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Agri-food sector gets nod from key federal panel

The federal Advisory Council on Economic Growth has tipped agriculture and food as an important opportunity

The agri-food sector could add even more to Canada’s economic growth with a concerted public-private effort.

The agri-food sector has received a big-league endorsement from the federal Advisory Council on Economic Growth.

The group gives policy direction to federal Finance Minister Bill Morneau.

In a report that will receive plenty of attention around the cabinet table, agri-food is identified as one of eight sectors “where Canada has a strong endowment, untapped potential, and significant global growth prospects.”

  • Read more: Farm leaders welcome high-profile panel’s praise

To encourage those sectors to grow to boost the national economy, the government should “take a focused approach that removes barriers and galvanizes the sector around a bold growth agenda,” the council said.

The praise of agri-food’s potential is a perfect setup for Canada’s Agriculture Day on Feb. 16, when the farm community will tell its story to politicians, policy-makers and the public.

Other sectors also identified include:

  • Energy and renewables,
  • Mining and metals,
  • Health care and life sciences,
  • Advanced manufacturing,
  • Financial services,
  • Tourism, and
  • Education.

The report says these are all sectors where the government can and should team up with the private sector and make a concerted push to unleash their full potential.

“Such a partnership would help raise our collective ambition and unleash Canada’s real and inclusive growth potential,” the report reads.

“The Canadian ag-food sector has great potential, given the large natural endowment of water and arable land, distinctive record of accomplishments in research, and exceptional base of companies and entrepreneurs,” the council wrote. “This sector also has exposure to favourable global market trends including demand from fast-growing Asian economies where protein consumption is on the rise.”

Combining these assets with a strategy to remove obstacles would provide a blueprint for other sectors, the council said.

The federal government should “launch an agri-food pilot by convening private and public sector stakeholders, identifying major obstacles to growth, setting an aspiration (a vision and quantified goals), and recommending concrete actions,” the council wrote.

A winning strategy to unlock the growth potential of the agri-food sector could be “replicated in at least three other sectors over the next three years, and then up to five to seven sectors over time,” it adds.

The council recommended a tool kit to leverage growth that includes a federal infrastructure bank, a foreign direct investment agency, and a method for catalyzing innovation marketplaces.

The report also said the recommendations would need to be refined with the help of the agri-food sector itself and noted the sector already employs 2.1 million Canadians and accounts for 6.7 per cent of GDP, with “lots of potential for growth.” Canada ranks fifth in agriculture exports and 11th in agri-food exports — behind smaller countries like Holland and less economically advanced countries like Brazil in both categories.

“Enabling the sector to move up to second place in agriculture and to fifth place in agri-food would imply an additional US$30 billion in exports in today’s distribution of global export shares, equivalent to nearly two per cent of current GDP,” the report reads.

Boosting agri-food and the other sectors would create economic growth that benefits the entire economy and create resilient jobs, the council said.

The government and agriculture leaders need to take clear policy actions to overcome them, galvanize the sector around a growth agenda, and track its progress “to ensure the policy actions have supported economic activity within the sector.”

“Undertaking these tasks well requires a deeper level of collaboration between business and government than has historically been the case,” the council points out. “The private sector must play a central role in defining what obstacles to remove to help the sector grow and to compete globally.

“The need for a focused, sector approach to economic development is particularly acute for Canada,” it continues. “Although our economy is advanced, it is small in absolute terms, and particularly small relative to the United States. Achieving global scale and competitiveness requires clearing the path to growth in our most promising sectors.”

The council says government and the private sector can collaborate on removing obstacle barriers to growth “through well-designed policy actions. The private sector’s involvement is necessary because it is best placed to identify the genuine obstacles to growth within any specific sector. The government’s involvement is equally necessary as it is best placed to determine that removing a particular barrier is genuinely in the public interest.”

While well-designed environmental or labour regulations have their role, government and the private sector can identify those that are more hindrance than help. “Details within each sector need to be carefully examined.”

Many other countries have adopted this approach, the council said.

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