A Message from Frank Hart, Interim CEO | Transforming Canada

It’s been three months since I stepped into the role of Interim CEO at Protein Industries Canada. Since then, I have dedicated most of my time to determining how Protein Industries Canada can build an enduring organization that will play a key role in advancing the development of value-added growth for Canada’s strong agriculture industry—particularly as we work to implement "The Road to $25 Billion”.

By adding value to Canada’s agricultural commodities by processing more of our crops here at home, we can make a material contribution to addressing one of Canada’s greatest challenges—increasing our productivity and GDP. More so, Protein Industries Canada can be a big part of the solution to making this happen.

Canada’s declining productivity rate has dominated both business and political headlines for the past year or more. There is a real urgency to do something. We know that Canada’s declining productivity growth can be attributed to:

• a slowing rate of innovation within Canadian businesses;
• Insufficient diffusion of innovation across Canadian firms; and
• A decline in productivity-enhancing investments by Canadian firms combined with less business dynamism overall.

As a country we also need to foster the growth of globally competitive companies—especially in sectors where Canada has the ability be a very strong global competitor—to ‘punch above our weight class’ as the saying goes. Our analysis shows that one of those industries is ingredient manufacturing and food production—derived from, and based upon, a strong and diverse base of Canadian agriculture commodities.

Canada’s agriculture, food and beverage industries have already proven it must be considered a key contributor. It has been one of our best-performing sectors in terms of productivity growth. Productivity in these industries in Canada increased by 2.4 per cent between 2019 and 2020—a growth rate of 1.5 times that of the overall average of recent labour productivity growth in Canada.

Expanding Canada’s value-added industry through increased food and agriculture production would bring significant economic benefits to Canadians—much of it to smaller communities and rural areas in Canada. Doing so would have the added benefit of contributing to a safer, more secure world by addressing the growing problem of food insecurity across much of the world. The growing global population—some 10 billion people by 2050—combined with fragile supply chains and unstable weather patterns is making food insecurity a very real problem for much of our world. Canada can play a unique role in reducing global food insecurity by helping to feed an increasingly hungry world. Because a hungry world is often an angry world, more food production from Canada would play an important role in enhancing world peace.

This represents a generational opportunity for Canada. By championing more value-added processing of our domestic crops—the manufacturing, marketing and selling of the components of the seed, like starch, oil, fibre and protein—we can create more economic growth for the country and help reverse one of Canada’s current and most challenging economic trends. By entering global value chains with high-value products, we can not only: a) improve Canada’s productivity, but also b) enhance Canada’s role and stature in achieving greater global peace and security.

We Canadians have a $25 billion opportunity in front of us by pursuing what I have described. To capture this opportunity, however, we must do a better job at the following four things:

• Improve access to risk capital for companies investing in processing infrastructure as well as improve tax incentives to de-risk the necessary capital investments and in general, make Canada a more competitive place to invest for both foreign and domestic investors.
• Support companies—especially small- to medium-sized enterprises—to gain access to global supply chains and secure offtake agreements through these supply chains to in turn support investments into manufacturing plants here at home.
• Modernize Canada’s regulatory system to make Canada the preferred global destination for investments in innovation—without compromising food security.
• Build additional scale-up infrastructure to help the many innovative small- and medium-sized companies that make up over 90 per cent of the businesses in this sector, scale their businesses to meet global demands.

Protein Industries Canada has already been working over the past five-plus years to address one of the most significant challenges of improving labour productivity in Canada—increasing business-led investments in, and diffusion of, commercialized innovations. Since its inception, Protein Industries Canada, along with our member partners has invested well over $600 million into a wide range of new, productivity-enhancing products and processes—all of which now are valuable intellectual property assets. We are also making progress on the regulatory front through the work for the Centre for Regulatory Research and Innovation. However, there is more we, and our partners, need to do—especially around the four priority areas noted above. At Protein Industries Canada, we continue to advocate on behalf of our industry and work to increase awareness of the potential of this industry. Over the coming months, we will continue to build our plan and will be reaching out to industry for your thoughts and support as we work to advance Canada’s ingredient manufacturing and food processing industries.

My goal at the end of my tenure as Interim CEO is to have a solid plan in place that will secure the future of these important sectors for Canada, and also for an enduring role for Protein Industries Canada.