1 17% of total
manufacturing shipments

2 296, 000 jobs
for Canadians

3 1.7% of Canadian
workforce

4 77% of processed food
and beverage products
available in Canada

5 $89 billion
of shipments

6 2% of
national GDP

It supplies approximately 77% of processed food and beverage products available in Canada. It is also the single largest market for Canadian agricultural products. Given a stronger Canadian dollar, rising input costs, a tightening credit market and increasing off-shore competition, the food processing industry like other manufacturing sectors in Canada has struggled over the past few years. This difficult business situation has resulted in the closure of a number of plants and the loss of a significant trade surplus.

Given the difficulties facing the sector, Agriculture and Agri-Food Canada (AAFC) initiated discussions with senior industry and departmental officials in June 2008, in the form of a Food Processing Competitiveness Working Group (FPCWG), to examine the situation and recommend appropriate industry and government actions to address the challenges facing the sector. The following categories were identified by industry as critical to its competitiveness:

Economics

Ability to access affordable capital to modernize and automate facilities, to enhance scale of production, to improve productivity and to address industry labour shortages specifically with regards to the recruitment and retention of foreign workers;

Market Access

Support for market development better suited to the food processing industry and better access to domestic and foreign markets;

Research, Development and Innovation

Need for programming better suited for the food processor sector, and consistent application of research tax credits; and,

Regulatory

An environment that facilitates innovation with respect to, for example, the introduction of health claims and novel foods and a level playing field with competitors.

At the initial Food Processing Industry Roundtable, hosted by the Minister of State for Agriculture with a cross-section of senior industry representatives, on June 15, 2009, the competitive issues identified above were validated by industry. A discussion paper, prepared by the FPCWG, that examined the business situation and identified the challenges facing the sector was circulated. The Roundtable participants confirmed the findings of the discussion paper.

At the close of the Roundtable meeting, the Minister of State committed that AAFC would work with industry to prepare an action plan to assist the sector to overcome the identified competitiveness challenges for presentation to industry. A draft of the Action Plan was presented at the second Roundtable meeting in April 2010. It was then agreed that the draft Action Plan would be finalized by December 31, 2010 after further consultation with industry and other interested government departments.

The call for an industry vision was frequently raised by participants at the Roundtables as an important element that should be discussed within the context of helping the sector to grow and prosper. In July 2008, AAFC implemented a five year policy and program framework for federal, provincial and territorial governments formally known as Growing Forward. However, within this framework, industry does not feel that a specific, coordinated approach to addressing the long term competitiveness of the food processing sector exists. It maintains that programs and assistance for the food processing sector vary significantly across provinces and territories.