Fueling the agri-food economic engine

by Glenn Fraser & Ezio Di Emanuele, MNP LLP

Federal, provincial and territorial (FPT) governments are currently working together to develop the next Agricultural Policy Framework (APF) which will launch on April 1, 2018. Otherwise known as Growing Forward II, this will be the FPT governments’ third framework over a nearly a 15-year period.

FPT governments in partnership with the agriculture, agri-food and agri-based sector have made investments contributing to the prosperity and growth of the sector. It is an economic engine that generates over $100 billion for the Canadian economy (close to seven per cent of Canada’s GDP and one in eight jobs) and is the world’s fifth-largest exporter of agriculture and agri-food products destined to almost 200 countries at a value of $60 billion.

Against this backdrop, in July of 2016, FPT Ministers of Agriculture met in Calgary to set the parameters for the next APF consultations and negotiations, agreeing to focus on six priority areas:
1. Markets and Trade
2. Science, Research and Innovation
3. Risk Management
4. Environmental Sustainability and Climate Change
5. Value-Added Agriculture and Agri-Food Processing
6. Public Trust

As the consultation process continues between FPT governments and sector stakeholders, they will be faced with a number of questions, some of which include:

– How much of an impact have the last three five-year APF’s had on the sector’s competitiveness, productivity and innovative capabilities? In measuring and assessing previous APFs, what worked, what didn’t work so well and how will the new APF be adjusted accordingly as we move forward?
– Will the next APF’s six areas of focus be prioritized against policy and program objectives such as job creation (in both urban and local communities), competitiveness and productivity?
– Do we need to be more structured and targeted with sector-government investments in research, science and innovation? What are some examples of success stories in this regard and should they be communicated in order to stimulate additional investments in innovation?
– What will be our next “canola success story” in terms of program funding that targets the development of new crops and products?
– Which segments of the bio-economy should be prioritized for investment? Bio-chemicals? Bio-products? Bio-materials? For example, we’ve already seen research and development related to bio-based materials being ingredients in auto parts and compostable coffee pods.
– With some economists and pundits forecasting low growth in the short to medium term, should there be increased emphasis placed on, for example, markets and trade both in terms of forging new trade agreements and enabling enterprises to export? In this regard, how does the sector continue to capitalize on the emerging economies and affluent middle classes of the Asia Pacific?
– How does the sector and governments continue to effectively engage Foreign Direct Investment (FDI), especially in light of attractive incentive packages south of the border?
– Should a Food Manufacturing Innovation Fund be established similar to that of the federal Automotive Innovation Fund (AIF); a fund that would offer financial assistance to food manufacturers to invest in existing plants or open new facilities?
– How can governments work to enable producers and processors to maximize economic value while simultaneously contributing to social and environmental benefits?
– Should more APF funding programs be shifted from loans to grants? If so, should the funding formula be a combination of a grant and a repayable loan?

The next APF is another opportunity for governments to work together with the sector to help strengthen its competitiveness, productivity and profitability in an ever changing global landscape. A landscape that is driven in large part by both domestic and international consumers who are placing a priority on convenience, health and wellness, transparency and ethnicity to name a few.

More and more consumers are wanting to know what they are eating and how their food products are raised and grown. Public trust in areas such as ingredient transparency as well as food safety and quality are part and parcel of the “Canadian Brand” both in domestic and export markets.

How then does the sector-government partnership within the context of the next APF help respond to ever emerging consumer trends and global competition? How does it help strengthen the “Canadian Brand” and enable innovation by creating a business environment that is contributive to new products, new technologies, new processes and new strategic alliances?

There will be many more questions posed and input provided during the course of the next APF consultations. It is our hope that Canada’s agri-food industry continues to be an engine fueled by a sector-government partnership that is both economically, environmentally and socially beneficial to all Canadians.

Glenn Fraser is the VP and National Leader for MNP’s Food & Beverage Processing practice. He can be reached at 877.251.2922 or Glenn.Fraser@mnp.ca. Ezio Di Emanuele is a Senior Advisor with MNP’s Food & Beverage Processing Business Development group. He can be reached at 519.623.3820 or Ezio.DiEmanuele@mnp.ca