While the federal government wants the agrifood sector to boost exports to $75 billion, its policies create major roadblocks to reaching that goal, says Chris White, President and CEO of the Canadian Meat Council.
The federal Temporary Foreign Worker program inhibits the meat industry from finding enough workers to keep their plants running while they are subject to more onerous regulations than their American competitors, he told the Senate agriculture committee.
The committee has launched a study on how the Canadian value-added food sector could be more competitive internationally. A wide swath of agrifood groups are expected to present to the Senators.
“Right now, many of the packing plants in Canada are not at full capacity, because they just can’t get the workers,” he said. While the agriculture and trade ministers are supportive, the departments that control foreign workers “have other concerns.
“The frustration in the industry is that you’ve got $75 billion target for the agricultural sector, but you’ve got industry that can’t even, on a day-to-day basis, provide the maximum that it could if it had all the workers that it needs,” he said.
Meanwhile the Canadian industry is supposed to compete with American companies that have seen “the eradication of a lot of their regulations and the tax cut,” he said. “This is the concern that we have as an industry, and if you look at plants in some of the rural ridings close proximity to the U.S. border, what’s the incentive to stay in Canada? We have more regulations. We have a higher tax rate and we can’t get workers.”
Meat plants close to the American border are vulnerable to being closed, White said. “If I’m a Canadian packing plant and I look at my margins, and then I look at some of the challenges that I have, what’s the incentive to stay on the Canadian side versus closing the plant, going 100 miles across the border where I know they might give me an incentive to relocate? And once I’m there, I don’t have the workforce challenges I might face in Canada. I don’t have the regulatory burden we have in Canada and the tax rate is lower. Those are the challenges.”
John Masswohl, Director of Government and International Relations with the Canadian Cattlemen’s Association, said beef exports last year reached nearly 380,000 tonnes with a value of $2.41 billion, the best year ever for the industry.
The United States took 74 per cent of Canadian beef exports, China and Hong Kong together about 8 per cent, Japan 7 per cent, Mexico 4.5 per cent, and South Korea 1.2 per cent. Taiwan and the Philippines were next.
“There are more opportunities out there,” he said. One is building demand for Canadian beef under the free trade deal with Europe. Beef shipped to Europe has to be raised differently but “it looks like the returns are there.”
While keeping access to the American market is a top priority, “the CPTPP agreement is going to be a huge opportunity for us to get a tariff advantage, especially while the United States is not in that deal,” he said.
The CPTPP could increase Canadian meat exports, he said. “That is more value adding and more job creation in the Canadian market. That is what these trade agreements bring to us.”
Cattle producers also have a labour shortage problem like processers, he said. Despite non-stop recruiting efforts, “we just cannot get enough people. We absolutely have to have a labour strategy. We have presented labour strategies in the past. The Temporary Foreign Worker Program or a foreign worker program has to be an integral piece of that, and we very much support those programs.”
“Something is fundamentally not working” on the foreign worker issue, White said. “This is close to a two decades-old problem. When you look at it from the perspective of what is good for the Canadian economy, we need these plants because not only is it a question of bringing foreign workers in, but if you don’t bring these foreign workers in and you don’t give them a path to permanency, the flip side is that you have the potential of losing these plants.”
Last fall the government was planning to implement a series of pilot projects to deal with the foreign worker problem in the agrifood and fisheries sectors, he said. “Then about three or four weeks ago, we were told by government that is no longer on the table.”
While the government is ducking the issue, it won’t say how industry is supposed to ramp up production when it can’t get enough workers, he said. Meanwhile it is losing competitively with American companies.
They don’t have worker shortages and have a lighter regulatory burden on their operations, he said. “It would be really beneficial, as we move forward in the process, if government tried to either marry or mimic what the Americans are doing. For every one regulation you want to introduce, you need to take out two regulations. Have something like that in mind because when we’re competing against the Americans, and when they’re looking to export their product, it is so much easier for them.”
Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He’s also the author of two science fiction novels with more in the works.