The Prairie provinces already have an encouraging start. Developing a fractionation hub next to our existing multibillion-dollar pea, lentil and bean industries will cut shipping costs and turn what was once a competitive disadvantage — distance from market — into an advantage.

Already, millions of new investment dollars in fractionation facilities have been earmarked across the Prairies. But competitors in Europe and the U.S. are also starting to realize that the opportunity is huge — and will only grow in the future.

The global market for specialty food ingredients, such as pea protein, is about US$100 billion annually and growing. The greatest annual growth in the ingredient sector is from plant proteins, including pulses. While there are more than 34,000 food and beverage product manufacturing establishments in Canada and the U.S., only a minority incorporate pulse ingredients into their production.

The opportunity for expansion in the North American market alone is enormous, with pulses processed on the Prairies ideally located close to both the pulse producers and the customers — food product manufacturers.

In North America, the EU and even China, the health and nutrition food sectors are key markets for ingredients derived from pulses, such as protein and fibre. Pea protein, for example, is used in granola and energy bars, high-protein pasta, baby food, veggie burgers, egg alternatives and even beverages and smoothies.

Pulses have a higher concentration of protein than cereal crops and rice and can be used as ingredients to achieve gluten-free status. Pulse fractions are useful in non-niche food processing, too — fractions stabilize viscosity in sauces and dressings, add crispiness in breaded products by reducing oil absorption and retain moisture in meat products.

In addition to human food, protein fractions are used in pet and animal feed, and the global pet food industry, already valued at nearly US$50 billion, is growing more than five per cent annually.

The three Prairie provinces share characteristics that make them attractive locations for fractionation. They are the heart of Canadian pulse production; all lentil and chickpea crops seeded in Canada are in the west, as is 98 per cent of dry peas and more than 50 per cent of beans.

Transportation infrastructure to move processed pulses along the supply chain impacts investment. Manitoba and Saskatchewan’s inland ports are attractive, as are Edmonton and Calgary’s freight transportation hubs. Our rail and road links to West Coast ports and into the U.S. ensure pulse fractions can be shipped to key international markets.

Thanks to the oil downturn, the Prairies have an available supply of technically skilled workers, especially in Alberta and Saskatchewan.

Governments do not need to initiate new spending to increase fractionation; rather, some policy changes at all levels can reduce the challenges that affect investment. For example, provinces or municipalities may need to review axle weight restrictions on roads that would serve as key transportation routes to and from fractionation facilities.

Operating costs, including labour and electricity, play a large role in investment decisions. French plant-based ingredient company Roquette specifically made note of sustainable hydroelectricity availability in its announcement earlier this year of a $400-million pea-protein facility in Portage la Prairie. Portage was chosen out of 40 sites under consideration in Canada and the U.S.

As Alberta and Saskatchewan rapidly move away from the cheapest source of electricity (coal) to a greater volume of more expensive renewables, they must consider how changes in electricity policy affect future investments in other sectors such as agri-food processing. The federal government also helps by negotiating tariff reductions with key markets, as tariffs are often higher on processed products than on raw commodities.

In the past year, plans for new fractionation facilities have been announced in Bowden, Alta., Moose Jaw, Sask., and Portage la Prairie. But we should not be satisfied with this alone. Governments at all levels should make sure their policies are not impeding further investment in fractionation facilities. The opportunity for the Prairies to be a global leader in pulse production, exportation and processing is waiting to be seized.

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This is critical information for the Canadian government and Canadians themselves to understand as the country prepares for NAFTA negotiations where special interests will be spending massively to demonstrate public support for their particular ‘ask’ at the negotiating table.

In the scheme of global trade, the future of Canada’s dairy industry may seem a small issue. But given Canada’s $2-billion-a-day dependence on the U.S. for trade, and the importance of NAFTA to all Canadians, fighting over the wrong bargaining chip would have severe negative repercussions.

Recent polling by NRG Research Group and the Canada West Foundation shows that the Canadian public understands this. Not surprisingly, given historic polling data, the majority of Canadians polled support the country’s dairy price support system and are willing to pay more for milk.

But when this support is placed in the context of upcoming high-stakes NAFTA negotiations, Canadians are ready to put supply management on the table to see what can be gained in exchange.

Recent news reports have made it clear to Canadians what is at stake. Both the U.S. Congress and the Trump administration have identified opening Canada’s dairy and poultry industries as a top NAFTA renegotiation priority. The Americans will be entering the NAFTA talks loaded for bear — or in this case, cow.

Long before President Trump’s infamous Wisconsin dairy farm stop, Canada’s supply management system had been a cross-border irritant with state and federal politicians of the left, right and centre in the U.S. In fact, resentment of Canadian supply management is probably the only issue on which Bernie Sanders, Donald Trump, Paul Ryan and California Governor Jerry Brown could all agree.

So it’s no surprise that dairy is going to be a top issue in NAFTA negotiations.

This would seem to be a problem for any Canadian government, given polling consistently showing strong public support for Canada’s dairy-processing industry and quota and price support system. It’s not, actually.

In our polling, just under half of respondents (44 per cent) favoured abolishing the current system in exchange for cheaper milk, while just over half (56 per cent) initially favoured keeping the current system with its higher prices.

Then came the NAFTA factor. After being reminded that supply management is at the top of the Americans’ trade irritants list, a majority of Canadians (67 per cent of all respondents) were open to making concessions, while only 18 per cent favoured defending the current system at any cost.

Of the majority that favoured making concessions, 36 per cent favoured entering NAFTA negotiations with dairy “on offer up front” to see what the Americans would offer in return, while 22 per cent suggested waiting for the Americans to bring it up and then seeing what can be gained.

Nine per cent of respondents even offered to end supply management before negotiations begin.

These numbers should weigh heavily on Canadian negotiators and politicians before they start pushing chips across the NAFTA negotiating table.

The nuances in Canadian opinion toward the hot-button issue of supply management illustrates the value of approaching complex public policy issues with methodologically sound public opinion research — polling that goes beyond the immediate impact of splashy advertising campaigns and digs into the nitty-gritty of the issues.

For Canadians and the federal government, it’s not a black and white choice between supply management and no supply management. General support/oppose numbers on this topic do not reveal the true picture of Canadians’ opinion and aren’t helpful to the government as it considers its position on supply management.

Canadians’ opinions on dairy industry supply management only truly come through when people are asked questions that consider the context — and the consequences — of things that affect us all, like actual trade negotiations.

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