A senior Maple Leaf Foods official says Canadian policies, programs and regulations are hurting economic growth and competitiveness.
Rory McAlpine, senior vice-president of government and industry relations, made the remarks during a speech at the Canadian Agricultural Economics Society policy summit held in Ottawa Jan. 23-24. The remarks came during a panel discussion on enhancing Canada’s agri-food competitiveness.
McAlpine argued investing in technology for manufacturing or packaging — such as those being made as part of the company’s chicken-processing facility being built in London, Ont. — are costly and require, “global-scale operations and market share to achieve the revenues and manage the expense.”
He suggested doing so is, “simply more challenging,” due to Canada’s size, small population, construction costs and a, “history of economic policies and provincial attitudes that serve to limit or equalize scale, thus constraining labour productivity and competitiveness.”
McAlpine told the audience the regulatory environment in Canada is, “grossly uncompetitive,” citing uncompetitive labour laws, payroll taxes in certain provinces, utility costs, infrastructure bottlenecks and complex municipal zoning and permitting processes. He argued that these contribute to an impaired performance for manufacturers of value-added packaged goods.
“Higher environmental requirements and now carbon pricing,” were also mentioned.
Maple Leaf Foods is spending a combined $1 billion of capital spending on its London, Ont. facility and a plant-based foods facility in Shelbyville, Indiana.
McAlpine noted construction costs are 20 to 25 per cent higher in Canada due to factors like land costs, labour rates, climate-related building standards and market concentration in the supply of key building materials like cement and steel.
He said U.S. jurisdictions are, “more than willing to open their subsidy and tax wallets for large capital projects,” while in Canada, “governments are strongly biased in favour of ‘foreign companies’ and ‘dazzling, disruptive innovation’ instead of investment by Canadian companies in ‘scale plants’ and ‘applied technologies.’”
McAlpine argued addressing this is the first priority for food manufacturers and, if not addressed, companies will go south of the border, “with the help of very generous state subsidies.”
The Shelbyville plant is being supported by nearly US$50 million in government and utility incentives, including $9.6 million for startup costs and US$40 million in operational support over the next decade.
The London-based plant is receiving roughly US$40 million in support from the Ontario and federal governments.
He concluded his remarks by taking aim at Health Canada, saying it needs to “stop treating the food industry like the enemy of healthy eating and work with us to tackle the problem of poor dietary choices.”