The inability to achieve production-line capacity was cited for the recent closure of two Canadian-owned food processing facilities serving the country’s densest population centres.
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The closures, combined with soon-to-take-effect closures of two further-processing pork factories in Quebec, leave primary producers of both vegetables and livestock hoping this isn’t a sign of things to come.
Pickle specialists Whyte’s Foods closed the doors on its Sainte-Rose plant in Laval, Que. on Dec. 30, with the “relocation of certain employees and equipment” to existing facilities in Saint-Louis de Richelieu, Que. and Wallaceburg, Ont. At the end of January, TruHarvest Meats stopped taking in cattle to its Toronto slaughterhouse, thereby leaving Ontario with just two federally-inspected beef plants.
Why it matters: The closures are evidence that, despite various government support programs aimed at easing the effects of COVID-19 and its aftermaths on food processing, uncertainty remains a reality in the sector.
A Nov. 3 news release from the Quebec-based Whyte’s stated “persistent labour shortages create(ed) the inability to meet minimum production thresholds” in Saint-Rose.
And in a recent interview with Farmtario, TruHarvest vice-president Chuck Oulton said an inability of the company — founded two years ago by the Forest-area beef-producing Burgin family — to secure approximately $5-million in financing for a plant upgrade and expansion to the former Ryding-Regency facility prevented them from achieving the economies of scale benefits of full, five-day-per-week processing capacity.
Importantly, it hasn’t been all bad news recently in central Canada’s food processing sector. France-based Bonduelle, with Ontario vegetable processing facilities in Tecumseh, Strathroy and Ingersoll, saw its parent ownership switch in late 2022 from France to the U.S. It now falls under the Nortera umbrella.
According to Ontario Processing Vegetable Growers general manager Keith Robbins, a recent meeting with the new owners gave him confidence that what he referred to as “strictly a structural change” in the company could lead to “a significant increase in (vegetable processing) capacity in Ontario.”
“They’ve already announced a fair number of investments already since taking over control,” Robbins said of Nortera, including expanded “tunnel capacity” in Ingersoll for handling sweet corn and enhanced tomato-processing equipment in Tecumseh.
On the meat side, Beef Farmers of Ontario chair Jack Chaffe says provincially licensed plants handling cattle have been running, on average, at over 100 per cent rated capacity thanks to a number of funding programs aimed at smaller-scale upgrades such as expanded freezer space and food safety compliance. “Really since 2019, with a few blips through COVID… everybody’s been putting lots of animals through” their provincially licensed facilities.
Food and Beverage Ontario CEO Chris Conway, meanwhile, said government-supported efforts to soften the effects of the ongoing labour shortage on Ontario’s food processing sector are starting to gather steam. He told Farmtario a basket of federal, provincial and industry-financed programs under the “CareersNOW” banner “has placed hundreds of people in jobs and has over 400 companies participating.”
The danger, though, is that upturns elsewhere in the economy cause the severity of food processing’s labour challenges to eventually slip off the government and societal radar screens. If that happens, Conway warned, CareersNOW — including virtual job fairs, training courses, mentor programs and high school outreach — could revert to the old model of receiving funding for a couple of years but then is expected to continue on its own without taxpayer support.
“In the past,” he noted, “the funding has always been fragmented and sporadic, with one-time programs” that could be cut off at the whim of politicians. “With CareersNOW, we’re going to need three to five years to be able to see long-term results.”
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TruHarvest’s Oulton didn’t pinpoint labour shortages for leading to that plant’s closure. But it seems likely that if the Burgin family did manage to loosen government purse strings to support their hoped-for $5-6 million expansion, labour shortages would have quickly thrown up a new barrier to full-capacity meat packing.
Likewise, labour shortages weren’t given as the main reason for the recently announced closure of two pork further-processing factories in Quebec effective April 28. Olymel, which says the closures are part of a “reorganization” it embarked upon two years ago, due “to the ability of other (Olymel-owned) facilities to produce the same products and therefore achieve savings and efficiencies.”
One hundred and seventy jobs will be lost from the Olymel closures.
But labour shortage lurks in the background. In a Feb. 1 news release, Olymel CEO Yanick Gervais said the decision “should enable us to achieve our operational optimization objectives more rapidly in the context of unfavourable economic conditions, with rising raw material costs, labour shortages and the weakness of certain markets all affecting the company’s profitability.”
Beef Farmers of Ontario have identified labour as a major stumbling block. Through partnerships with the Canadian Cattle Association on the federally licensed side and Meat and Poultry Ontario on the provincially licensed side, they’re calling on governments to initiate stronger programs for allowing offshore workers to get meat-packing jobs in Ontario, and put more money behind training for the meat-packing sector.
“We would also like to see more investment from governments for infrastructure to modernize the plants,” Chaffe said, “but tackling the problems with the workforce is definitely the key (lobbying point for the organization).”
Likewise, Ontario Pork identifies two “asks” of government according to board chair John De Bruyn: “Investment in Ontario’s pork sector… to address the current reliance on processing plants in other provinces and the United States” (80 per cent of the province’s market hogs are processed in Ontario, including at just two federally inspected plants, but the other 20 per cent crosses borders to the east or south); and “resolv(ing) labour shortages through greater government and industry collaboration to address the recruitment, training and retention of workers on our farms as well as for our industry partners.”
Conway acknowledges primary producers also face labour shortage concerns. But on most farms, he suggests, it’s one of a group of significant concerns vying for the top spot on the priority list.
In food processing, by contrast, over the past few years, labour has consistently topped the list. “I’ve heard the chair of our board of directors say repeatedly that we have three top issues,” he said. “Number one is labour. Number two is labour. And number three is labour.”
Food and drink manufacturing in Ontario numbers approximately 4,000 businesses, mostly with less than 100 employees, and directly employs 125,000 people. The loss of TruHarvest saw about 160 people thrown out of work.
But the number most concerning to Conway is 25,000 — the number of jobs that will become available within the next three years due to retirements and other departures. He related a recent tour at a processing facility in Chatham when a facility manager explained “we’ve got good (employee) retention. We’ve got a really good team who enjoys working here and does high-quality work. But what I don’t think people are getting their minds around is that a lot of these employees are retiring in the next three to five years.”
Those retirements could pile onto already-existing challenges in finding employees that have seemingly multiplied in the post-COVID era.
“Because they can’t find enough workers, a lot of (food processors) are reverting to their core production strengths” and sometimes contracting out the higher labour needs products to offshore partners. Robbins cited a frozen product that a Food and Beverage Ontario member company recently had the opportunity to introduce for export to Australia. The company ultimately decided to let that opportunity pass because “they didn’t have the labour to do it.”
“And there are all kinds of weird things that have happened with respect to supply chain and costs of production over the past few years that are just adding to this labour situation.”
Robbins says Ontario offers numerous enticements to food processing companies looking to invest in new or expanded capacity. “We have major population centres, we have good (food) growing areas and competent growers, we have proximity to distribution infrastructure with links to North America and globally,” he said.
But if other jurisdictions have easier access to labour or stronger government programs to address labour shortage challenges, those companies may decide to build or expand elsewhere.
Conway has high hopes for further results from CareersNOW and other programs targeting food processing labour shortages – if the momentum of awareness among governments and society at large can be maintained.
“We’ve had a really good relationship with the provincial government and we really appreciate the support,” he said. “It’s coming through OMAFRA; it’s coming through Skills and Training.”
He added that when Lisa Thompson, minister of Agriculture, Food and Rural Affairs, announced the ruling Conservatives’ Grow Ontario strategy in November 2022, the top three goals — increasing the consumption of food grown and prepared in Ontario by 30 per cent; increasing the production of food grown and prepared in Ontario by 30 per cent; and increasing Ontario’s food and beverage manufacturing GDP by 10 per cent, all by 2032 — were “right on the money.”
But “the challenge we have is we’re not thought of by very many people as manufacturing.” As a result, food processing tends to fall out of the conversation when governments and society talks about economic recovery.
“In fact, we’re the largest manufacturing sector by employee numbers in the province. And that surprises a lot of people.”