ELECTION 2021Policy Priorities

Canada’s dairy processors produce the cheese, yogurt, butter, and milk that have becomestaples of the Canadian diet and the ice cream we crave when we want a sweet treat. Ourindustry works hard every day to deliver products that meet Canada’s stringent food safetystandards and exceed the expectations of our customers.

But we don’t just create products, we create good jobs and make significant contributions toCanada’s economy.

Canada’s dairy processors employ more than 24,500 Canadians in over 470 facilities across thecountry. As the second-largest manufacturing industry in Canada, dairy processing supports theproduction of more than 10,000 Canadian dairy farms and contributes more than $16 billionannually to Canada’s GDP.

Increasingly Canadians want Canadian-made products and almost all (82%) expect ourgovernment to play a role in strengthening Canada’s domestic food supply chain. This is onlypossible through commitments to create the conditions which allow Canada’s farmers andprocessors to grow and thrive. To encourage the necessary innovation and investment inCanada's dairy processing industry, this includes:

Finalizing programs and rolling out $292.5 million in compensation for processors undersupply management impacted by CETA and CPTPP agreements announced in the 2021federal budget.

Providing compensation for dairy processors impacted by dairy market access provided tothe United States via the CUSMA agreement.

Ensuring that concessions on dairy market access are not part of future free tradeagreements.

Recognizing dairy processors’ expertise and knowledge in importing the kinds of productsthat will complement Canadian-made products and provide Canadians with more productoptions through the allocation of the vast majority of import licenses (tariff-rate quota).

Addressing unfair practices of Canada’s largest retailers through the development of aGrocery Code of Conduct.

Investing in programs and funds to improve efficiency, support the development of cleantechnologies, and increase adoption of renewable energy both on farms and in foodmanufacturing facilities.

Establishing, in consultation with the provinces, a national program to address plastic waste.

Developing a strategy to address the persistent labour shortages in Canada's agricultureand agri-food sectors.

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Political parties have stated their commitments to Canada’s supplymanagement system. But the system is only viable when both its farmingand processing industries are healthy. Ensuring a future with domesticprocessing capacity is not only an investment in Canada’s dairy processors,but in our farmers as well.

However, the market uncertainty created by recent trade agreements likeCETA, CPTPP and CUSMA has slowed investment and growth in Canada’sdairy processing industry. Combined, these agreements provided Canada’strading partners over 10% access to the country’s domestic dairy market,which will result in close to $300 million in annual losses for dairyprocessors at full implementation.

While the real GDP of the wider food manufacturing sector has grown by16.2% in the past seven years, the dairy processing industry has seen its realGDP shrinking by 1%. Addressing the impacts of CETA, CPTPP and CUSMAdairy market access concessions is necessary to strengthen domesticprocessing capacity and ensure the long-term viability of Canada’s supplymanagement system.

Addressing theimpacts of tradeagreements

Priorities

Finalizing the terms of the $292.5 million Processor Investment Fundannounced in the 2021 federal budget to compensate dairy, poultry,and egg processors impacted by the CETA and CPTPP agreements.

Providing compensation for dairy processors impacted by dairy marketaccess provided to the United States via the CUSMA agreement.

Recognizing dairy processors’ expertise and knowledge in importingthe kinds of products that will complement Canadian-made productsand provide Canadians with more product options through theallocation of the vast majority of import licenses (tariff-rate quota).

Ensuring that concessions on dairy market access are not part of futurefree trade agreements.

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Currently in Canada, five large retailers control over 80% of the groceryretail market. In comparison, the largest food processor controls no morethan 3% of any given retailer’s volume. This level of concentration inCanada’s grocery retail market has created a situation whereby retailerscan unilaterally dictate the terms of business.

It is estimated that the fees, deductions and administrative costs requiredto simply get products onto shelves has grown at twice the rate of salesover the past five years. These arbitrary fees and deductions paid to largegrocers represent money that is not reinvested in facilities, productinnovations or creating new jobs. While this impacts all Canadian foodprocessing sectors, it is particularly acute for dairy processors as it onlyexacerbates the issues stemming from CETA, CPTPP and CUSMA.

The experiences of other countries who have dealt with similar issuesprovide clear evidence that a Grocery Code of Conduct that is mandatory,legislated and enforceable is the best way forward. Where implemented,legislated codes have helped to create a balanced and competitive groceryretail environment that benefits everyone in the food supply chain, fromfarm to consumer.

Fairness is a Canadian value. So, it comes as no surprise that 87% of Canadianssaid that they would support the Canadian government playing at least somerole in ensuring these companies are treating suppliers and consumers fairly.The work toward addressing this issue has begun with the Federal-Provincial-Territorial (FPT) Working Group, but strong federal support is needed.

Restoring fairness inCanada’s food supplychain

Priority

Address unfair practices of Canada’s largest retailers through thedevelopment of a Grocery Code of Conduct.

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Canada’s agri-food sectors know that they have an important role to play increating a more sustainable future. Taking steps to reduce waste andimprove efficiency is not only good for the environment, it also improvesthe competitiveness of Canada’s agri-food businesses. As governmentlooks to accelerate the adoption of clean technology and adoption ofrenewable energy resources, Canada’s agricultural and agri-food sectorsmust not be overlooked.

Strong federal leadership is needed to accelerate agri-food’s adoption ofgreener practices, as well as its efforts to improve efficiencies and reducewaste. A key way in which this can be achieved is by ensuring thatrevenues raised through carbon taxation of the agri-food sector arereturned to the sector. By earmarking this revenue for programs and taxcredits, the federal government can encourage investments in the types ofclean technologies needed to create a more sustainable future for Canada’sagri-food sectors.

To further reduce the carbon footprint of Canada’s agri-food sectors,federal leadership is needed to bring provincial and sector leaders togetherto complete the work previously started on national strategies andprograms to reduce plastic waste.

Building a sustainableCanadian agri-foodsector

Priorities

Investing in programs and funds to improve efficiency, support thedevelopment of clean technologies, and increase adoption ofrenewable energy both on farms and in food manufacturing facilities.

Establishing, in consultation with the provinces, a national program toaddress plastic waste.

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A 2020 survey by Food Processing Skills Canada suggested that 70% of foodand beverage companies in Canada are experiencing at least somechallenges, recruiting and/or retaining qualified workers. A strategy thataddresses persistent labour shortages in agriculture and agri-food sectorswill not only create jobs in rural Canada, but ensure that our country hasthe capacity to grow and process food domestically now and in the future.

Investing in Canada’sagri-food workforce

Priority

Addressing the persistent labour shortages in agriculture and agri-food sectors.

References

Abacus Data (2020). Testing appetite for a grocery code of conduct. Conductedon behalf of the Dairy Processors Association of Canada during the week ofSeptember 23-29, 2020.Statistics Canada. “Increase in real GDP from 2013 to 2020 (Frequency:Monthly).” Table: 36-10-0434-01. Retrieved fromhttps://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610043401 Food Processing Skills Canada (2020). 2020 Labour Market Information Survey.Available: https://fpsc-ctac.com/wp-content/uploads/2021/01/2020-LABOUR-MARKET-INFORMATION-SURVEY.pdf

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Canada's Dairy ProcessingIndustry

24,500Canadians directly employed in the dairyprocessing sector

471Dairy processing facilities across the country

10,000Canadian dairy farms supported

$16 BillionContributed to the national GDP by Canada's dairysector

9.2 BillionLitres of Canadian milk processed in 2020

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