As productivity stalls, report warns food industry is an important part of Canada's security

At a time when national security is a growing concern in Canada, the country’s food and beverage manufacturing industry is urging that food security be a part of that strategy.

According to a new report produced by the Canadian Agri-Food Policy Institute for Food and Beverage Canada, Canada has a major economic opportunity in food and beverage manufacturing.

Increasing supports and investments for the industry, said the report, will enhance Canada’s self-reliance as a nation and help global food security.

The report, titled A Business Case for Expanding Food and Beverage Manufacturing in Canada, said Canada has the potential to grow the $35.1 billion in gross domestic product (GDP) the industry generated in 2025 to $75.1 billion in potential cumulative GDP by 2035.

Canada’s food and beverage manufacturing industry is already the country’s largest manufacturing sector, with more than 9,000 establishments across the country generating around $188 billion in annual revenues and supporting more than 318,000 direct jobs.

But productivity has stalled, the report warned.

“Labour productivity in food manufacturing grew by 1.4 per cent annually between 2011 and 2018 but was essentially flat between 2019 and 2025,” it stated. “At the same time, manufacturers faced rising costs, trade uncertainty and increasing pressure to invest, automate and improve productivity.”

The federal government’s National Food Security Strategy has established a target of 2.75 per cent annual food-processing GDP growth between 2027 and 2035. It has committed $3.2 billion over 10 years to strengthen domestic food production, improve affordability, increase value-added production capacity and to build a more resilient food system.

But there are bigger opportunities, according to the report.

“These commitments represent an important step, but their success will depend on translating this renewed attention into investment and expanded manufacturing capacity,” the document stated.

The report listed five priorities Canada should have for the industry. These include:

• Invest: Leverage private capital to support automation, expansion and new manufacturing capacity.
• Modernize: Recognize automation, robotics, digitalization and incremental technology adoption as critical forms of innovation in food and beverage manufacturing and ensure federal programs support these investments.
• Regulate smarter: Protect public and food-safety objectives while reducing unnecessary duplication, delay and non-value-added regulatory burden.
• Build the workforce: Align immigration, training and workforce policy with the industry’s long-term labour and skills requirements.
• Compete: Address the structural costs that affect the ability of Canadian manufacturers to compete at home and abroad.

Mike Bannister, the president and chief executive officer of Country Ribbon Inc. in St. John’s, NL, and co-chairperson of Food and Beverage Canada, said nowhere in the country is the importance of food security more at the forefront than Newfoundland and Labrador.

“Most people are aware of what happens when there are problems getting a finished product over to Newfoundland,” he said in an interview with Postmedia on Wednesday. “It does put the province at risk.”

While it is especially true for Newfoundland and Labrador, Bannister said the report is asking for streamlined investment in the industry, a more predictable regulatory environment and ensuring sure there’s a skilled and stable workforce, and more competitive conditions for manufacturing are all bang on.

He figured there are only a couple hundred food and beverage manufacturers in Newfoundland and Labrador, and there should be more, especially those that are producing the food they process for the market.

“I think the importance is really for the governments, starting at the federal level and all the way down to the municipalities, to make sure that they are in the business of making it easier for people to set up food and beverage manufacturing facilities or expand existing facilities here in the province,” said Bannister.

He said the federal government fund is a great start, but he wonders how accessible that money will be for the small- and medium-sized businesses that make up the majority of the sector and which may not have the same cachet as some larger operations might.

“An awful lot of the food and beverage manufacturers from coast to coast are owner-operators that have had an idea their mom had a great recipe and they wanted to share it, they start a business and then it scales,” said Bannister.

“I believe what we need to do is we need to get government being more open to helping them grow, rather than maybe finding ways to slow them down.”

As an employer who needs around 400 workers, Bannister knows how challenging it can be to find enough staff to operate a food manufacturing business. Changes to Canadian immigration policies have not helped that since many employees in the industry are temporary foreign workers or new Canadians on their path to landing permanent residency.

A recent report by Food Processing Skills Canada revealed that Canada’s food and beverage manufacturers will need more than 170,000 new employees over the next eight years.

Newfoundland and Labrador has the direst need in the country, according to that report, having to find an estimated 4,950 new workers by 2034 — the equivalent of 76.2 per cent of the current workforce in the province’s food and beverage manufacturing sector.

With the majority of Country Ribbon’s workforce above the age of 50 and around 20 per cent of his employees being Ukrainian refugees, that report resonated with Bannister.

“Without them, I’m not sure where we would be, to be honest,” he said of the immigrant component of his staff.

“Not a lot of young people are coming up to replace the older people retiring. The other side of it is this generation doesn’t value factory work as much as my generation would have. So, even of the people that are here, it’s harder to attract people to come work on a plant floor in order to support their families.”

To that end, Bannister believes government needs to have more clarity on immigration policies so employers can better plan their respective human resources strategies.

Technology can also help alleviate the workforce issues, but Bannister insisted automation doesn’t mean fewer workers.

“I want to be clear: We can load up our plant with automation and not an employee will lose their job,” he said.

“What it will do is help protect us so that we don’t have a problem when we have a large number of retirees. I think that’s where we need to go to protect the industry. We need to be able to find that right balance of automation so that jobs that are easier to automate can be done and that there’s an easy way to subsidize and write off those costs.”

Kristina Farrell, Food and Beverage Canada’s chief executive officer, said the industry doesn’t get treated like the integral part of Canada’s industrial economy that it is.

“We actually generate more GDP than automotive assembly, automotive parts and aerospace manufacturing combined,” Farrell said in an interview.

“We have such significant growth potential and we feel that Canada has to be able to compete for that investment. So, we really try to prioritize showcasing what the economic significance of the industry is to Canada and what the opportunity is available to us, especially as there is this renewed focus on linking food security to national security as well as the National Food Security Strategy.”

The themes put forward by the report are not new advocacies for the industry, noted Farrell, but the report does emphasize the fact that Food and Beverage Canada’s members from across the country continue to ask that manufacturers be the priority when decision makers develop programs and policies that affect the industry.

“They will be using it in their own provincial advocacy, which I think is incredibly helpful because a lot of the things that we’re asking for have the dual responsibility of both the federal and the provincial government,” explained Farrell.

“I think workforce strategy, as well as immigration, is a good example of that. But even around themes like investment, making sure that when the government puts forward a program or a fund for food and beverage manufacturers to take advantage of, that it’s developed in a way that actually meets the needs of manufacturers.”

As for the workforce, Farrell noted that while some manufacturers operate seasonally and can get by with temporary foreign workers to fill staffing gaps, some are year-round operations that often depend on immigrants looking to remain in Canada as permanent contributing citizens.

The availability of foreign workers dropped when Immigration, Refugees and Citizenship Canada permanently closed the Canada Agri-Food Pilot program to new applications in May 2025. The program offered a pathway to permanent residency for experienced, non-seasonal workers in specific agriculture and food processing industries.

“I recognize the federal government’s emphasis on high-skilled workers and attracting that type of immigration, but we do need to pay attention to the workforce needs of those companies who are making our food and beverage,” said Farrell.

She also has hope that there can be renewed interest among the younger generation and underrepresented groups of Canadians about careers in the food and beverage manufacturing industry.

“There’s a lot of automation and robotics taking place, which I think will attract young people,” said Farrell.

She noted that investment in new technology, especially when it comes to upgrading older plants, is expensive and not a cost easily absorbed by some companies.

“There are some tasks that it makes sense to automate, so we can upskill people at those workforces into different jobs,” she said. “But a lot of the tasks in food and beverage manufacturing, especially from a food safety perspective, or if you’re dealing with live animals, we’ll always need people working in our plants.”

With the report and its recommendations now released, Farrell is looking forward to the federal budget coming down on Nov. 5 and seeing if it holds anything that can help Canada’s food and beverage industry take more strides to achieve the potential the document envisions.

“Canada has an enormous opportunity to grow its largest manufacturing industry, but that growth won’t happen automatically,” she said.

“We need governments — at the federal and also the provincial level — to create the conditions that make manufacturers choose to invest, modernize and expand here.

“So, I’m hopeful that we’ll see some good news in the federal budget, but also as we continue to see the different measures that will help implement the National Food Security Strategy.”