Introduction

Between the farm and the consumer’s plate, food travels through a complex supply chain involving many players in the value chain that produce, process, package, distribute, prepare and, finally, sell food products, and manage food waste. These steps require efficient logistics that employ land, air and maritime transport to deliver these products to each link in the supply chain in a timely manner. Canadians need this complex chain to function smoothly in order to feed themselves every day, while countries that import Canadian food depend on it for their food security.

This system has been put to the test over the past two years, as the global economy was rocked by the effects of the COVID‑19 pandemic as well as climate change events. These disruptions are ongoing and still pose risks to the entire sector, which is why the Standing Committee on Agriculture and Agri-Food decided on 31 January 2022 to study the challenges to Canada’s agriculture and agri-food supply chain. The Committee held hearings between 10 February and 31 March 2022 to gain an understanding of the disruptions currently affecting supply chain stakeholders but also to identify potential solutions to improve its resilience over the long term.

The Committee heard from 48 stakeholders and received 10 briefs from organizations and individuals active at various points in the supply chain. This included farmers, who grow crops or raise livestock, suppliers of fertilizer, forage and other essential inputs that farmers need, businesses that process commodities into consumer food products, and those that sell these products in retail stores and supermarkets (Figure 1).

Figure 1—Key Players in the Agri-Food Supply Chain

Source: Figure prepared by the Committee using information from Agriculture and Agri-Food Canada, An Overview of the Canadian Agriculture and Agri-Food System, 2017.

Current Disruptions

On several occasions, the COVID‑19 pandemic has caused disruptions in the agri-food sector, which have sometimes spilled over into the rest of the chain. Production has been severely affected; outbreaks in meat processing facilities, for example, have forced some farmers to keep mature cattle on the farm longer. International border closures and airport shutdowns in the spring of 2020 also limited the number of temporary foreign workers who could enter the country, complicating many different aspects of the supply chain. Fluctuations in demand have also stressed the supply chain; restaurant closures, for example, have temporarily redirected much of the demand for food from foodservice to retail.^[1] More broadly, the sector is impacted by global supply chain disruptions. Impacts include a shortage of containers and port congestion, affecting all international trade. These challenges are exacerbated by extreme weather events such as the November 2021 floods in British Columbia that destroyed farmland and transportation infrastructure or the drought in the summer of 2021 that greatly reduced agricultural yields in the western provinces.

This section outlines the most urgent problems facing farmers, which include labour issues, market fluctuations, climate change, and transport bottlenecks. It also sets out solutions the federal government could implement immediately to mitigate their impacts.

The COVID‑19 Response and Supply Chain Resilience

Over the past two years, the COVID-19 pandemic has shaken the entire Canadian economy. While some firms’ operations were disrupted from time to time by disease outbreaks or public health measures, the agriculture and agri-food sector has continued to provide Canadians with the food they need without interruption during a period of uncertainty. In its brief, the Egg Farmers of Canada noted that Canada’s supply management system allowed farmers to withstand global pandemic pressures and continue to provide Canadians with a stable, domestic food supply. Tom Rosser, Assistant Deputy Minister at Agriculture and Agri-Food Canada, highlighted the sector’s performance in the face of these challenges:

I would say that the system has performed very well, that it has continued to perform its most fundamental task of making sure that food is available to Canadians continuously, and it has been able to do that […] despite some of the extraordinary pressures associated, not just with COVID but with the droughts that we saw in western Canada, the extreme heat events and, of course, the flooding in British Columbia late last year.

This series of crises has nonetheless had a destabilizing effect on supply chains. For example, Quebec’s pork producers reported that slaughterhouses are still having trouble eliminating the backlog caused by the temporary closures of their facilities.^[2] Ian McFall, Chair of the Board of Directors of the Canadian Poultry and Egg Processors Council, called the situation “a perfect storm” that simultaneously disrupted the markets, operations, and labour force of agriculture and agri-food businesses. According to Kathleen Sullivan, Chief Executive Officer of Food and Beverage Canada, “more than 90% of Canadian food companies are experiencing supply chain issues.”

Because these challenges continue to this day, many stakeholders called on the government to be flexible in implementing certain proposed regulations. For instance, Rick Bergmann, Chair of the Board of Directors of the Canadian Pork Council, said the federal government should “take a step back and focus on the situation of the crisis and ensure that any upcoming regulations, again, that are imposed—whether it be transport related or otherwise—be reflected upon to avoid further disruption” to the sector. Likewise, Robin Guy, Senior Director of Transportation, Infrastructure and Regulatory Policy at the Canadian Chamber of Commerce, said that “now is simply not the right time to introduce new regulations that would hurt economic growth and add new strains to our supply chain.” Jason McLinton, Vice-President at the Retail Council of Canada, explained that his organization is generally in favour of proposed regulations such as front-of-pack labelling or new labelling for natural health products. He explained, however, that implementing these regulations now would divert resources at a critical moment and called for their implementation at a less sensitive time.

Recommendation 1

The Committee recommends that the Government of Canada reduce red tape to alleviate strain on Canada’s agricultural and agri-food supply chain.

Meeting Immediate Needs Through the Temporary Foreign Worker Program

A number of stakeholders highlighted the important role that temporary foreign workers have played in keeping the supply chain running during the recent crises. The agriculture and agri-food sector has been dealing with a long-standing labour shortage, which has worsened over the past two years. The representatives of the food processing industry reported that the vacancy rate in their industry increased by 10% to 15% compared with the pre-pandemic period.^[3] A number of potential solutions to this long-term issue were put forward, and they will be discussed later in the report. However, in the short run, the Temporary Foreign Worker Program appears to be the main way of addressing the urgent labour needs of businesses in the sector.

Employers seeking to hire temporary foreign workers must obtain a Labour Market Impact Assessment (LMIA) from Employment and Social Development Canada through Service Canada. This assessment determines whether any other workers in the Canadian labour force are available to do the work. This process must be completed for each individual worker. Once accepted, the LMIA remains valid for six months and enables the temporary foreign worker to apply to Immigration, Refugees and Citizenship Canada for a visa, which is valid for up to two years.

The LMIA process is intended to ensure that temporary foreign workers do not take jobs that could have otherwise been filled by Canadian workers. The agricultural sector, however, faces a well-documented, chronic labour shortage that predates the COVID-19 pandemic and efforts by producers and firms to recruit local workers have proven unsuccessful. In 2020, for example, the Quebec government offered a financial incentive to unemployed individuals who chose to work in the agricultural sector. The incentive amounted to $100 per week and could be combined with the Canada Emergency Benefit. This initiative sought to help replace temporary foreign workers who could not travel to Canada because of international border closures.^[4] According to David Duval, this program was a “failure” and did not attract the required labour force. He explained to the Committee that "[t]he people of Quebec, and probably the rest of Canada as well, find this work too demanding. It's the same in the processing sector: it’s hard work.” In her June 2020 appearance as part of the Committee’s study on the impact of the COVID-19 pandemic on the agricultural sector, Catherine Lefebvre, then Vice-President of Marachîers L&L Inc., pointed out that the local workforce was an unsuitable alternative to temporary foreign workers:

I won't hide the fact that it currently takes us two or three Quebec employees to replace a foreign worker in terms of efficiency, but especially in terms of endurance, since they have to work between 10 and 12 hours a day. Enormous costs are generated in connection with labour, as we know full well that after a day or two of work on our farms, or a week at the most, they start looking for a less physical job. Then we have to start training other workers all over again, and everything else that entails.

Processing times for LMIAs are a major irritant for agriculture and agri-food businesses because they cannot always secure the workers they need in time. According to Mr. Duval, the current time frame for obtaining workers under the low-wage stream is about six months; before 2020, it was four months. Mr. Bergmann reported that the entire process takes between 8 months and 12 months. Jarred Cohen, Policy Advisor at the Canadian Chamber of Commerce, asserted that LMIA processing times should be six to eight weeks. Simplifying the LMIA application forms would also help reduce the administrative burden on employers, according to the Union des producteurs agricoles. In a written response to the Committee, the organization provided a simplified application form that removes 24 questions from the original form. These questions include those that are redundant with information already provided in the job offer that the employer must provide along with the application.

A new LMIA is necessary to recruit an additional temporary worker or to renew a current worker’s work permit. The requirement to repeat this process is a significant obstacle for businesses that constantly need temporary labour because of persistent labour shortages. Witnesses proposed several solutions to this problem. The validity of LMIAs could be extended beyond the current six-month limit to up to two years, as suggested by Jean‑Michel Laurin, President and Chief Executive Officer of the Canadian Poultry and Egg Processors Council, or up to three years, as proposed by Martin Caron, General President of the Union des producteurs agricoles. In December 2019, Service Canada announced a pilot project allowing it to issue LMIAs with a two-year employment duration for jobs in the meat processing industry. To be eligible, the employer must demonstrate that they have undertaken activities to support the employee's application for permanent residence, for example by recruiting a temporary foreign worker who has the necessary language skills to obtain permanent residence or by assisting the worker in becoming well-positioned for their permanent residence application.^[5]

Creating a trusted employer system that enables businesses that have complied with the program requirements in the past to use a simplified process would also reduce the administrative burden. The mandate letters of the Minister of Employment, Workforce Development and Disability Inclusion and the Minister of Immigration, Refugees and Citizenship include a commitment to implement such a system, and multiple witnesses expressed enthusiasm about this announcement.^[6]

The 10% limit on the proportion of foreign workers who can be employed in low-wage positions at a single business limits the ability of food processing businesses to meet their still critical labour needs. In August 2021, it was announced that this limit would increase to 20% in Quebec.^[7] This measure was implemented at the request of the Government of Quebec, to which the federal government has delegated certain immigration responsibilities, notably within the framework set by the 1991 Canada-Quebec Accord on Immigration and Temporary Admission of Aliens. This decision was applauded as a step in the right direction. However, Marie‑France MacKinnon of the Canadian Meat Council argued that even this higher level is insufficient, as meat processing companies in Quebec are facing job vacancy rates of over 30%. Moreover, she reported a troubling shortfall of 10,000 butcher positions. Many witnesses agreed that raising this limit to 30% would give businesses in the sector more flexibility to deal with the scale of the current labour shortage.^[8]

Recommendation 2

The Committee recommends that the Government of Canada negotiate with all provinces and territories on integrating the Temporary Foreign Worker Program with their labour policy goals.

Since businesses can use the Temporary Foreign Worker Program on a permanent basis, a number of witnesses said that more should be done to make it easier for these workers to obtain a status that lets them stay in Canada permanently. Ms. Sullivan said that Canada should “have, attached to any program we put in place, really clear and workable pathways to residency for any of these workers who come in.” Multiple witnesses from the sector reiterated this statement, and some recommended extending the Agri-Food Pilot, which provides a pathway to permanent residence for temporary foreign workers doing non-seasonal, specialized work.^[9]

Summarizing all these recommendations, 11 agri-food processing organizations represented by Food and Beverage Canada recommended that the government implement an emergency foreign worker program to meet the sector’s urgent labour needs.^[10] Over an 18‑month period, the program would implement measures such as the following:

• Expanding the two pilot projects to all food processing jobs and extending them until the end of 2023;
• Raising the cap on the proportion of temporary foreign workers to 30%; and
• Aligning processing times for the various streams of the Temporary Foreign Worker (TFW) Program and the Seasonal Agricultural Worker Program (SAWP).

Noting the importance of seasonal workers to the produce sector, Ron Lemaire, the President of the Canadian Produce Marketing Association (CPMA), reiterated his organization’s ongoing call for improved access to workers under the SAWP and the agriculture stream of the TFW Program. The CPMA has previously recommended that the Government of Canada introduce a trusted employer program to expedite the hiring process for qualified producers who have maintained good standing with the SAWP.^[11]

On 4 April 2022, after the Committee had completed its study and drafted the initial version of this report, the Government of Canada announced changes to the Temporary Foreign Worker Program. Among these changes is an increase from 10% to 30% in the limit of low-wage temporary foreign workers in seven sectors with demonstrated long-term labour shortages, including food manufacturing, as well as an extension of the period of validity of LMIAs to 18 months.

Recommendation 3

The Committee recommends that the Government of Canada take urgent measures to improve the Temporary Foreign Worker Program’s outcomes for the agriculture and agri-food sector including:

• Measures to make the Program more accessible and more efficient for employers:
• Increase Temporary Foreign Worker application processing capacity and reduce processing times;
• Reduce the time frame from the initial application to the worker’s start date, as well as the costs imposed by the federal government;
• Require only one Labour Market Impact Assessment per site, and make it valid for three years;
• Extend the work visa validity period from 24 months to 36 months and make visas renewable after three years; and
• Maintain, streamline, and improve processes for the Seasonal Agricultural Worker Program, incorporating a trusted employer feature for those situations where full-time employment on a seasonal basis is required annually.
• Measures to increase the long-term availability of workers in the agriculture and agri-food sector:
• Raise the cap on Temporary Foreign Workers from 10% to 30% across Canada;
• Make the Temporary Foreign Worker Program a pathway to permanent residence for workers who want it, notably by making it easier for their families to come here;
• Raise awareness among refugees of employment opportunities in the agriculture, food and beverage manufacturing sectors; and
• Extend and expand immigration pilot projects for the meat processing sector.

Price Fluctuations and Market Disruptions

Pandemic-related disruptions have caused major swings in agricultural input markets. In addition, these fluctuations have been amplified by extreme climate events such as the severe drought on the Prairies in the summer of 2021 and the fall 2021 floods in British Columbia’s Fraser Valley, and the war in Ukraine and recent geopolitical tensions. Catherine Lefebvre, President of the Quebec Produce Growers Association, gave the Committee an example:

[S]everal raw materials such as fertilizers, pesticides, seeds and other essential products such as cardboard, pallets, packing sacks, construction material and machinery parts are affected by the phenomenon of rising prices.

Ms. Lefebvre explained that these fluctuations are occurring “in a context where increases in production costs aren’t accompanied by similar increases in sales prices.” The increase in fuel prices and other expenses are also affecting every part of the food supply chain, from primary producers^[12] to retailers^[13] to processors.^[14] Several stakeholders have called to adapt the carbon pollution pricing system to the constraints of the agriculture sector in this context of rising input prices. For instance, Tim Lambert, Chief Executive Officer of the Egg Farmers of Canada, explained that these policies do not always incentivize adoption of more sustainable practices as “many technologies are not advanced enough or remain too costly to adopt” to represent a viable alternative. For the same reason Bill Campbell, President of Keystone Agricultural Producers, considers that grain drying and heating of barns for livestock are two activities that should be exempted from the carbon pricing system as there are only limited alternatives to the use of propane and natural gas for these activities.

Recommendation 4

The Committee recommends that the Government of Canada consider exempting natural gas and propane used for essential agricultural activities—such as grain drying, irrigating land, and the heating and cooling of livestock barns— from the carbon pricing mechanism in jurisdictions where the Greenhouse Gas Pollution Pricing Act applies.

The witnesses the Committee heard sounded the alarm about the rapid rise in fertilizer and animal feed prices. Price inflation for these two inputs has an especially large impact on primary producers. According to Statistics Canada, in the third quarter, animal feed prices increased by nearly 30% over early 2020 levels. Fertilizer prices have also sharply increased in line with the evolution of world food prices (Figure 2).

Figure 2—Changes in the Price Index for Selected Farm Inputs in Canada and Global Food Prices

Note:      Price index of inputs to agriculture (Feed and fertilizer) base 100 for 2012; FAO Food Products Index base 100 for 2014-2016.

Source: Figure prepared by the Committee using data from Statistics Canada, Farm input price index, quarterly, accessed 17 March 2022 and Food and Agriculture Organization of the United Nations, FAO Food Price Index, accessed 20 May 2022.

A number of factors have fuelled the spike in animal feed prices. Broadly speaking, it is the result of rising grain prices.^[15] In Western Canada, the summer 2021 drought affected forage supplies. James Bekkering, Chair of the Board of the National Cattle Feeders’ Association, said that Alberta currently has “only a one- to two-week supply of feed grain available” and that cattle feeders are having to pay exorbitant prices to import most of their feed from the United States because of a lack of local supply.^[16]

As for fertilizer prices, Fertilizer Canada representatives attribute their increase to a strong demand for grains, which leads primary producers to boost production and therefore use more fertilizer.^[17] In a brief submitted to the Committee, the National Farmers Union argues that this trend is exacerbated by the fact that while agricultural producers are price takers, the highly concentrated input production sector can dictate prices. These price increases have been amplified by export restrictions that countries such as China have put on grains to ensure they retain vast supplies in case of food price inflation.^[18] Russia, China and some European countries have also limited their exports of fertilizer to make sure they can meet domestic demand, shrinking the global supply of fertilizer.^[19]

Since 24 February 2022, the war in Ukraine has increased inflationary pressures in fertilizer. On 2 March 2022, in response to the Russian invasion, the Government of Canada revoked the Most-Favoured-Nation tariff status of Russia and Belarus, subjecting all imports from these countries to a 35% tariff.^[20] Canada is a major producer of nitrogen fertilizer and potash. However, while the country produces enough nitrogen fertilizer to meet demand in Western Canada, Eastern Canada is supplied by international markets through the St. Lawrence Seaway, and Russia is Ontario’s second-largest fertilizer supplier and Quebec’s largest.^[21]

Benoit Pharand, Chief Executive Officer of Réseau Végétal Québec, said that this decision is posing problems for Quebec’s farmers, who have already bought all their supplies for the current crop year. Deliveries were already on their way when Russia’s tariff status was revoked, and they could be subject to these tariffs on arrival in port. Karen Proud, President and Chief Executive Officer of Fertilizer Canada, added that these tariffs will add to the spike in prices stemming from the war in Ukraine. She said her organization has contacted the government to determine how the tariffs will be applied and to discuss the possibility of compensation for the businesses affected. However, she noted that concrete measures to address the situation have not yet been implemented. The Committee shares the concerns expressed by witnesses about the possible application of prohibitive tariffs on fertilizer shipments for which transactions were concluded before 2 March 2022 and calls on the government to take measures to ensure that farmers are not penalized by this situation.

Recommendation 5

The Committee recommends that the Government of Canada explore opportunities to make domestic production more resilient in response to global events, notably geopolitical situations that may result in supply chain disruptions in the agricultural sector. The Government should also address the situation of Canadian agricultural producers and fertilizer distributors who purchased fertilizer from Russian suppliers before the implementation of tariffs on 2 March 2022 and clarify whether they are entitled to an exemption or other compensatory measures.

The business risk management programs established under the Canadian Agricultural Partnership are designed to support farmers who face unexpected expenses and income declines due to market fluctuations. The AgriStability program can provide payments to farmers whose production margin drops below 70% of their reference margin, which is based on the average of previous years. Payments cover 70% of the difference between the reference margin and the production margin in the year in question. According to Mr. Caron, AgriStability is a tool that was designed to deal with the kind of crisis that is currently affecting the sector as input prices change. However, multiple stakeholders argued that, for these programs to be fully effective, the threshold for issuing payments should be raised to 85% of the reference margin.^[22] The federal government has proposed changes to the program, notably increasing its compensation rate to 80% of losses. This change could result in an increased payout of $170 million to producers nationwide. This proposal, however, requires unanimous approval from the provinces and territories to be implemented.^[23]

Recommendation 6

The Committee recommends that the Government of Canada work with the provinces and territories to immediately increase the coverage level of AgriStability to 85 % of losses and increase the payment trigger of AgriStability to cover losses below 85 % of the reference margin and that it apply this change fully in the provinces and territories that agree with this measure and cover the 60% of payments for which the federal government is responsible in the others.

Transportation Bottlenecks

Supply chain disruptions are particularly apparent in transportation, where major delays and dramatic price rises are hitting farmers hard. In shipping, the disruptions consist of backups at ports and container shortages. The causes include huge swings in global supply and demand in manufactured goods during the pandemic, which, among other effects, knocked the worldwide supply of containers out of balance.^[24] Extreme flooding in British Columbia has also caused significant disruption to feed imports into Western Canada.^[25]

Delays in maritime transportation were one of the main stakeholder concerns that the Committee heard. Greg Northey, Vice-President of Pulse Canada, said it can take 70 days to 90 days to ship pulses to India – one of the sector’s key export markets – compared with 20 days to 40 days before the pandemic. He reported that some containers “have sat at port for up to six months before getting on a vessel.” Guy Milette, Chair of the Board of Directors of the CPMA, said that, in response to unpredictable shipping times, container freight companies have absolved themselves of their responsibility to deliver cargo on time. As a result, produce farmers “don’t even have recourse because [these companies] took 60 days to deliver your bananas instead of 21, even if the cargo is a total waste.” This issue is discussed later in the report, in a section on the problems arising from concentration in the shipping industry.

As transportation delays have increased, so have prices. Some stakeholders reported that freight costs have tripled since the pandemic began.^[26] A representative of the CPMA said that this translates into $250,000 in additional weekly freight costs for the organization’s members.^[27] At the same time, as Brian Innes, Executive Director of Soy Canada, pointed out, the price of containers has increased by 100% to 150%. The “Coalition to Fix the Container Crunch”, which comprises several agricultural organizations including Soy Canada, reports that the average price to ship a standard container has risen from $1,461 at the beginning of 2020 to $11,109 in September 2022. At the global level, the Freightos Baltic Container Index which reflects the spot rates for 40-foot containers on 12 tradelines reported rates above US$9,000 during the first three months of 2022.

Recommendation 7

The Committee recommends that the Government of Canada ensure that the Minister of Agriculture and Agri-Food work in close collaboration with the Minister of Transport and the Minister of Labour to ensure adequate shipping container availability for agricultural inputs and exports through Canadian ports.

Sectors that depend on truck transport are also dealing with major challenges related to transportation. Mr. Bergmann said that the pork industry was facing a pre-existing shortage of drivers trained to transport livestock. According to some witnesses, this shortage was increased by some measures that have been taken in response to the COVID-19 pandemic such as the vaccination requirements for crossing the land border taken in the United States and Canada. Carla Ventin, Senior Vice-President of Government Relations at Food, Health & Consumer Products Canada, gave an illustration of these perturbations:

I would just say that the trucking mandate has caused additional hiccups for the cross-border delivery of food. Most of our products are delivered by truck, as well as containers and rail, so what we saw was a bigger problem with shortages and more hesitation. This had to do with, I think, individual hesitation among truck drivers who didn’t feel comfortable getting the vaccine, but it also speaks to the blockades in Canada.

Mr. Bekkering added that the international mandates have “taken another portion of the workforce out of what is already an industry with a short supply of truckers.” These disruptions were amplified by protests that blocked traffic at several Canada-U.S. border crossings in February 2022. Several witnesses spoke of problems they faced transporting products to and from the United States because of these blockades.^[28] For Mr. Guy, the blockades resulted in "serious economic and reputational consequences" for Canada. Overall, stakeholders argued that adding any further stress to cross-border exchanges has the potential of exacerbating supply chain issues.^[29]

Long-Term Challenges

Long-Standing Labour Challenges in the Supply Chain

Even before the COVID-19 pandemic, Canadian employers involved in the agriculture and agri-food supply chain reported difficulties recruiting and retaining workers. Jennifer Wright, Acting Executive Director and Director of Operations, Programs and Partnerships at the Canadian Agricultural Human Resource Council, cited figures from her organization’s labour market research indicating that, in 2018, the agricultural sector was already facing “exceptionally higher” job vacancies compared to other industries, resulting in an estimated $3 billion in lost revenues that year.

According to data from Statistics Canada (see Figure 3), job vacancies in the primary occupational fields that compose the agriculture and agri-food supply chain (crop and animal production, food manufacturing, food and beverage stores, truck transportation), have, in many cases, been considerably higher than the average vacancy rate for all Canadian industries.

Figure 3—Job Vacancy Rates in Selected Agricultural and Agri-Food Sectors, 2015–present

Source: Chart prepared by the Committee with data from Statistics Canada Table 14-10-0326-01, Job vacancies, payroll employees, job vacancy rate, and average offered hourly wage by industry sector, quarterly, unadjusted for seasonality, using North American Industry Classification System (NAICS) codes 111 (Crop production) 112 (Animal production and aquaculture), 311 (Food manufacturing), 445 (Food and beverage stores), and 484 (Truck transportation) for Q1 2015 to Q4 2021.

Witnesses reported that the pandemic has exacerbated these pre-existing labour shortages by increasing illness-related absenteeism and leading some workers to leave the sector entirely in favour of career opportunities that offered a greater work-life balance, notably the option of working from home.^[30]

In his testimony, Mr. Rosser acknowledged that the sector’s labour shortage remained “pretty severe” and explained that the Department of Agriculture and Agri-Food was working with other relevant departments and external stakeholders to develop a labour strategy for Canadian agriculture and agri-food.

Ms. Wright encouraged federal departments to work with educational institutions, sector associations, and other stakeholders to develop a long-term labour plan for agriculture and food manufacturing, similar to the Australian government’s recent National Agricultural Workforce Strategy.

Food and Beverage Processing

Worker shortages are particularly acute in the food and beverage processing sector. Ms. Sullivan told the Committee that the sector’s average vacancy rate had increased from 10% before the pandemic to a current level of 25%. In contrast, according to the Statistics Canada data referred to in Figure 3, the average vacancy rate for all Canadian industries increased from 3% in the fourth quarter of 2019 to 5.4% in the fourth quarter of 2021.

Such worker shortages limit the ability of firms to expand and reach their full economic potential, including the Barton Report and the Agri-Food Economic Strategy Table’s long-term growth targets for Canadian agri-food exports. Mr. Duval testified, for example, that his firm exported as much as a quarter of its bone-in meats last year to Latin America and Asia for processing owing to a shortage of Canadian labour, allowing firms in other countries to take advantage of value-added processing opportunities that could have instead contributed to the economic targets Canada has established for the sector.

Ms. Ventin spoke of the importance of food manufacturing firms developing “human infrastructure” or greater support for workers, including access to childcare and transport. Ms. Sullivan added that many agri-food facilities operate in rural or remote areas not served by mass transit and that a shortage of affordable housing options in proximity to these facilities also acted as an impediment to recruiting workers. Ms. Sullivan explained that some firms had responded to these challenges by offering employees shuttle bus services or subsidized housing options.

Ms. Sullivan also noted that the sector’s workforce is older on average, raising the prospect of further labour shortages over the next decade. She cited the example of Maple Lodge Farms, a poultry processor, where nearly a quarter of the workforce will be reaching retirement age in the next five years.

Raising Awareness of the Agriculture and Agri-Food Sector Among Young People

Echoing a recommendation the Committee made in its 2021 report on increasing Canada’s processing capacity, several witnesses called for the sector to expand its outreach efforts to increase awareness of and interest in the sector, particularly among young people.

Mr. Guy of the Canadian Chamber of Commerce, for example, stressed that “talent pipelines” start early and encouraged efforts to help students and educators make more informed career decisions in line with economic needs. Ms. Wright shared that her organization had recently undertaken activities at the post-secondary level to encourage students in non-traditional fields, such as biology and finance, to consider internships and career opportunities in agriculture. Pascal Thériault, Agricultural Economist and Director, Farm Management and Technology at McGill University, encouraged greater efforts to improve public awareness and appreciation of the agri-food sector, particularly among students in non-traditional programs, such as sciences and skilled trades:

As soon as you come out of the typical farming environment, you have a very poor understanding of what the agri-food sector involves and the technological level of agri-food production. Guidance counsellors, for example, are not inclined to guide young people into this sector. Why train a biologist rather than an agronomist? We need both, just as we need technologists and vocational graduates, who can do agricultural mechanics instead of mechanics as such. The agri-food sector has long been taken for granted. We need to succeed in promoting agri-food specificity in the training programs.

Commercial Truck Drivers

Truckers play an important role at every stage of the Canadian agri-food supply chain. They are responsible for transporting inputs to producers, bringing raw commodities to processors and suppliers, and delivering finished products to Canadian retailers and transport hubs for export. The truck transportation sector faces a high job vacancy rate, with several witnesses citing a shortage of truck drivers as a significant source of supply chain disruptions, including increased freight costs for agri-food producers and processors.^[31]

These shortages predate the COVID-19 pandemic, with Employment and Social Development Canada (ESDC) noting that the sector faced a 6.6% job vacancy rate in 2018, more than double the average Canadian job vacancy rate at the time. Trucking HR Canada, a non‑profit organization that monitors labour issues in the Canadian trucking industry, notes that the sector’s vacancy rate increased to 8% in the third quarter of 2021 despite a low sectoral unemployment rate, suggesting that the industry is quickly running through its available labour pool.^[32]

The ESDC analysis notes that, while truck driving jobs pay relatively well, drivers face 12‑hour shifts, long absences from home, and stringent licensing requirements, making the job less attractive to many Canadians. The analysis also anticipates labour shortages to increase in coming years as a large proportion of current truck drivers reach retirement age and younger prospective drivers, who tend to face higher insurance premiums, are discouraged from replacing them. Gary Sands, the Senior Vice-President of the Canadian Federation of Independent Grocers, similarly cited the high costs of training programs and insurance as obstacles that keep new drivers from entering the industry. Mr. Lemaire noted that while driver licensing is a provincial and territorial responsibility^[33], the federal government should consider ways it could support these jurisdictions to recruit and retain new truck drivers.

Mr. Bergmann explained that his sector was seeing a shortage of commercial truck drivers trained to handle livestock. The shortage of such trained transport workers has important consequences throughout the supply chain: livestock farmers rely on transport and logistics companies for access to slaughter facilities, which have become increasingly centralized and often involve long journeys. Interruptions to planned livestock deliveries can result in lower farmgate prices for overweight livestock and the cost of having to feed animals for longer than anticipated.

Dr. Al Mussell recommended to the Committee that the trucking industry, and the larger agri-food sector, should move from its traditional approach to labour as a cost to be managed to one where talent is fostered and recruited.

Recommendation 8

The Committee recommends that the Government of Canada work with the provinces and territories—in partnership with stakeholders from agriculture, industry, and labour—to prepare a comprehensive labour strategy for the agriculture and agri-food industry, including a review and forecast of its labour and skill requirements and an assessment of short and long-term labour and skill availability. This strategy should take note of the sector’s persistent labour shortages and consider the following issues in accordance with the powers of each jurisdiction:

• ensuring Canada’s agriculture and agri-food workforce can meet the sector’s trade targets and help ensure greater food security and domestic food sovereignty, particularly in view of recent geopolitical events;
• attracting young people to the sector, including increased funding for youth training and job creation in the industry and efforts to build awareness of such options among Canadian students;
• developing incentives and other strategies to retain experienced workers, including an examination of federal social security programs to ensure workers are not penalized for remaining in the workforce after they reach retirement age;
• addressing long-term recruitment challenges in the sector by making it more attractive to Canadian workers, including by examining opportunities to leverage private capital for housing options for low- and middle-income workers in proximity to existing agriculture and agri‑food facilities;
• evaluating the Temporary Foreign Worker Program and other Government of Canada initiatives that allow employers to recruit international workers to make sure they align with the sector’s long-term needs;
• addressing worker shortages in ancillary sectors, notably commercial truck drivers; and
• investing in automation and production efficiency as a partial solution to labour shortages and making sure the agriculture and agri-food workforce has the technical skills necessary to keep the sector efficient and innovative.

Transportation Infrastructure

Transportation Corridors

As Ms. Sullivan noted in her testimony, the agri-food sector has experienced a string of disruptions over the past three years that have obstructed firms’ ability to bring their goods to market, including the 2019 CN rail strike, the 2020 rail blockade protests, the 2021 floods in British Columbia, and the recent winter 2022 blockades at Canadian border crossings with the United States.

As described earlier in this report, operators also face congestion-related bottlenecks across the country, many of them surrounding major ports of entry and international border crossings. Mr. Rosser explained that the Department of Agriculture and Agri-Food would be working with the Department of Transport to use funds from the National Trade Corridors Fund to develop a National Supply Chain Strategy to address these bottlenecks and improve efficiency throughout the supply chain.

While witnesses welcomed this proposal, several of them encouraged the federal government to look beyond short-term considerations and to take a long-term planning approach to agri-food infrastructure. Murad Al-Katib, the Chair of the Agri-Food Economic Strategy Table, reiterated the Table’s recommendation that infrastructure decisions should consider Canada’s long-term economic growth rather than simply respond to immediate needs or bottlenecks. Mr. Guy shared this perspective, explaining that Canada had what he called an “infrastructure deficit” and should look beyond existing gaps to the future needs of its economy. As discussed in the “Climate Change” section below, several witnesses also mentioned the importance of investments in adapting transportation infrastructure to climate change.

Several witnesses noted that Canadian agricultural and agri-food production is expected to rise significantly over the next decade and warned that current infrastructure might not have the capacity needed to handle such an increase. Dave Carey, Vice-President of Government and Industry Relations at the Canadian Canola Growers Association, told the Committee that an effective and reliable rail system was essential for farmers to move current crops as well as future varieties under development. He also noted the importance of reliable transport for building consumer confidence in export markets for Canadian goods and encouraged implementation of the 2015 Review of the Canada Transportation Act. This Review made a series of recommendations in the 20–30-year range to improve transit systems and help grow the Canadian economy.

Recommendation 9

The Committee recommends that the Government of Canada establish the National Trade Corridors Fund as a permanent program used to leverage and attract increased private sector financing that directly supports a national supply chain strategy, including predictable and reliable infrastructure to move agricultural commodities and agri-foods.

Several witnesses brought up improvements to port infrastructure to allow goods to be taken to market more easily, including expanding capacity at Canadian marine terminals, improving the speed with which goods are loaded and unloaded from ships—including the customs process—and improving intermodal transport connections. In a brief submitted to the Committee, the Canadian Association of Port Authorities reported that Canada’s 17 port authorities have received $872 million in funding from the Government of Canada’s National Trade Corridors Fund (NTCF) since 2018 to address these and other infrastructure issues. Recent NTCF investments in ports include $5.5 million for the Hamilton-Oshawa Port Authority to expand its agri-food export capacity and a $76.9 million upgrade to the Thornton Rail Tunnel at the Port of Vancouver to increase transport capacity at its north shore facility.^[34] The Canadian Association of Port Authorities’ brief also noted that legally imposed borrowing limits and other restrictions limit Canadian Port Authorities’ access to private capital to invest in infrastructure projects.

Mr. Carey described the limited intermodal options at the north shore grain terminal at the Port of Vancouver, Canada’s largest marine terminal and the port through which the overwhelming majority of Canada’s canola and grain shipments are sent^[35]:

There’s one rail line that transits through a tunnel and then over a lift-bridge, both owned by that railway, to access the four grain terminals on the north shore. This route also serves the other bulk commodity terminals, such as for sulphur and coal. There’s no backup routing to serve these terminals in the event of a disruption on the tunnel or bridge.

Several witnesses highlighted the complexity of coordinating shipments between different modes of transport. Mark Hemmes, President of the Quorum Corporation, explained that railways did not always provide adequate car capacity to deliver products to port, leading to demurrage charges (fees for taking longer than permitted to load or unload a railcar) and port congestion. Mr. Comeau noted that his Vancouver Island-based firm, which is heavily dependent on rail deliveries of grain from mainland British Columbia, had recently seen demurrage charges of as much as $5,500 a month. Mr. Campbell noted that these charges, which can range between $25,000 to $35,000 per day, are eventually borne by producers through higher freight shipping rates. Mr. Campbell called for greater coordination between railways and shipping companies and the possibility of fines for Class 1 railways that do not honour their commitments under federally mandated grain plans.^[36]

While shipping and customs delays negatively impact all sectors, they can be particularly detrimental for those dealing in perishable food products such as meats and fresh fruits and vegetables. In a brief submitted to the Committee, the CPMA called for increased investment in cold chain infrastructure, notably access to refrigerated containers at ports. In his testimony, Mr. Lemaire also asked for quicker inspection and processing of perishable items at ports. Mr. Bergmann of the Canadian Pork Council similarly asked for time-sensitive commodities, notably meats, to be expedited through ports and granted the same exemption that grain vessels currently receive under the Canada Labour Code from strikes at ports. Mr. Hemmes explained that railways can take months to recover from unexpected outages, as in the case of their recovery from the British Columbia floods in November 2021, and recent disruptions such as labour disputes and blockades.

Mr. Al-Katib called for a wide assessment of Canadian transportation options to ensure commodities had access to the transportation system best equipped to move them safely to market. He noted that particular attention had to be paid to separating systems that move bulk commodities to those that move higher-quality perishable products. Mr. Al-Katib summarized this approach as, “get(ting) products that belong in pipes in pipes and […] get(ting) product that belongs on rail on rail.”

Recommendation 10

The Committee recommends that the Government of Canada ensure Canadian railways have sufficient capacity and resilience to transport perishable goods, including produce and meats, in a safe and timely manner.

Supply Chain Commissioner

In January 2022, the federal government held a National Supply Chain Summit that included representatives from the federal departments of Transport and Agriculture and stakeholders from the agri-food sector. At the Summit, the government announced the creation of a National Supply Chain Task Force to examine the situation faced by Canadian supply chains and recommend short and long-term actions to improve their efficiency. Witnesses generally welcomed the Task Force’s establishment, with some calling for the government to appoint a Supply Chain Commissioner^[37] who would be able to convene stakeholders and carry out decisions rather than simply make observations and recommendations.

Several witnesses cited the example of the United States Ports Envoy, a position created as part of that country’s Supply Chain Disruptions Task Force in August 2021, as a model for this role. Mr. Northey noted that John D. Porcari, the individual appointed to that position, had been able to make what he saw as tangible improvements in U.S. port performance and container movement. In a January 2022 press conference, Mr. Porcari noted that, among other accomplishments, the U.S. Supply Chain Task Force had helped to achieve a 40% reduction in the number of long-dwelling containers at the ports of Los Angeles and Long Beach and had also increased capacity for agricultural exports at the Port of Oakland.^[38] According to Dr. Rebecca Lee of the Canadian Horticultural Council, many of the issues involved in supply chains touch on different areas of federal jurisdiction, requiring someone to coordinate a whole-of-government approach:

If we look at, for example, port congestion, the transportation of goods or access to labour, these are very complex matters that involve numerous departments in order to resolve the issues. We really do need to have a multi-department collaboration involved in this case, and task somebody in a position of leadership who can make sure that everything is falling into place, that actions—as you point out—are undertaken and that we get resolution to this. It would be very important.

Recommendation 11

The Committee recommends that the Government of Canada, in collaboration with agriculture and agri-food stakeholders, the provinces and territories, and in respect of the competence of the latter:

• revisit the recommendations from the Canada Transportation Act Review in 2015 and develop a clear performance and evidence‑based National Supply Chain Strategy to ensure that supply chains are not vulnerable to labour disruptions, capacity constraints, or climate impacts, including natural disasters;
• name a supply chain commissioner or designate a minister with the responsibility of leading the industry-government task force to identify immediate solutions to address supply chain disruptions, notably those specific to containerized shipping.

Innovation, Sustainability and New Technologies

Automation to Reduce Reliance on Labour

To address long-term labour shortages and improve productivity in the sector, some have suggested that agri-food firms employ greater use of automation technologies. Witnesses were generally supportive of implementing automation and robotics to address worker vacancies where possible, but also stressed that technology alone would not solve this issue.

In its 2017 report, the Agri-Food Economic Strategy Table noted that the Canadian agri-food sector’s investments in machinery and equipment as a percentage of sales declined from 2.3% in 1998 to 1.2% in 2016. Similarly, the sector spends less on research and development (R&D) than its international competitors: while the Canadian agri-food sector spent 0.2% of its total sales on R&D in 2016, its French and American counterparts averaged 0.6%. Agri-Food and Agriculture Canada explains that, over the past 30 years, the Canadian food processing sector has experienced an average annual productivity growth of 0.2%, while Canadian manufacturing at large averaged 0.5%.^[39] Among other recommendations, the Strategy Table called on Canadian food processors to increase their capital expenditures per dollar of sales by 50% by 2025.

Mr. Thériault explained that while automation was “probably the best way” to address chronic labour shortages and would likely be more cost-efficient in the long term compared to hiring workers, implementing these technologies was capital-intensive and not within the financial means of all firms. Mr. Duval similarly noted that automation was an important, but “long and expensive” process. Ms. MacKinnon added that while such technologies were an integral part of her industry’s long-term labour strategy, they were expensive and that companies in her sector were in too volatile a situation to consider implementing them in the short-term:

It is difficult for those in our industry to consider robotics and innovation. They would like to be able to do so… because that would help to solve the labour problem. However, we cannot ask those companies to invest time and resources in research and innovation when, some days, they don’t even know whether they can get the production line in operation because they may not have enough employees to work a shift. Once the labour force is stable and secure, once there are no longer such dramatic highs and lows as those we have experienced in the last two years, we will be able to consider long-term solutions using robotics.

Witnesses also explained that automation cannot always replace manual labour. Mr. Al‑Katib elaborated that as processors invest in new technology that increase their productivity, labour would continue to be an issue for the sector. Mr. Duval similarly noted that robotics alone will not address worker shortages and that a “minimum level of labour” would have to be available. Some witnesses added that introducing technologies created a need for a different type of labour, as they require individuals with special technical skills to operate and maintain these systems. As Quinton Woods, the Chair of the Trade and Marketing Working Group of the Canadian Horticultural Council explained, automation in his sector has displaced labour needs into other areas:

There are lots of signs of innovation across the sector from coast to coast, whether it’s in the greenhouse industry in Leamington, Ontario or potato producers in P.E.I., Quebec or Ontario. There’s innovation through automation, camera grading systems and the reduction of labour resources, but those all come with extreme challenges, as they are new and up-and-coming production methods and technologies. We lack the expertise to maintain and service those systems, so it’s an ongoing struggle that now we’ve changed from manual labour processes to requiring engineers [and] industrial millwrights…[.]

New Technologies to Manage and Monitor the Supply Chain

Several witnesses noted that the supply chain faced a lack of real-time data, limiting the ability of participants to adjust their operations in the face of unforeseen externalities. Mr. Hemmes explained that Canadian data on container movements was very limited, with much of it becoming available only six months after containers left port, making it difficult to identify or assess disruptions in the supply chain until well after they have occurred.

In a brief submitted to the Committee, the CPMA calls for increased data gathering and transparency in cargo movements at ports. It cites the Port of Vancouver’s Blockchain project as an example of an innovation in this area that allows for increased traceability and monitoring of cargo throughout the supply chain.

Serge Buy, Chief Executive Officer of the Agri-Food Innovation Council, noted the importance of new technologies in helping the agri-food supply chain better adapt its logistics to unpredictable weather patterns. Describing the industry’s current logistics as reliant on outdated transport models, Mr. Buy explained that new technologies such as quantum computing could provide firms with alternative routes when faced with obstacles such as natural disasters. He noted that, in addition to barriers in securing initial funding for such technologies, their wide-scale implementation was hampered by a lack of broadband Internet access in rural communities.

Dr. Mussell also mentioned the importance of governments developing their own supply chain monitoring systems and metrics, expressing his view that current private sector mechanisms alone will not be sufficient in the face of “stark sudden adjustments from climate extremes” and other possible disruptions.

Recommendation 12

The Committee recommends that the Government of Canada work with provinces, territories, and industry to improve shipping container transparency, monitoring and specifically the capture and sharing of short-term data on container capacity movement and performance via transport truck and rail to ports and container ships, similar to the partnerships developed to monitor grain transportation, in order to enhance the competitiveness of the agriculture and agri-food supply chain.

Market Concentration and Competitiveness

Concentration in Maritime Transport

Several witnesses raised the topic of concentration in the maritime transport sector, explaining that ownership concentration in international shipping limits competition and stifles the ability of Canadian firms to expand their exports.

According to the International Transport Forum, shipping companies began entering into shared service agreements in the 1990s to expand their geographic range and improve service delivery by agreeing to provide scheduled service on trade routes.^[40] Over the same period, individual shipping lines have increased their market share, with the four largest companies accounting for 60% of the global container shipping market in 2018. As a result of this increased consolidation in the shipping industry, three large shipping alliances (2M, Ocean, and THE Alliance) control 80% of the worldwide container trade and hold 95% of the total capacity on East-West shipping lanes.^[41]

Witnesses explained that this global situation has important consequences for the Canadian agriculture and agri-food supply chain. Mr. Innes explained, for example, that one company controlled 70% of the container market share at the Port of Montreal, leaving agri-food exporters with few alternatives in the face of recent shipping container challenges.

Mr. Northey explained that the Shipping Conferences Exemption Act, 1987 exempts international shipping lines from some provisions of the Competition Act, leaving Canadian suppliers with limited options for recourse if faced with unfair practices. Mr. Northey noted that this was an issue of concern in many countries and that New Zealand had recently introduced a new competition regime for international shipping agreements. Mr. Northey recommended that the federal government repeal the Shipping Conferences Exemption Act, 1987 and make shipping lines subject to the Competition Act.

Mr. Northey and Mr. Innes each called for the Minister of Transport to use his power under Section 49 of the Canada Transportation Act to launch an inquiry into shipping containers to better understand the causes behind current disruptions in this sector and to inform Canadian efforts to better regulate this industry.

Recommendation 13

The Committee recommends that the Government of Canada examine the issue of concentration in the international shipping industry and take the necessary measures to ensure the availability of shipping containers at ports for agricultural products, such as an investigation under section 49 of the Canada Transportation Act. The Government of Canada should also review its legal regime for international shipping lines, notably their exemption from certain provisions of the Competition Act.

Grocery Code of Conduct

In 2021, as part of its report on Canada’s food processing capacity, the Committee adopted a recommendation that called on the federal government to work with provincial and territorial governments and private sector representatives to create a Code of Conduct for the grocery sector. Such a Code, the Committee held, would help improve transparency and fairness across the supply chain for producers, suppliers, retailers, and consumers. Several witnesses who appeared during this study are participating in the working group responsible for drafting the Code and explained that work is underway.^[42]

Several witnesses in this study emphasized the continued importance of such a Code, explaining that suppliers, faced with supply chain disruptions beyond their control, continue to face punitive fees from retailers. Ms. Ventin explained that a recent survey among her organization’s members found a 25% increase in supply chain fines issued by retailers. Ms. Ventin expressed her organization’s view that a “mandatory and enforceable” grocery code would provide producers and processors with a more balanced relationship with grocery retailers.

Recommendation 14

The Committee recommends that the Government of Canada ensure the joint working group concludes its efforts to create an effective Code of Conduct for the Canadian grocery sector that is mandatory, enforceable, and applied as consistently as possible across the country, while respecting provincial and territorial jurisdiction in this area.

Climate Change

Climate change was a recurring theme throughout this study, with witnesses noting the importance of adapting the supply chain and the infrastructure it relies upon to ensure its resilience in the face of a changing climate, notably a forecasted increase in natural disasters. Some witnesses also offered ways the sector could help mitigate climate change by reducing emissions associated with long supply chains.

Climate Mitigation

Regional Supply Chains

Katie Ward, President of the National Farmers Union, noted that having more local processing facilities throughout Canada, if combined with regenerative growing practices, would provide food system resilience, rural jobs, as well as climate mitigation and adaptation benefits. In its 2021 report on processing capacity, the Committee recommended that the federal government increase funding and other support for local food initiatives to fill gaps in traditional supply chains and to build redundancies in food systems. As the Committee noted in its previous report, improving options for local processing allows farmers to travel shorter distances to bring goods to market, thus limiting greenhouse gas emissions associated with these goods, and allows for greater local food security in the face of supply chain disruptions.

As the Committee also noted in its 2021 report, a notable example of market concentration is the Canadian beef supply chain. As Statistics Canada explains, three processing plants (a JBS plant in Brooks, Alberta, and Cargill plants in High River, Alberta and Guelph, Ontario) account for over 85% of Canada’s beef processing capacity. As the Committee heard during its processing capacity study, high concentration in beef processing can have significant supply chain consequences for producers and consumers if a single facility reduces its output or shuts down altogether, as Cargill plants in High River, Alberta^[43] and Guelph, Ontario^[44] did after COVID outbreaks in those facilities in 2020.

Mr. Thériault explained that consolidation, as seen in the beef industry, helps firms to achieve greater efficiencies of scale that allow them to better compete in international commodity markets. Mr. Thériault added, however, that there is room for “short circuits” in meat processing and other sectors, particularly to respond to an increase in consumer demand for locally produced food items.

Dr. Mussell agreed that smaller processing facilities could prove useful by adding capacity for producers and responding to niche market demands not met by larger companies. He cautioned, however, that this approach was not a “panacea” and came with trade-offs, including smaller firms experiencing “significant” losses in efficiency and facing difficulties in following relevant regulations and marketing themselves.

Among the challenges small and medium-sized processing firms face is interprovincial barriers to trade in agricultural and agri-food products. The Safe Food for Canadians Regulations require meat products intended for interprovincial or international sale to be processed in federally licenced facilities. In May 2020, the Canadian Food Inspection Agency (CFIA) announced a temporary Ministerial Exemption to this requirement to allow Canadian food wholesalers and retailers facing shortages of meat products to purchase them from provincially and territorially licenced processors in other jurisdictions. As several witnesses noted during the Committee’s study on Canada’s food processing capacity, discrepancies between provincial and federal standards can make it difficult for small and medium-sized processors operating provincially to “scale-up” and expand their operations to the national or international level, or even remain in operation.^[45]

Recommendation 15

The Committee recommends that the Government of Canada strengthen food security and mitigate the risks of long supply chains by supporting local food systems and encourage programming and specific funding in the next agricultural policy framework agreement with the provinces and territories (2023-2028) to diversify and strengthen regional food infrastructure and processing facilities, including small abattoirs to support existing supply chains. The federal government should also examine the streamlining of federal and provincial health and food safety standards and consider working toward a mutual recognition of such standards for processing facilities.

Climate Adaptation

Rural Infrastructure

In its 2018 report, Canada’s Economic Strategy Tables noted that investments in physical infrastructure are essential for both climate change mitigation and adaptation. Bob Lowe, President of the Canadian Cattlemen’s Association, explained the effects that climate change and natural disasters would have on rural infrastructure:

Investment in the transportation corridors to withstand extreme events is critical for long-term success. Roads, rail, ports, etc., need to be maintained and ready for the impacts of climate change with prevention—an example would be dikes—and redundancy—an example would be alternative routes—being key. Also, rural infrastructure needs to be prioritized and invested in significantly by the broader community, as it is the basis of much of Canada’s GDP. We recommend committing essential rural infrastructure investments, including but not limited to irrigation, roads, bridges, flood mitigation, and expanding on rural broadband Internet that is both reliable and affordable.

Mr. Lambert explained that what he called “climate change events” are one of the leading causes of supply chain disruptions in his sector and have become more frequent and inflicted more damage in recent years. Mr. Lambert asked for the federal government to provide producers with more funding to prepare for such events and to strengthen the infrastructure they rely upon to bring goods to market. Ms. Ward cautioned that the climate crisis will continue to disrupt production and infrastructure. She cited the examples of the 2021 drought in the Prairie provinces and the recent floods in British Columbia and the Atlantic as signals that “adaptation is no longer optional.”

Mr. Al-Katib highlighted the importance of expanding digital infrastructure in rural Canada, calling the agricultural sector’s ability to access digital broadband “critical for the growth of our economy.” As previously mentioned, Mr. Buy of the Agri-Food Innovation Council highlighted the lack of broadband Internet access in rural regions as an obstacle to food producers and processors adopting innovative technologies.

Recommendation 16

The Committee recommends that the Government of Canada help agriculture and agri-food supply chain participants located in rural communities adapt to an expected increase in climate change-related extreme-weather events through investments in critical infrastructure including, but not limited to, irrigation, roads, bridges, flood mitigation and the expansion of reliable and affordable access to rural broadband and cell phone coverage in cooperation with provincial and territorial governments.

Supporting Innovation

Mr. Al-Katib explained that increasing volatility in weather patterns and its effect on infrastructure and growing conditions reinforces the need for long-term planning. He noted that the Canadian crop could expand significantly over the coming years, requiring greater capacity in infrastructure. Chris Davison, Vice-President of Stakeholder and Industry Relations at the Canola Council of Canada, noted the importance of investments in crop research to ensure that canola and other products can better withstand climate change and other production challenges.

Mr. Buy called for Canada to invest in crop innovations such as vertical farming, with a focus on growing products, such as fruits and vegetables, that it typically imports from other countries. He explained that improving self-sufficiency in these foods would help Canadians to maintain healthy diets in the face of future supply chain disruptions. Mr. Buy encouraged the federal government to adopt a more “proactive” approach to such innovative possibilities.

Recommendation 17

The Committee recommends that the Government of Canada, when addressing challenges to the agriculture and agri-food supply chain, give particular attention to reducing its environmental impact and strengthening its climate resilience.

Conclusion

Over the course of the study, the Committee heard from witnesses who reiterated their confidence in the robustness of the Canadian food supply chain, while also highlighting its vulnerabilities. They called on the federal government to provide immediate support to address the current disruptions and to put in place tools that will strengthen its resilience for years to come. Labour shortages emerged once again as one of the main concerns raised by stakeholders and will require immediate actions, such as improving the Temporary Foreign Worker Program as well as a long-term strategy to allow the sector to adapt to an evolving workforce, including helping firms innovate to address these challenges. Similarly, transportation issues require rapid action to address container shortages and port delays, but also long-term solutions to make transportation infrastructure resilient to future challenges, notably climate change, and to make sure Canada’s transport sector remains competitive and that infrastructure is properly maintained.