONS WE PROPOSE
Based on research, global best practices and insights shared at Table meetings, we
propose the following five key areas to strengthen the Canadian agri-food sector:
An agile regulatory
system that promotes
the competitiveness of A diverse labour force with
the agri-food sector Develop and diversify the right set of skills to help
and moves at the Canada’s agri-food the sector achieve its
speed of commerce markets maximum potential
Build a state-of-the-art Invest in innovation and
transportation and IT boost competitiveness
infrastructure network through increased
automation and digitization
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
4 Report of Canada’s Economic Strategy Tables: Agri-food“The competitiveness of Canada’s agri-food sector is stymied by the
‘tonne of feathers’ dilemma, whereby hundreds of well-intentioned
and seemingly unobtrusive regulations add up to weigh down our
performance, productivity and growth.
”
❚❚ PROPOSAL
An agile regulatory system that promotes the
competitiveness of the agri-food sector and
moves at the speed of commerce
WHY THIS MATTERS approvals, and by not being coordinated across
Canada’s regulatory system provides globally departments and levels of government. Most
renowned quality and safety assurance to Canadians importantly, there is no central body that looks at
and our trading partners. Regulatory safeguards are, the cumulative impact of regulations from multiple
of course, a necessary part of producing, processing departments on the sector’s competitiveness.
and selling food, and essential for protecting consum- To make matters worse, amending regulations
ers, producers and other value chain stakeholders. in Canada—even those regulators agree are
Unfortunately, Canada’s system is increasingly redundant—is usually a long, technical process that
inhibiting industry’s nimbleness by restricting innov- draws considerable resources. Canada needs its
ative practices and products, by being slow to make regulatory system to move at the speed of commerce.
Global Competitiveness Index (Burden of Government Regulation) for OECD Countries
7
OECD Rank
6
5
4
Score
3
2
1 2 3 4 5 6 7 8 9 10 11 12 13 14
1
0
Switzerland
Germany
Finland
United States
Luxembourg
Netherlands
New Zealand
Iceland
Sweden
Estonia
Ireland
Norway
United Kingdom
Canada
Israel
Japan
Denmark
Austria
Turkey
Chile
Australia
South Korea
Lithuania
Belgium
Portugal
Hungary
Latvia
Poland
Spain
France
Slovenia
Czech Republic
Mexico
Slovak Republic
Greece
Italy
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Agri-food 5Canada is facing intense competi- success of this initiative is the need
tion from other jurisdictions, many WHAT WE RECOMMEND for regulators to do a better job of
of which have more agile regu- The Government of Canada set consulting earlier and more often
latory environments. If we hope in motion a regulatory reform to fully appreciate the competi-
to achieve our vision and growth agenda that includes a targeted tiveness challenges faced by the
targets, it is imperative to have review of regulatory requirements regulated party as well as the
in place a regulatory system that with a focus on agri-food and sector more broadly.
works in tandem with industrial aquaculture. We encourage the Establish a permanent
growth strategies and supports government to use this review as and independent panel of
the sector’s competitiveness. an opportunity to support industry industry experts to advise
competitiveness. regulators
Our call is to: This panel would perform a
Fundamentally transform “challenge function” by identifying
regulatory processes to efficiencies and enhance opportun-
bolster Canada’s agri- ities for industry participation. It
food competitiveness by would also work with regulators
reforming regulators’ man- to regularly review the stock of
CASE STUDY: all regulations, technical guidance
dates to include innovation,
NESTLÉ KIT KAT and associated policies to ensure
AND FORTIFIED growth and overall sector
competitiveness as a core they are necessary, appropriate
WHEAT FLOUR
consideration and effective in achieving intended
In Canada, all types of flours objectives in the most cost-effective
must be fortified with folic acid The health and safety of
and iron as part of our public
manner possible.
Canadians are, without question,
health policy. However, some The panel would identify unintended
of paramount importance. In
of our key trading partners (e.g., impacts and find ways to mitigate
the European Union, Australia) addition, our world-renowned food
safety system is a key part of our or eliminate them as quickly as
do not require it.
national brand and helps secure possible and identify opportunities
Mandating compulsory access to markets. However, for efficiencies, such as alternate
compliance with this prescriptive service delivery opportunities,
more regulation is often mis-
regulation causes business
takenly assumed to automatically compliance strategies that rec-
disruption for Nestlé when it
wants to tap into its global supply lead to better health and safety ognize a key trading partner’s
chains to source ingredients or outcomes. The fact is we need assessment of product safety,
pilot a new product in Canada smarter regulation to ensure that and third-party accreditation.
that is popular in a foreign market.
legitimate risks are mitigated at Take immediate action to
Nestlé would like an exemption the lowest economic cost. The address specific regulatory
on this requirement for products mandate of Canadian regulators, challenges that are hurting
containing a small amount of therefore, should be modernized the agri-food sector’s
wheat flour, such as Kit Kat to reflect this dynamic (including competitiveness
bars, based on the principle
the cumulative impact on com-
that these products do not Overly prescriptive and
contribute meaningfully to petitiveness), and be based on the
process-driven regulations
Canadians’ dietary intake principles of investor confidence,
are preventing companies from
of folic acid and iron. be outcome-based, and consider
adopting innovative products
the full range of regulatory and
and production systems, respond-
non-regulatory tools available.
ing to shifting market opportunities
During our Table meetings, mem-
and accessing the latest tech-
bers were unanimous that one of
nologies used by competitors.
the key elements essential to the
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
6 Report of Canada’s Economic Strategy Tables: Agri-foodRegulators need to work with –– Working with industry on –– Using the Agriculture and
industry, as well as the panel blockchain pilots to find Agri-Food Canada (AAFC)
recommended above, to identify opportunities to use secure minor use Pest Management
opportunities to achieve our strict digital ledgers for food Centre as a model, establish
health and safety outcomes at traceability, transaction an organization to generate
the lowest cost to the economy. records, regulatory data in support of minor use
Pilot Projects compliance, etc. health products and drugs for
aquaculture to keep Canadian
Pilot projects and regulatory Ongoing Regulatory Barriers producers on par with their
sandboxes can be used to test competitors who are able to
the efficacy of new technologies, In addition to launching pilot
gain access to these products
products, production techniques projects, we recommend the
more quickly. This organization
and compliance systems in a government take immediate
could leverage joint scientific
safe space and demonstrate their action to address the standing
reviews and findings from
effectiveness at improving the regulatory bottlenecks hurting the
recognized credible global
sector’s competitiveness under sector’s competitiveness. There
authorities
real-world conditions. The Table are many redundant regulations
recommends the following pilot that were drafted under different –– Ensure Aquaculture Activities
projects be launched immediately: market conditions and before the Regulations and license
introduction of modern technol- processes provide operational
Explore alternative pathways ogies. Failure to address these and economic flexibility
to front-of-package labelling ongoing irritants will drag down
that will achieve the intended –– Via a new Aquaculture Act
the sector’s competitiveness. The (and any associated regula-
outcomes of the Healthy Table has identified the following
Eating Strategy tions), reflect the need for an
issues for immediate action: economic growth approach
–– Leverage the agri-food Modernize the Canadian Grain for this sector
sector’s experience reducing Act to remove unnecessary/
trans fats without resorting to Modernize Canada’s regulatory
duplicative regulations approach for new technologies,
strict labelling and warnings
on food packages –– For example, examining with particular focus on precision
alternate service delivery breeding techniques (e.g.,
Explore innovative procedural opportunities and accrediting CRISPR), to ensure it continues
tools and processes that allow third-parties for inspection to provide an efficient and
changes to regulations that do could bring efficiencies in the predictable pathway to
not affect health and safety area of mandatory outward commercialization by:
outcomes (such as Nestlé’s weighing and inspection
example of fortified wheat flour –– Improving guidance and
currently performed by the clarity for product developers
in Kit Kat bars) to be made Canadian Grain Commission.
quickly and efficiently on the interpretation of
In addition, the process for Canada’s novelty-based
–– The pilot would identify grain classification needs regulatory trigger
best practices for regulatory to take into account
agility and inform broader market realities –– Streamlining data requirements
regulatory changes for assessment of bio-similar
–– Modernization should products (e.g., crop protection
Increase regulators’ use of digital not compromise and animal health products)
tools and services to streamline producer protection
transactions with industry by: Undertake actions to facilitate
–– Using e-certificates for economic development in the
plant and animal exports aquaculture sector
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Agri-food 7–– Undertaking greater Undertake a review of section on market development
cooperation with key trading regulations pertaining to Product and diversification).
partners—especially the United of Canada/Made in Canada
States—to reduce overlap and labels to respond to consumers
maximize efficiency by partici- increasingly looking to purchase
pating in joint reviews and Canadian products and enable
TRACKING SUCCESS
work-sharing documents and greater industry usage of the
Canada will rank in the top 10
information relating to the claims (see recommendation
among Organisation for Economic
review of pesticides and other for domestic branding initiative
Co-operation and Development
emerging technologies, included in the market
(OECD) member countries for
products and processes development and diversification
ease of regulatory burden
–– Identifying efficiencies and section of this report)
by 2025. (The World Economic
enhanced coordination of –– Use of provincial claims instead Forum ranked Canada 14 out
requirements across the of national claim fragments the of 36 OECD countries on its
three separate safety assess- marketplace and reduces Global Competitiveness Index
ments (i.e., human food, economies of scale in 2017–2018.)
animal feed and environmental The Table has assembled a list
safety for novel products of interprovincial regulations (see
of biotechnology)
❚❚ PROPOSAL
Build a state-of-the-art transportation
and IT infrastructure network CANADA’S
INFRASTRUCTURE
NETWORK UNDER
But Canada’s infrastructure PRESSURE
WHY THIS MATTERS
is already struggling to deliver In 2013–14, transportation
To support the growth targets inefficiencies created huge
products to market in a timely,
of $85 billion in exports and backlogs to shipping the nation’s
consistent manner, and long-term grain harvest. This lack of capacity
$140 billion in domestic sales by
infrastructure planning is often cost farmers across Canada an
2025, Canada needs high-quality
muddied by short-term political estimated $6.5 billion between
and resilient transportation and 2013 and 2015.1
considerations. If we are going to
communications infrastructure.
boost domestic sales and exports,
In Spring 2018, a recurrence of
A well-functioning trade-related we need to make transportation grain supply chain problems left
transportation system is critical to infrastructure development a an estimated $500-million worth
Canada’s reputation as a reliable strategic national priority. of grain waiting to get to market
due to transportation inefficien-
supplier of high-quality products
Rural areas in Canada are cies, and a portion of this value
to Canadians and people around has been lost due to missed
disproportionately affected by
the world, and to long-term overall marketing opportunities, storage
a lack of access to reliable
economic performance. New global costs and contract penalties.
broadband service. The lack of
regional trade pacts as well as
broadband service in rural areas is
population growth in Asia could
a key bottleneck to why precision
radically transform what, where
agriculture technologies and other
and how we ship in the future.
1
Canada West Foundation
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
8 Report of Canada’s Economic Strategy Tables: Agri-food“ Infrastructure is too important to the country’s economic well-being
to be politicized in election campaigns every four years.”
digital tools have not been adopted Such a plan would be critical To ensure a transportation
as widely or extensively as they to guiding long-term planning system of the future, it will be
could—and should—be. While and funding decisions, providing crucial to begin investing in
these precision agriculture technol- greater certainty and stability to new and emerging technologies
ogies offer significant productivity investors and industrial users with to support digitally enabled and
gains for primary agriculture, uni- regard to infrastructure priorities. data-driven infrastructure systems.
versal broadband service in fact The National Infrastructure Plan The data from these systems could
offers opportunities for all business would include a rolling list of be coordinated with existing data
that operate throughout the sector, high-priority short-, medium- and through a National Transportation
including logistics, advisory servi- long-term (next 50 years) infra- and Logistics Platform to inform the
ces, food and beverage processing, structure needs, and any expected National Infrastructure Plan. That
and aquaculture. Potential benefits private and public infrastructure platform would collect, integrate,
of expanding broadband service spending. The plan would be sup- streamline and publish data on:
to underserved areas includes ported by multi-modal Gateway Capacity and use of
enabling greater automation with Strategies that reflect regional strategic transportation
Industry 4.0 technologies (e.g., needs (Pacific, Atlantic, Arctic infrastructure assets
robotics, Internet of Things [IoT], and U.S. trade corridors).
machine learning, etc.), optimizing Supply chain
The plan should be developed by performance metrics for
supply chains through big data a permanent committee of govern-
analytics, achieving higher yields all transportation modes
ment and industry representatives
through more precise application that report to the federal, provincial Public and private
of farm inputs, and expanding and territorial (FPT) ministers of maintenance spending
e-commerce opportunities for transport. The committee would and investments
all businesses. meet periodically to discuss trans- in new infrastructure
portation infrastructure issues and Increasing data collection on
WHAT WE RECOMMEND ongoing updates to the proposed infrastructure assets will better
National Infrastructure Plan. position the transportation
Provide a strategic approach
Embrace digitally-enabled sector to assess infrastructure
to infrastructure planning
infrastructure systems, and uses and future needs, including
and funding with a coordin-
coordinate infrastructure and how to incorporate smart
ated 50-year rolling National
supply chain performance technologies and automation.
Infrastructure Plan developed
by government and indus- data through a new National
try, including prioritization Transportation and Logistics
of infrastructure projects to Platform
address critical bottlenecks
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Agri-food 9Create “quick wins” for the In addition, to leverage public from a range of sources will be
National Infrastructure Plan and private funding, mechanisms critical to achieving these targets,
by taking early action to such as the Canada Infrastructure particularly those for phase two.
address key bottlenecks, with Bank should be explored. Institu-
consideration of innovative tional investors and pension funds
financing solutions for may be entities for attracting and Phase I (2023)
major projects leveraging private investment in
95% coverage
transportation infrastructure. 50 Mbps download
Several infrastructure funding
Allow full participation 10 Mbps upload
programs have been announced,
yet there remains a number of in digital transformation
Phase II (2025)
critical bottlenecks that industry through 100% broadband
has identified (see map on next coverage across Canada 100% coverage
by 2025—with unlimited 100 Mbps download
page). The Table is calling for the
50 Mbps upload
National Infrastructure Plan to give data and 100 Mbps download
early consideration to projects that speeds and 50 Mbps
will result in immediate economic upload speeds
opportunities and signal the com- We recommend the government TRACKING SUCCESS
mitment of the plan’s permanent commit sustained funding for
committee of government and the appropriate mix of technol- Canada will rank in the top 10
industry representatives to help the ogies in order to achieve 100% among OECD countries in the
sector achieve its growth targets. coverage. Connecting the most infrastructure category of the
Potential quick wins could include: difficult-to-reach rural and remote World Bank’s Logistics
Upgrading trade-enabling locations will require a mix of Performance Index by 2025,
infrastructure and addressing technologies. We strongly support up from 17th in 2018.
bottlenecks at the Port Budget 2018’s commitment to Canada will have 100% broad-
of Vancouver low Earth orbit (LEO) satellites band coverage with 100 Mbps
as a good opportunity to bring download and 50 Mbps upload
Improving Canada’s National
reliable internet to rural parts of speeds by 2025.
Highway System to increase
Canada, and echo the Digital
efficiency and reduce truck-
Table’s call for Canada to be
ing-related congestion (e.g.,
a leader in development and
Quebec-Windsor corridor)
adoption of this technology. LEO
Making other high-priority satellites are a lower-cost option Canada was ranked 30th out
improvements that may of 36 OECD countries for mobile
for expanding low-latency broad- broadband subscriptions in 2017.
be identified through other band to sparsely populated areas
processes, such as the where fibreoptic cable may not be
St. Lawrence Seaway Review feasible. Partnerships and funding
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
10 Report of Canada’s Economic Strategy Tables: Agri-foodExamples of Transportation
Bottlenecks and Vulnerabilities
7
Container handling
capacity at Port
of Montreal
3 Port of Halifax –
Trucking and road congestion,
Important port for
and the Rocky Mountains
exports originating in
PORT OF Ontario and Quebec
PRINCE RUPERT PORT OF
CHURCHILL
55 Seaway and port
capacity in Ontario
1 Fraser Canyon –
CN and CP
rail mainlines
Trans-Canada
Highway
8
Chignecto Isthmus
2 Lower Mainland and Port of PORT OF
Vancouver – Important port for VANCOUVER
exports originating in Western PORT OF
Provinces
PORT OF HALIFAX
THUNDER BAY
6 9 Quebec Highway
BORDER First mile/Last
%N@AC) 185 twinning
mile goods
CROSSINGS TO THE 4 delivery in
UNITED STATES Quebec–Windsor Corridor
and Border Crossings congested
urban areas
DETROIT–WINDSOR
CROSSINGS
Western Canada 3 Trucking and Road Congestion 5 Seaway and Port Capacity to 600,000 twenty-foot equivalent
units (TEUs) by the early-2020s.
and the Rocky Mountains in Ontario
1 Fraser Canyon • Highway capacity pressures are • The St. Lawrence Seaway’s locks and Additional expansion projects at the
(rail vulnerabilities) highest in and around Vancouver, channels are operating at only 50 % of Cast and Racine terminal will add
• Lower Mainland rail access is vulnerable Edmonton and Calgary as well as their total capacity. another 250,000 TEUs in the upcoming
to weather events which can significantly along the Trans-Canada Highway • The Port of Hamilton is the largest port five years.
affect the import and export of goods through the Rocky Mountains. in terms of cargo unloaded in Ontario. Its • Rail container traffic in Montreal at
through the Port of Vancouver. • Approximately 50% of the total import movement of cargo has been connected CN Taschereau and CP Lachine has
• A 10-kilometre stretch of rail between and export containers handled by the to $6 billion in economic activity. The increased 10% in 2017 versus 2016
Ashcroft and Basque is vulnerable to Port of Vancouver marine terminals are Port has shifted from being a receiver and 9% versus the three-year average
ground hazards, as there are more moved by container trucks. of iron ore for the steel industry to a in terms of containers counts.
than 20 landslides, six of which are • The cost of intermodal trucking more diverse commodity mix, with
very active. Some are moving as drayage has increased in recent years. critical gains in agricultural cargo. Atlantic Canada
much as 100 millimetres per year. Congestion in the Lower Mainland • The Port of Thunder Bay is the Western
affects productivity of the complex Canadian terminus of the St. Lawrence
8 Chignecto Isthmus –
2 Lower Mainland (rail, road, marine off-dock system that underpins the Seaway System. It serves primarily as Vulnerability
vulnerabilities) Gateway and in turn directly affects an access point to European markets • A narrow, 23 kilometre strip of
• Complex rail operations (e.g., the cost of drayage. for Western Canadian grain producers land that joins Nova Scotia to New
interchanging, co-production) in • Railways move through very high- and can be a critical port in times of Brunswick and the rest of the country.
Vancouver combined with large grade and avalanche-prone terrain west coast port congestion. The low-lying area is vulnerable to
volumes of freight traffic of multiple through the Rocky Mountains. rising sea levels and storm surges
commodities make accessing 6 First mile/Last mile linkages a as the Trans-Canada Highway, the
terminals on Vancouver’s north and
Central Canada challenge for local goods delivery in CN Rail mainline and interprovincial
south shores a challenge and add a congested conditions around major hydro lines run immediately beside
layer of complexity to supply chains. 4 Quebec-Windsor Corridor metropolitan areas the southern dyke that holds back
• Network fluidity is further reduced and Border Crossings • Industry relies heavily on intermodal the Fundy tide. The corridor carries
because the Second Narrows rail • Transport-intensive goods production terminals/distribution centres located an estimated $50 million per day of
bridge to North Shore must be raised is concentrated along this corridor. in the Peel Region west of Toronto and trade with average daily traffic levels
regularly for marine vessels, which • Heavy traffic congestion caused by near Longueuil south of Montreal for exceeding 14,000 vehicles, including
have priority over rail. large commuting volumes experienced local goods delivery. 2,400 trucks (2015).
• The 100-year-old New Westminster on highways passing through Toronto • Considerable trucking activity is
Rail Bridge is a single-track swing and Montreal. generated accessing these areas with 9 Highway 185/Autoroute 85 –
bridge and a main link to the • Truckers routinely need to allow 50% major challenges encountered with Expansion to Four Lanes
North Shore of the port. more travel time through Toronto to goods delivery on the congested local • Quebec Highway 185 is the only
• Increasing roadway congestion, meet delivery schedules. street networks in the big cities. remaining section of untwinned
availability and cost of industrial land, • Cross-border traffic is significantly highway running between Halifax and
drayage labour stability, and lack of down from the 2001 peak with no 7 Port Capacity – Intermodal Windsor. MTQ has been expanding
public support for port activity are also anticipated need for additional border Container Terminals at the the highway to four lanes since 2002.
putting pressure on the entire gateway. capacity in the medium term. Port of Montreal Phase 1 (21 kilometres) was completed
• Currently, there are truck and port in 2011; Phase 2 (33 kilometres)
congestion issues. was completed in 2015; and federal
• Beginning in 2015, the development of funding for Phase 3 (40 kilometres)
the Viau sector from a storage facility was announced in 2015. Expected
to a container terminal will increase completion of the highway is 2025.
the total capacity of the Viau terminal
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Agri-food 11❚❚ PROPOSAL
Develop and diversify Canada’s agri-food markets
WHY THIS MATTERS markets if we are to achieve Yet as much as we see barriers
Maintaining and expanding our growth targets. being erected abroad, they exist
competitiveness in domestic and With over half of the value of at home, too. Canadian firms
international markets is essential to Canada’s agriculture and seafood often report that it is easier doing
sector growth. We need to create production exported, the competi- business internationally than
clear and well-informed strategies tiveness of the sector depends on within Canada. Canada has many
for where to play and how to win maintaining and increasing access rules and regulations at federal
in key geographic and product to key international markets. and provincial levels that have
Maximizing our performance in unintended consequences, namely
each market will require a dedi- stifling the movement of goods
cated strategy rather than a within Canada, creating additional
one-size-fits-all approach. costs, making the playing field
MAXIMIZING GROWTH uneven and inhibiting compan-
POTENTIAL To compete on a global scale, ies from scaling in Canada. As
Achieving our growth targets Canada’s sector requires a level Canada looks to compete against
hinges on all sectors meeting playing field. Canada engages agri-food powerhouses with larger
their full potential. Right now in international standard-setting
this is not always the case. A populations, lower production
bodies (ISSBs) and plays an costs and longer growing seasons,
key example is the Canadian
aquaculture sector, which has important role in developing global we cannot afford to balkanize our
the potential to nearly double standards, guidance and recom- country into separate jurisdictions
production from 200,565 tonnes mendations essential to facilitating that impede the scaling up of com-
in 2016 to 381,900 tonnes in trade. The continued integrity
2028 to meet rising demand.2 panies and the free-flow of goods
and fairness of the international and services.
However, there are significant rules-based trading system is
barriers to achieving this growth: instrumental in achieving our While the Agri-Food Table fully
growth targets. recognizes the need to compete
There is not a strong on price, we also need to differ-
economic development At the same time, Canadian firms entiate ourselves. Canadians are
focus for this sector within produce many of the types of increasingly choosing to buy and
the federal government foods enjoyed by domestic con- support local and Canadian-made
Licensing requirements sumers and sold $110 billion worth products. For producers to reach
do not facilitate long-term of goods in Canada in 2017. The this important market and be able
growth strategies domestic market has been grow- to convey the benefits of buying
ing at a faster rate than Canadian Canadian, buyers need to be
Canadian firms do not have
access to animal health
firms’ share of it, leading to lost able to easily identify Canadian
products as quickly as com- opportunity. Last year, for example, food. Consumers abroad, too, are
petitors in other countries imports accounted for nearly 30% looking for high-quality food prod-
of the processed food market, ucts that are safe and innovative.
Working with the public and
up from 22% 10 years previous. Canada should aim to be a supplier
Indigenous communities is critical
to building trust and buy-in for the With imports taking the place of of choice in all these respects.
sustainable growth of this sector. high-quality Canadian products on
the shelves at home, the Canadian Finally, if Canada is going to
agriculture and agri-food sector compete on the international
must rise to the challenge. stage, we will need compan-
ies that have the scale to go up
2
Fisheries and Oceans Canada and Canadian Aquaculture Industry Alliance
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
12 Report of Canada’s Economic Strategy Tables: Agri-foodagainst global giants. An ambitious agreements. These robust rules per year. We would like to highlight
strategy is needed to ensure our should build on well-established, the following priorities requiring
highest-potential companies obtain existing World Trade Organization immediate action:
the support they need to scale commitments.
Certification of
up and be world-leading firms. Government and industry must organic standards
continue to work together to Interprovincially traded organic
WHAT WE RECOMMEND identify measures that significantly products are subject to the Organic
harm Canada’s food export inter- Product Regulations, which require
Advance a coordinated ests, especially those that may run producers to be certified in accord-
and strategic approach to counter to trade obligations, and ance with the Canadian Organic
winning in key markets by address these measures through Standard. However, products
developing priority market all available channels, including produced and sold within a prov-
strategies for Canada and formal dispute settlement where ince must only be certified organic
key export markets appropriate. where provincial regulations require
We recommend an Agri-Food Break down Canada’s own it. Having a harmonized regula-
Market Advisory Council of barriers to trade by lever- tory environment would create
business leaders to work with aging the Canadian Free a level playing field for selling
federal, provincial and territorial Trade Agreement to create organic products in Canada and
governments on developing and a path to free trade in food uphold the integrity of the brand
implementing strategies to deter- products between provinces by allowing consumers to put
mine where to play and how to and territories by 2020 trust in a consistent standard.
win in key markets, particularly in
The Canadian Free Trade Packaging requirements
Canada, North America, Europe
Agreement (CFTA)—which came Food handlers, distributors and
and Asia. Strategies would be
into force on July 1, 2017—com- processors are prohibited from
based on market analysis of future
mits FPT governments to reduce shipping both fresh and processed
growth opportunities and supply
and eliminate barriers that restrict fruits and vegetables across
chain capacity in Canada.
the movement of goods, ser- provincial boundaries if they do not
Bolster an open and rules- vices, investment and persons meet the prescribed rules on pack-
based approach to trade by within Canada. A Regulatory aging, labelling and grading under
demonstrating strong inter- Reconciliation and Cooperation the Canadian Agricultural Products
national leadership Table (RCT) of senior government Act. Allowing goods to be shipped
International standards like those officials was created to oversee hundreds of kilometres within a
developed by Codex Alimentarius work on resolving barriers and province without having to meet
are a very important part of the developing common regulatory these requirements while barring
rules-based international trad- measures for emerging issues. a food processing plant from
ing system. The Government of sourcing the same products
Breaking down interprovincial
Canada should provide additional from a farm one kilometre away
trade barriers helps Canadian firms
resources to ISSBs to develop sci- if it happens to be on the other
capture a greater percentage of
ence-based international standards side of a provincial border is a
the domestic market, which is an
and to Canadian government regulatory inconsistency that
important market in its own right.
agencies and departments to stifles productivity and efficiency.
Removing barriers to growth within
enhance their participation in the our borders will also allow more Transportation
work of the ISSBs. The govern- companies to scale up production There is a patchwork of regulations
ment should continue to address and make the leap to international and allowances, depending on
non-tariff barriers through the markets on a stronger footing. province/territory, that has resulted
negotiation of dedicated chapters
As a first step, FPT governments in several barriers for the trucking
in areas including technical bar-
should focus their attention on industry, including on wide base
riers to trade as well as sanitary
addressing the top three or four single tires, spring weight limits and
and phytosanitary measures (SPS)
barriers to interprovincial commerce other restrictions. For example,
in bilateral and multilateral trade
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Agri-food 13certain truck configurations can sector’s online presence in growth
only be driven in British Columbia markets as well as a strong on-the-
at night and in Alberta during the ground presence to maximize the
CANADA STRUGGLES
TO COMPETE AT SCALE day, with the result that drivers may sector’s influence on consumers,
have to wait several hours before wholesale buyers/distributors, and
Large firms (500 or more
crossing the border between these food and lifestyle promoters.
employees) on average invest
more in R&D and technology provinces. Moreover, due to differ- Additionally, “Product of Canada”
adoption, and export more ing regulations on tire sizes, some and “Made in Canada” claims are
compared to smaller firms. trucks must change their tires at seen as too restrictive to be useful.
Of our 11,499 food and certain provincial borders. Address- As a result, companies tend to use
beverage processing ing these inconsistencies across provincial claims rather than adopt
establishments, 94.4% Canada would improve transpor-
are small operations with a national approach. To make it
tation systems to the benefit of the easier for consumers to quickly
fewer than 99 employees
agri-food sector, among others. identify Canadian products at a
Just 0.4% of Canadian national level, Product of Canada
agri-food companies
Aquaculture
A complex regulatory framework and Made in Canada requirements
are large firms
with no uniform set of regulations should be reviewed in collaboration
Only four Canadian seafood across governments has led to with industry and provinces.
companies crack the top
difficult and lengthy processes Create an “Own the Podium”
150 in the world in terms
of sales and none are in for establishing, amending and strategy to scale up Canada’s
the top 103 expanding aquaculture sites. most promising and innov-
This is resulting in stifled growth ative agri-food businesses
and lost opportunity for the to become world-leading
aquaculture sector. anchor firms
These four areas can be actioned Canadian agri-food companies
immediately by FPT governments are not exempt from the histor-
“ Canadian companies
need a level playing
to demonstrate their commitment
to building a formal strategy for
creating free internal trade in
ical challenge of scaling beyond
our country’s borders to become
world-leading anchor firms. We
Canada by 2020. need to support promising agri-
field to compete. food companies so they can
Increase the profile of Can-
The government roles adian agri-food products become world leaders and ultim-
by advancing a strong and ately develop into anchor firms
out the red carpet that help the sector grow as a
coordinated brand
to attract investment Currently, FPT market develop-
whole. However, we need a new
approach to close this “scaling
from foreign firms, but ment initiatives are not consistent
gap.” We support the “Own the
and do not support a unified
domestic companies Canadian brand. Canada needs a
Podium” signature initiative as
a way to focus efforts on high-
creating the same One Brand–One Voice approach
potential companies with proven
to give Canadian food products a
number of jobs and strong competitive edge and make
track records and strong continued
prospects of success.
growth don’t receive them more “visible” to consum-
ers at home and abroad. FPT
the same level
”
governments should work with TRACKING SUCCESS
of support. the Agri-Food Market Advisory
Council to establish a comprehen-
sive approach that will strengthen Canada will achieve $85 billion in
Canada’s position in key markets. exports by 2025 and $140 billion
This must include increasing the in domestic sales by 2025.
3
StatsCan, Intrafish, 2017
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
14 Report of Canada’s Economic Strategy Tables: Agri-food“Innovation is not an opportunity. It is a deliberate process we build
into every aspect of our company’s operations.
”
❚❚ PROPOSAL
Invest in innovation and boost competitiveness through
increased automation and digitization
WHY THIS MATTERS Food manufacturing investment in machinery and equipment
as a percentage of sales is trending downward,
In order to reach our growth from 2.3% in 1998 to 1.2% in 2016.
targets, Canada needs to increase
investment and technology adop-
2.5%
tion. The Canadian agri-food
equipment as a percentage of sales
sector’s expenditures on R&D as a
Investment in machinery and
percentage of sales has fallen by 2.0%
24% since 2008, and lags behind
other countries (the U.S. and
France each devote 0.6% of sales 1.5%
to R&D while Canada’s spend is
just 0.2%). Investment in machin-
ery and equipment has also been 1.0%
on a steady long-term decline. In
addition, the U.S. recently passed
0.5%
a capital cost allowance that allows
businesses to deduct the cost of
depreciable assets in one year 0.0%
instead of amortizing them over 1992 1995 1998 2001 2004 2007 2010 2013 2016
several years, further chilling
Canadian and international busi-
ness leaders’ appetite to make their
next North American investment significant scale, or help firms WHAT WE RECOMMEND
north of the border. of all sizes access national and
Encourage investment
international markets.
The relatively small amounts of and technology adoption
Canadian investment in food pro- Agri-food businesses are adopting through significant incentives
cessing innovation is fragmented digital technologies that collect including an accelerated
across a collection of universities, large amounts of data. This data capital cost allowance for
food technology centres, research is being collected but stored in machinery, equipment and
centres and incubators that col- different formats and different digital automation tools
laborate locally and have a limited platforms. This lack of interoper-
We recommend the Government
capacity (i.e., personnel or infra- ability inhibits the use of shared
of Canada introduce an acceler-
structure) to develop advanced open-data platforms that provide
ated capital cost allowance (ACCA)
technologies for the industry, important insights and enable
to help accelerate the adoption of
commercialize new products at new innovations to sprout up.
machinery, equipment and digital
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Agri-food 15automation tools by allowing with major private sector sponsors, shared data definitions and
companies to recover the costs post-secondary institutions with standards for Canada so pri-
of these investments more quickly strong agri-food R&D facilities and vate-sector players can share
and improve cash flow and rates all levels of government. It would their data, reveal opportunities to
of investment returns, thereby draw on the best practices of lower costs and manage resources
lowering their investment risk. world-leading non-governmental more effectively while strength-
We propose the ACCA should organizations such as the German ening food safety and reducing
be provided over an extended Institute of Food Technologies, environmental impacts.
period to boost the competitive- Australia’s Food Innovation The Canada Agri-Food Innovation
ness of our tax environment and Centre at Monash University, the Centre (proposed above) could
give businesses some planning Netherlands’ Food Valley innova- provide a venue for partners to
certainty, especially for larger and tion ecosystem and the recently develop open data standards
more complex projects that require announced Unilever Global Foods that address risks and concerns
investments spread out over Innovation Centre at Wageningen associated with security, privacy
several years. To maximize indus- University & Research. and intellectual property. Together
try impact, the ACCA would allow Areas of focus might include the they could also ensure that the
eligible machinery and equipment development of innovative food new Canadian data standards are
assets to be written off in one year. products and processes, activ- consistent with international ones.
Meet consumers’ evolving ities to accelerate the adoption of Definitions and standards should
desire for innovative prod- robotics, augmented reality tools, be based on principles outlined
ucts and advance industry artificial intelligence (AI), blockchain under Canada’s Open Data
development, demonstration and knowledge exchange in Initiative and related data innov-
and adoption by creating a a low-risk environment to demon- ation strategies, and facilitate an
Canada Agri-Food Innovation strate proof of concept and open operating system or multiple,
Centre de-risk adoption. interconnected open operating
We propose creating a networked Industry would work with regu- systems so data can be shared
centre or hub for agri-food innov- lators to understand how these among and analyzed by farmers,
ation that would connect existing technologies could be applied food processors, distributors,
agri-food innovation centres to to streamline data and speed up software vendors, equipment
help firms of all sizes test new regulatory compliance so entrepre- manufacturers and data
products and production tech- neurs can take advantage of new analytics companies.
niques as well as make better production systems and market
use of technologies and applied opportunities as they arise. For
research so they can scale up, example, a blockchain pilot could TRACKING SUCCESS
develop new products and be pursued to develop full product
processes, and sell to new con- traceability systems and increase Canada will increase its food
sumers. The centre would support efficiency of regulatory compliance industry capital expenditures per
applied research and provide spanning the entire “farm to fork” dollar of sales by 50% by 2025.
advanced technology platforms, supply chain.
Canada will double its food
pilot facilities, industry advisors Develop open data standards industry private-sector R&D
and events focused on practical to promote data sharing expenditures by 2025.
solutions, technology adoption and and utilization
expanding market opportunities. We recommend the Standards
The centre would provide physical Council of Canada (SCC), in col-
and virtual space for firms of all laboration with industry and global
sizes and would work in partnership partners, create guidelines on
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
16 Report of Canada’s Economic Strategy Tables: Agri-food❚❚ PROPOSAL
Foster a diverse labour force with the right set of skills
to help the sector achieve its maximum potential
WHY THIS MATTERS experiences and ideas to their jobs The agri-food sector is eager to
Primary agriculture, food processing and represent untapped potential leap into the knowledge economy
companies and related input for the sector. but faces talent shortages:
and service providers employ There are currently four jobs
approximately 3.5 per cent of for every graduate of the
WHAT WE RECOMMEND
Canadians, yet the sector continues University of Guelph’s Ontario
to report critical and ongoing labour Prepare for the workforce Agricultural College
shortages across all skill levels. The of the future by supporting
cause of this is complex, but top the sector’s capacity to plan
reasons cited by industry include a for, train, attract and retain
lack of skilled talent both in STEM human capital –– Curriculum co-development
and other high-skilled occupations The Government of Canada should between educators and
(e.g., machine technicians), lack create a skills and talent collabor- industry to ensure new gradu-
of awareness about career oppor- ation hub empowered to develop ates learn employable skills
tunities in the agri-food sector for a skills and talent roadmap for the and Canadian industries have
general occupations (e.g., electri- future involving the participation of access to a workforce with
cians, plumbers) and perceptions existing bodies and in partnership skills needed for the future
about working in the sector. Primary with educational institutions, –– Work-integrated learning
agriculture and food, beverage and industry and labour groups. opportunities, such as co-op
seafood processors also experi- placements and internships
We recommend this
ence chronic under capacity of
collaboration hub: –– Commitment to lifelong
general labour, which has forced
Assess future needs for learning and re-skilling for
these industries to rely on tempor-
all skill levels. Businesses, workers whose jobs continue
ary foreign workers (TFWs). Despite
academia and governments to evolve through techno-
being one of the top users of the
need relevant and accurate logical advancement and
TFW program, the agri-food sector
data on labour supply and market changes
is still operating under full capacity.
demand to facilitate analysis We suggest collaborating with
As we plan for the workforce the
of future skills needs and to the Government of Canada’s
agri-food sector needs by 2025,
make informed decisions. Future Skills Centre and leveraging
there is an opportunity to increase
Develop a sector-specific digital platforms to ensure good
participation of underrepresented
strategy for skills develop- matches among job seekers
groups including young people,
ment. A McKinsey survey of and agri-food employers.
women and Indigenous peoples.
The 2016 Census of Agriculture executives found industry will Promote the sector as
showed that 81% of farm operators need to play a leading role in a good career choice.
are over the age of 35, and only closing skills gaps due to A national strategic awareness
3.0% of Indigenous firms are agri- automation. The network should campaign should be developed
culture businesses even though a identify tools and strategies that so youth, job-seekers and
disproportionate number of Indigen- support the alignment of skills underrepresented groups see
ous peoples live in rural areas largely development with the future that agri-food offers rewarding
associated with agriculture. These needs of the sector. Such a career paths. Government and
underrepresented groups bring new strategy could include: industry should collaborate
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Agri-food 17to position food production Some service delivery practices
and processing as a forward- result in LMIA refusals to the
looking and cutting-edge sector. detriment of predictable access
Urban outreach could be done to labour
MENTORSHIP AS through educational campaigns, Service delivery timelines for
A PATHWAY INTO Agriculture in the Classroom and LMIAs are increasing, creating
THE SECTOR 4-H clubs to raise awareness uncertainty about the best time
The Cattlemen’s Young Leaders of the sector and its potential to submit applications to ensure
(CYL) Program pairs participants avenues for employment. workers arrive when needed
with a mentor for nine months.
To address immediate Work permits were delayed in
Through attendance at industry
events, meetings with their labour shortages facing Mexico, causing production
mentors and the completion of the the sector today, modernize and revenue setbacks
Beef Advocacy Canada program, Canada’s immigration and
the CYL participants learn about temporary foreign worker There are cumbersome
the industry, national and provin- programs to access the processes even when foreign
cial producer organizations, and workers are already in Canada.
global labour force across
the business acumen needed Among them are the need to
to succeed. As a result of this all skill levels
reapply for an LMIA, adding to
Canadian Cattlemen’s Association Canada needs access to the
program, young people begin farmers’ administration burden
global labour pool to fill jobs and increasing the risk of a
their careers supported by an
expanded network. that cannot be met domestically. foreign worker being sent home
Despite nearly 64,000 TFW pos-
itions approved in 2017 the sector Policies, guidelines, operations
still faces huge labour shortages and program changes are
and reliable access is an ongoing poorly communicated, which is
source of frustration for industry. resulting in more LMIA refusals,
Employee shortages are
increased processing times
preventing the agri-food sector To address these issues,
from operating at full capacity: and greater difficulty meeting
immediate changes to existing requirements
The Canadian Agricultural programs need to be made. As
Human Resource Council such, the Table supports resolution In addition, new program elements
(CAHRC) estimates that, of the following issues identified by will be needed to allow the Canadian
even with 45,600 TFWs, the Value Chain Roundtables: agri-food sector to access the
there were still 26,400 jobs capacity of the global labour force.
that went unfilled in Canada’s Labour Market Impact For example, a “trusted employer”
primary agriculture sector in Assessment (LMIA) applications model should be piloted to stream-
2014, which cost the sector are held up due to farm audits
$1.5 billion in lost revenues, line processing for employers who
and the farm audit process. have demonstrated integrity and a
or 2.7% of product sales.4
Producers are uncertain about proven record of trustworthiness.
More than 85% of industrial their ability to get workers when Labour gaps can also be better
butcher and meat cutter they are needed
job vacancies reported to
filled by adopting best practices
Statistics Canada for the Employers lack understanding of and service standards from the
fourth quarter of 2017 the farm inspection process and Global Skills Strategy, such as
remained unfilled for the reach of authority related to fast-tracking visa applications
more than 90 days.5 unannounced inspections for high-skilled workers.
4
CAHRC, Agriculture 2025: How the Sector’s Labour Challenges Will Shape Its Future
5
Canadian Meat Council, StatsCan
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
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