Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 59 - Evidence - Meeting of November 29, 2018
OTTAWA, Thursday, November 29, 2018
The Standing Senate Committee on Agriculture and Forestry met this day at 8 a.m. to study how the value-added food sector can be more competitive in global markets.
Senator Diane F. Griffin (Chair) in the chair.
[English]
The Chair: Good morning. I am Senator Diane Griffin from Prince Edward Island, chair of the committee.
We have some guests with us here today as witnesses, but before we hear from them, I would like senators to introduce themselves.
[Translation]
Senator Maltais: Ghislain Maltais from Quebec.
Senator Dagenais: Jean-Guy Dagenais from Quebec.
[English]
Senator Oh: Senator Oh, Ontario.
Senator Busson: Senator Busson, British Columbia.
[Translation]
Senator Gagné: Senator Raymonde Gagné from Manitoba.
[English]
Senator Mercer: Terry Mercer, Nova Scotia.
Senator C. Deacon: Colin Deacon, Nova Scotia
The Chair: For our first witnesses, we have two gentlemen: Luis Garcia, Chair, Craig Richardson Institute of Food Processing Technology, and Lyndon Ashton, Manager, Canadian Food and Wine Institute Innovation Centre.
I thank both of you for accepting our invitation to appear.
Mr. Ashton, the floor is yours.
[Translation]
Lyndon Ashton, Manager, Canadian Food and Wine Institute Innovation Centre, Niagara College Canada: Sorry, I don’t speak French.
[English]
Therefore I will continue in English.
It is an honour to be here presenting to you today. We certainly appreciate your interest in how Niagara College is supporting competitiveness in the Canadian food and beverage sector. I would like to take the next five to seven minutes to paint a picture for you of how we are helping to achieve this goal.
The clients we serve are predominantly small- and medium-sized businesses, usually at the point where they are looking to scale up existing offerings or need help developing and bringing new products them to market.
Some of the challenge they face is finding adequately skilled labour, training challenges, accessing funds to bridge the gaps between seed funding and commercializing new products, technical knowledge of how to scale up, and ways of getting small batches of pilot products into the market to adequately test them in a real-life environment.
Through generous support from government programs we have been able to help food and beverage companies go from concept to development, creating new prototypes and ensuring the right types of food safety measures are covered and that our clients retain the intellectual property that we assist them in creating.
Programs such as the Post-Secondary Institutions Strategic Investment Fund, the Canada Foundation for Innovation, and the Natural Sciences and Engineering Research Council have allowed Niagara College to build infrastructure, purchase equipment and offset the costs for food and beverage companies while training talent, transferring critical knowledge to industry, and filling some of the gaps that prevent them from innovating.
Instead of talking about generalities, I would like to provide you with a few examples that make it a little easier to understand how we help these companies commercialize and be more competitive in a national and global marketplace.
One client we worked with is Reinhart, a small to medium size company out of Stayner, Ontario. You would likely know them best for the apple cider vinegar products they have on the market. They have been in almost every major grocery chain for as long as I can remember. They have the Allen’s apple juice brand, pie fillings, baking supplies and products like that.
They approached us. They were interested in entering into the light alcohol beverage market. Given our institution has a training winery, cidery, brewery and distillery, we were able to work with our research and innovation folks on the food science side and couple up with the winery to produce a product for them.
Ultimately, this resulted in Reinhart’s red apple cider being launched in May 2017 in about 270 LCBOs across Ontario. It has been so successful that it doesn’t stay on the shelves.
Not only is this is a real success story in the fact that this is helping a medium size company doing value-added processing in Canada. They also have a strong focus on supporting the local economy. Their company grew up around tapping into apple orchards. We helped them to develop a product that sourced 100 per cent local Ontario apples and that utilized seconds and things like them to put to use product that otherwise may not have been used.
Another example is a small company that we worked with out of Toronto named Broya that is focused on sharing the benefits of eating nourished food inspired by holistic living. When they originally approached us, they had initially put a bone broth product on the market.
Given our capabilities in food science, culinary and commercializing new products, we were able to help them at the Canadian Food and Wine Institute Innovation Centre to refine their bone broth products and actually develop new types of meat bites that they commercialized and are available in stores like Sobeys and online retail shelves across Ontario.
Another example is Miname, a company that approached us. This is an interesting situation because they were an importer of ethnic malt beverages. They were having difficulty realizing they were unsatisfied with the products they were getting. They weren’t stable or consistent in the manner they were looking for.
We ended up putting our team together again and helping them produce new Canadian intellectual property. We helped them overcome challenges associated with co-packing, food safety and product development. They are now looking at exporting these products, not only to the United States and selling them within Canada, but to other places around the world.
These are some examples of how our facilities help different kinds of companies to develop intellectual property and to de-risk their investment decisions. By using different types of equipment and developing different processes, they get a better handle on how they can increase their competitiveness and thereby create jobs and support workforce and economic development.
I would be remiss if I didn’t mention something to do with workforce development, considering that we are a college. Colleges across Canada are dedicated to supporting applied research, training and workforce development. We take this seriously. We provide co-op and internship programs, as do many colleagues, through two Technology Access Centres, which is an NSERC program. Many of our other college colleagues have a number of these programs. There are actually 30 across Canada. Hopefully they will expand by another 16 in the coming year.
We are able to hire students as research assistants from our culinary innovation food technology program and from our brewery and winery programs. They actually work with us under the tutelage and guidance of our food scientists, chefs and product developers.
This is a great experience for the industry partner because they are working shoulder to shoulder with these talented young people. Often they end up getting hired as soon as the product is delivered or the project is finished.
If I could leave you with three things today, it would be the importance of multi-year funding programs that play an important role and are targeted toward commercializing through hands-on tangible results like the NSERC Technology Access Centres programs, finding ways to build on and encourage models that simultaneously develop talent and support new product and intellectual property development in the food and beverage sector, and strengthening the position of Canadian colleges to continue to expand on applied research supports to our small- and medium-sized companies. We see at the ground level that this is really making a difference.
Please keep in mind that this is a five-minute to seven-minute snapshot of what we have going on. We know that Senator Mercer was able to visit us in 2014. We are grateful for that opportunity. I certainly extend a welcome to all of you if and when you have the time to come and visit us.
We have put in place a new 49,500 square foot agri-food and athletics building. Hopefully, by the middle of next year, we will be able to bring online new infrastructure to continue to support our food and beverage companies through a beverage pilot processing facility that will help fill the gap with respect to small-batch, short-run activities.
We do concept development prototyping. Now we are looking at bridging another gap that exists in the marketplace where people have difficulty getting their products to market because they need to do short runs and not just the 40,000 or 50,000 litres that a co-packer would require them to do. We would be happy to provide tours or speak in more detail about the types of things we do.
Luis Garcia, Chair, Craig Richardson Institute of Food Processing Technology, Conestoga College: I represent the Craig Richardson Institute of Food Processing Technology at Conestoga College. This institute was created in 2010 as a result of a partnership between the then Alliance of Ontario Food Processors and the Conestoga College to address the needs of the food manufacturing industry in terms of a skilled workforce.
Since then we have created a number of different training programs and have engaged in the last couple of years in applied research projects much like the ones that Mr. Ashton just mentioned.
I would like to address what I think are the big challenges the industry is facing in terms of a lack of competitiveness in comparison to other jurisdictions. The industry is facing three key challenges: access to technology, skills and knowledge, and talent attraction.
You would have the context but I want to reinforce that the food and beverage manufacturing industry is the largest manufacturing sector in Canada with between 6,000 and 7,000 food and beverage processors across the country. A key factor is that more than 95 per cent of them are small- and medium-sized companies.
An interesting but important factor is that the vast majority of agriculture products grown in Ontario are purchased by this industry. Not only are they the largest manufacturing sector in the country, but they are also the largest customer of farmers. They play a very important role in the economy.
The first challenge I mentioned was access to technology. There are two important factors in this regard. One is high costs especially for small- and medium-sized companies. Employment is readily available in many cases. It is mostly built in Europe but for large-scale enterprises. Not only is it expensive, but it is difficult for small- and medium-sized companies to find smaller-scale equipment.
The second point is skills and knowledge. The industry has repeatedly mentioned this repeatedly the huge lack of trained and skilled employees, due to the shortage of skilled people in Canada and partly due to a large turnover culture in the industry. Many smaller companies don’t want to spend their time and resources on training their employees. As soon as they train them, they think they will leave and go elsewhere. It is a vicious circle. There isn’t a culture of training employees. At the same time they keep hiring people without training, which has an impact on their productivity.
Another part of it is wages. They are not the best paying industry. They have gone beyond the minimum wage now, but they are still not competitive compared to other sectors like the auto industry.
Education is also important. I strongly believe that many small- and medium-sized companies do not have the proper business management knowledge and skills. Many of them are scared away when they hear about an investment in equipment. They tend to look at the amount of money, but they don’t see what the return on investment will be.
It is difficult for them to make a decision. They are so busy running their business that they don’t take the time to look into the numbers, or maybe they don’t have the right people to help them look into the numbers.
I believe business management is lacking. It is the same with regard to automation and robotics. Not all of them have the skilled people on staff to help them determine the correct equipment they need to improve their productivity.
My last item is talent attraction. There is a big misconception of the industry in the general public. Therefore there is little interest in becoming part of the industry. It is difficult to attract students to our programs and to attract people to work in the industry. This is something that needs to be worked on.
I have a couple of recommendations with respect to each of the three items. Access to technology definitely needs support in terms of funding for small- and medium-sized companies to purchase equipment on a smaller scale and for R&D. We could build a strong equipment manufacturing industry in Canada.
Very little equipment is made in Canada for this industry. Most of it comes from Europe and some from the United States. We have the know-how, technology and resources. We make airplanes. We make robots that can go to Mars. Why can’t we make equipment for the food industry? This is something we should be supporting.
In terms of business management, I recommend funding for small- and medium-sized companies to hire, not a consultant to help them with business management but someone who is full time on staff, vested in the business and can help them to grow their operation.
In terms of talent attraction, funding is needed to increase awareness of the great opportunities the industry has to offer in terms of jobs and careers. Several organizations across the country could use this support. Thank you.
The Chair: Both of those were both good presentations. We will start with Senator Maltais.
[Translation]
Senator Maltais: Mr. Ashton and Mr. Garcia, thank you very much for being here this morning. This is very informative, especially since you concentrate on small- and medium-sized businesses. They are the foundation on which our society is built and represent Canada’s largest employer.
Mr. Ashton, as you know, our committee’s mandate is to study the value-added food sector. You mentioned juice production. I was glad to hear that you’re able to use the apples that aren’t fit for store shelves for juice and jams. Do interprovincial tariff barriers hold your companies back?
[English]
Mr. Ashton: For the clients we work with I haven’t seen at this point that there may be barriers with respect to that. However, that is not something I have specifically investigated with that company, in particular, so it wouldn’t be prudent for me to provide specific comment on that.
We are setting up our facility right now in order to support short runs of products. It is important for us that we have it approved by the CFIA. That is a step in the direction of ensuring the products we help them bring to market in the short term are saleable across Canada because they meet the various types of regulatory and food safety requirements.
Specifically to the interprovincial tariffs, they are not something I have spoken to them about.
[Translation]
Senator Maltais: The reason I ask is that our committee travelled to Kelowna, British Columbia, in the Okanagan Valley, a few weeks ago, and many producers told us that domestic tariff barriers were an impediment for them. Obviously, fruit juice manufacturing is a highly competitive sector. The competition in Ontario is huge. Products approved by Health Canada and Agriculture and Agri-Food Canada can be sold on the U.S. market. You are near the American border; do you have any sales in the U.S.?
[English]
Mr. Ashton: We do not sell products ourselves. We develop them for the clients, and they in turn sell them. At this point in time we develop the concept and the prototype with them. It is then up to them to manufacture that product themselves, where we help integrate the process, if necessary, into their manufacturing process, or we connect them with co-packers to produce their products.
To overcome some of the risk associated with that, we will often have some of our team food scientists, product developers or whomever it may be, go to the actual co-packer sites and support them on the initial co-packer trial runs.
When it gets to the actual manufacturing of the product, we are not selling that product. Our role is to fit into that node in the innovation ecosystem.
There is a serious shortage of the types of co-packers that exist to support small batch short runs. This is one of the reasons we were able to successfully secure the different types of funding for the infrastructure and the equipment to put in place our beverage R&D pilot processing facility.
All other challenges aside, we wanted to be able to help clients validate new products they are prototyping in the market before they go down the road of investing in, say, 40,000 litres or 500,000 units that may sit on a shelf or in a warehouse and turn to waste because there is no genuine market uptake for them.
[Translation]
Senator Maltais: Thank you.
Mr. Garcia, you talked about technology and the shortage of workers. As everyone knows, workers in the industry don’t make $25 or $35 an hour. The equipment is manufactured outside the country and is more expensive once it arrives here. Accessing skilled workers is a challenge because the pay is lower than in other industries. Does that hinder the growth of small- and medium-sized businesses? If so, what solutions would you recommend to the committee?
[English]
Mr. Garcia: When I referred to low wages I was speaking about entry levels in general labour positions which are still close to the minimum wage. That is definitely a hindrance in attracting people to the industry.
The more skilled positions like a machine operator will be above $20 an hour, so they will make a better wage.
The big challenge is that people don’t understand the level of technology that exists in the industry or that could exist in the industry. Many companies have leading edge technology and high tech. The operators of those machines need to be skilled but few people know this. They tend to link the food industry mostly with food service, which is the restaurant or kitchen type of operation. This is not the industry we are talking about.
There is a big misunderstanding that goes beyond the workforce to parents and guidance counsellors that don’t think of the food processing industry as a career option. One of my recommendations was to help industry organizations by funding them to develop and deliver a campaign that changes this misconception of the industry.
The food industry is very clean. People tend to think it is not. Most people think about a slaughterhouse, which is not that clean, but that is much more to the food industry than that. There are slaughterhouses, and I think there will always be, but that is not it.
There is a hindrance in terms of wages. More than that, there is a hindrance in terms of the lack of awareness of the opportunities available in the industry.
[Translation]
Senator Maltais: Thank you very much, Mr. Garcia and Mr. Ashton.
[English]
Senator Oh: Thank you, panel, for the good information. I think both of you are the best marriage of witnesses.
What you are doing is very important. It reflects into international tourism trade and raises the name of Canada’s food industry.
How do you encourage young people to get involved? I talk to people who are open for business. No matter the type of food business, help is most important. They can’t get anyone from inside to manage their restaurant, the food industry or anything. They can’t find anyone in Canada.
Mr. Garcia: It is a difficult challenge to overcome. For example, Food and Beverage Ontario launched a talent attraction campaign a couple of years ago. I wasn’t very optimistic about it because they had limited funding available to them.
However, a month ago I saw the results of the surveys conducted with younger adults and parents. The comparison between the 2015 and the 2018 surveys is amazing. The interest and the understanding of the industry in a positive way went up from about 8 per cent to about 30 per cent in those three years.
Programs like that one would go a long way to help. They are longer term, but this type of initiative needs the support of government because it will drive the industry to where we want it to be. It will also strengthen the workforce and the opportunities for our younger population.
Mr. Ashton: I certainly agree with my colleague. I have a few examples of things that we have been doing and have been able to tap into.
Food and Beverage Ontario is an excellent example. That was a good initiative. Another one through our Tech-Access Canada networks involved the Technology Access Centres themselves. It provides a platform of different opportunities. We have an executive director or someone as an umbrella organization that lobbies different levels of governments and associations to find opportunities to tackle certain challenges.
One of them was related to this challenge. It led to them bringing an opportunity to do video spots called “5 Minutes of Science.” Our food scientist, Dr. Ana Cristina Vega Lugo, was able to do a five-minute science video.
It was almost like a TV Ontario-type video. She took people through the process of what we do in the labs and how it is exciting and fun because it is taking art and science and bringing them together to create something really neat and of interest to all different ages of people.
Another one was the Canada Foundation for Innovation that has engaged us again. Last year, there was an opportunity to have some different folks featured at Parliament to highlight all the different types of skills development, growth and talent opportunities for young people that were outcomes of infrastructure funding received by different colleges across Canada.
One of our students was featured and was able to do a five-minute video spot that was broadcast widely. They went to his house and showed him cooking there. He told his story about where he went to university. He started in one avenue and then went to Holland College because he realized he loved food. From Holland College he went to Niagara College to take advantage of the food science and culinary programs.
Those are the types of initiatives that help to combat the type of sociocultural challenges that exist that Luis was speaking about.
Many of our colleagues across Canada do a number of different things. At the college level they are finding ways to engage with the secondary school system to provide opportunities to highlight and showcase what we are doing in the different fields and where these fields lead to real careers in different areas that may have not been looked at so positively. For example, people think that manufacturing is just metal banging or food production is working in hospitality as a server or a line cook.
Those different types of things can work toward making a cultural shift. Anything all different levels can do to support that would behoove them.
Senator Oh: Coming from a diversity background, I would suggest you might want to look into multiculturalism and the diversity in Ontario and Canada.
There is a huge market of young people, especially second generation, that are trying to get into this business but don’t know how to do so.
Mr. Ashton: Absolutely.
Mr. Garcia: Perhaps I can comment on what my colleague mentioned. There is a fine line between what we want to do and what some organizations are doing.
As I mentioned, there is a misconception. Many people link the food manufacturing industry with food service and cooking. When I first started with Conestoga College, I couldn’t get anybody to come to my booth to talk about food manufacturing.
We had beautiful big table-top banner made that talked about food technology. As soon as people saw it, they would stop, turn, come to us and say, “Oh, cooking.” It was very disappointing that cooking and kitchen activities were top of mind.
We need to be careful how we promote the manufacturing industry because there is also a lack of employees in the food service industry. The food manufacturing industry requires a lot more support because it has a bigger impact on the economy.
Senator Bernard: We are thinking on the same wavelength this morning.
I have a supplementary question for Mr. Ashton who mentioned career days and going into high schools.
What are the uptakes and responses from schools? Are you getting opportunities to get into schools? What has the response been like across the country?
Mr. Ashton: We have a large team that focuses on retention and recruitment. From what I understand, there is a very positive relationship between the college and the different school boards that we work with.
We do the usual career fairs and career days twice a year. A lot of effort is placed on getting into the schools, making presentations and bringing groups of students to tour our facility space. You can speak to a group of people as much as you want, but it really makes a big difference if you can bring them in to see what they are doing.
I certainly agree with Mr. Garcia and what he is saying about the importance of changing perception relating to manufacturing and food manufacturing in particular. We are very focused on food manufacturing as well as having a focus on the culinary service side. That’s why we have a culinary innovation food technology program.
Many different school boards and individual schools participate when we bring students in. We stop and take them through the program areas where they are learning about what they can do to be a chef. Equal parallel is given to our food technology programming. People learn that it is not just about becoming a chef. When you learn to cook, you can become a product developer or a quality assurance or quality control person, and so on.
They see exciting things. As I mentioned, we have a lot of tangible products on shelves that we can show. The students that we hire are very energized about what they do. They actively participate in all of the ongoing events and activities.
Then they have peers or someone a bit older who is succeeding on a certain pathway, excited and talking to someone younger who is recognizing there might be a good opportunity.
In answer to your question, there is good uptake. There can always be better uptake, I am sure. Part of that is probably related to time, resources and being able to make things happen.
Our focus is very much on youth and encouraging them to understand how there are great benefits in what people can do through post-secondary educational institutions with industry careers.
Senator Bernard: My other question is related to employment and follows on Senator Oh’s question as well.
Picking up on the comment around multiculturalism, I would take it a step further and ask: Are any proactive measures being taken in your industry around employment equity?
I am thinking about the large numbers of people from racialized groups, new Canadians and so on, who are unemployed and finding it difficult to get into any career. Are there steps taken to proactively look at how you might use employment equity legislation in your industry?
Either of you can speak to that.
Mr. Ashton: We certainly take that very seriously. Our innovation centre has probably about a 90 per cent female to male ratio. Our senior food scientist came from Mexico and went to Guelph University. She has very successfully integrated herself in her career and her life in this area.
We are a medium size college. Our student body is up to about 11,000 now and keeps growing. We have gone from 36 per cent to 38 per cent international student representation. Our very large international department focuses on diversity, inclusion, ensuring effective integration and supports for people within the school system.
Within the educational components a lot of different training is done throughout staff for faculty to ensure we are looking at the approach and encouraging a more diverse and inclusive environment.
On my own side, we actively look for opportunities to engage the international body. It’s not that international students go into their own separate classes. They are international students. They are just like domestic students and everybody else. We actively look for ways we can encourage greater participation.
We hire students from our culinary innovation food technology program. As one of the people who is hiring them and part of the committee that hires them, we are actively looking at ensuring that there are enough opportunities and that awareness of these opportunities is getting out to different people among the student body who are international students of different ethnic backgrounds.
There is a large focus on ensuring that we can engage the Indigenous student body as well. It is looking at things from a very balanced and equal perspective and approach, ensuring that we are not going overboard to a point where people feel alienated but that we are taking all these considerations into effect when hiring, teaching and supporting people. That extends into our career services and includes a lot of training in this area and actively looking to support it. It’s part of our overall strategy for the college.
Mr. Garcia: Going back to your previous question, colleges go out into their community high schools to promote their programs. There is only so much colleges can do.
We have very limited resources for this type of activity. We go to Immigration Services offices. We work very closely with Employment Ontario offices as well. We are trying to capture the younger students coming out of high school and to attract new immigrants, second generation and second career people.
In terms of your second question, it’s clear that colleges are attracting a large number of international students from many different countries. China and India are probably the ones that are sending us the most students.
We have a large number of international students in our food programs at Conestoga. I would say 90 per cent of our students are international students. Those who are eligible to work after graduation find employment quite readily.
In terms of the industry and any need for policies in this regard, we are beyond that point. There are many companies whose workforce is all international, all new immigrants from different parts of the world. They are Portuguese, Hispanic, Eastern European, Indian and Chinese. There are companies that have more than 20 languages spoken on their plant floor.
I guess this has happened because of the need for a workforce. They are hiring people regardless of their ethnic background or gender. I don’t think that is a problem anymore.
Senator Mercer: Mr. Ashton mentioned the fact that I have visited Niagara College. I would encourage colleagues to go if they have the chance. I found it to be a unique place where one could see good training going into an industry many of us take for granted.
Both of you referred to wages being close to the minimum wage, but I think you need to talk about the future. If I go in at that level, where will I be in five or 10 years if I stay in a sector? That’s where the opportunities are.
It’s not what I will be making for the next 18 to 24 months but what I will be making after that and what are the management opportunities. There are many places and everybody needs good managers.
I wanted to ask about another issue. We have all talked about the importance of international students. I assume the reason international students are of great value to colleges and universities is because students pay the full fare. There are no subsidies from provincial governments or from other government programs. They are paying the actual cost of running the program, which gives the school more capital to reinvest in the programs.
Perhaps you could comment on that.
Mr. Garcia: You are absolutely right that they are paying the full fare. However, I don’t think that is the only reason why the growth in international students has happened.
There is also the fact that demographics in Canada don’t help us. The number of younger people is going down. It has been going down for the last few years and will continue to do that for the next couple of years. There are fewer people graduating from high school that we can attract to our colleges and universities.
We need to fill that gap with international students as well. Those are the two factors there.
Mr. Ashton: I would certainly agree with that. Not only is it looking at the demographic and immigration trends, but it’s looking at the environment and the opportunity provided through the different colleges, recognizing that when students coming into what is already a very multicultural environment can find areas they feel comfortable within and the types of education suitable for them.
Part of it is outreach that happens through the college system. Different colleges like ours have programs and different things in the UAE where folk recognize, even in their own countries, that there are valuable educational opportunities they can come to.
I would like to speak briefly to your first comment about looking five years ahead. I agree with you completely. This is where having innovation centres is a great advantage.
We have two Technology Access Centres. We have three innovation centres as a whole. The platform that provides for students to work as employees and get hands-on training in industry-replicated environments. That makes a big difference in terms of their wages.
A young lady worked with us before the summer who was going into graduation. She had worked with us successfully for a few semesters and was able to secure a number of different co-ops with companies like McCain.
She then worked on a specific project where we delivered an alternative dairy beverage product. She was hired right at the table. The client was thrilled because they had worked shoulder to shoulder. They had done the prescreening process.
She said, “This is great. Thank you. I’ll think about it,” because another employer in Toronto was looking for her. When they found out that she may go to that other location, they offered her $10,000 more in starting salary.
Needless to say, she took that. Making these shifts at the ground level and doing these things incrementally help to change the barometer of the types of wages people can secure. They will start to have an influence on industry with respect to how it has to look at the starting salary it needs to provide to attract talent.
Mind you, that was in the culinary innovation and food technology program, with the emphasis being on manufacturing and product development of food, not simply on cooking or culinary alone.
[Translation]
Senator Dagenais: Thank you to the witnesses. My first question is for Mr. Ashton. Does the availability of public funding affect what you’re able to do? Would more public funding be helpful in expanding your efforts?
[English]
Mr. Ashton: Yes, I would say that is certainly of benefit. More to the point of the funding is looking for multi-year funding opportunities.
We are grateful for the support we get from NSERC or NRC in one-year or two-year envelopes. However, as a person responsible for staffing a centre with highly qualified personnel and for keeping these things going, I can say that programs which provide longer term supports certainly allow us to retain talent and then engage in that knowledge transfer to our companies and our students.
That is not to say we’re not grateful for it. Again, I come back to the Technology Access Centres program and its five-year renewable funding. It’s an excellent program. I know it’s being spread across the country. Those types of things make a big difference, including finding more accessible pockets of funding for clients to be able to purchase the equipment they need to make their dreams a reality.
[Translation]
Senator Dagenais: Mr. Garcia, when it comes to the beverage industry, who are the competitors in Canada? You mentioned the fear around investing and the labour challenges the industry faces. In the short term, though, where in Canada is the competition in the beverage industry, and how much potential is there to grow the market further?
[English]
Mr. Garcia: The majority of the beverage manufacturers are multinational companies, such as Nestlé Water, Coke, Pepsi and the juice manufacturers, from other countries. They have large operations in Canada, but they are not Canadian owned. The Lassonde juice company of Quebec is about the extent of the large manufacturers.
A number of small- and medium-sized beverage manufacturers face the challenge of access to technology to fit their scale, but there are companies doing a very good job at producing beverages of different types.
There is a large apple cider industry in Ontario and Quebec. As well, apple juice is being manufactured in different jurisdictions, but the competitors are mostly from outside Canada.
Senator C. Deacon: The witnesses may not have time to answer this question, given the constraints we now have on our schedule. Perhaps you could just give brief comments but think about following up with the clerk with deeper thoughts, if you could.
Given your great experience working with two college programs, I am wondering about the companies that have been most successful in identifying a need and then pursuing it to develop and commercialize a product, and those companies that have been least successful in that process.
I am certain you have identified some characteristics for success, and I think it would be very useful for us to understand what those are in companies that have really understood.
Please offer some comments now but, in the interest of making sure my colleagues get time to ask their questions, reflect on that and get back to us. We could follow up with additional information because I think it could be quite valuable.
Mr. Ashton: I hearken back to what Mr. Garcia said about business management that I think is key. Most of the people that we deal with who do not succeed are falling down on the business side of things, be it market research, market testing or feasibility. These areas certainly present challenges for folks.
Senator C. Deacon: What about sales and marketing?
Mr. Ashton: Yes, but it is more identifying the market need and then running with it as opposed to producing something that will not have uptake.
Mr. Garcia: I think there are two key factors. One is the ability to develop a sound business plan and all that encompasses. That’s a big one. If you want to be successful, you need to have a strong, well-prepared business plan. You also need to have some understanding of the technology you require to run your business. You can’t really be successful without one of those. The majority of companies I have seen are not successful because they are lacking business plan abilities.
Senator C. Deacon: It would be very helpful if you could provide us with whatever evidence you have to support those positions. Give us your gut feelings but back them up with evidence wherever you can.
The Chair: You would send it to Kevin Pittman, the clerk of our committee.
Senator Gagné: Congratulations to Niagara College on receiving the 2018 Gold Award of Excellence in Applied Research and Innovation from the World Federation of Colleges and Polytechnics.
My quick question is about knowledge transfer which is important to R&D, to foster innovation, and to exchange ideas and techniques. It’s good for the professors, the companies and the students.
Are any producers or business-led groups enrolled in specific programs that your colleges offer?
Mr. Ashton: I agree with you that knowledge transfer is paramount over everything that we look at doing. This is why different types of technology are available to us.
Also hearkening back to what Mr. Garcia said, helping to overcome the challenge that different producers have by de-risking the process allows them access to equipment and training by individuals who provide that for them.
We work very closely with Food and Beverage Ontario. We have an industry advisory committee for our Technology Access Centres which has a number of different associations on it. We put together events and engagements where different industry partners can learn from us.
We have a new beverage pilot process facility coming on board. Hopefully it will be operational by about mid-2019. The idea is to help increase the amount of knowledge and understanding of different producers of multiple types of equipment to help them make more effective investment decisions.
Senator Gagné: What about continuing education?
Mr. Ashton: We have very strong continuing education programs, to the point where we have now turned them into a permanent facet called Expert Edge. We run all different types of training based on our successful programs.
We have converted them into academies. Now, for instance, we have the brew academy where people access and learn on the equipment for a short duration.
Mr. Garcia: We work very closely with companies, so the transfer of technology developed is almost immediate. We see no innovation at the end of the project if this doesn’t happen. Everything we do has to be transferred to the company we are working with.
We have a number of different projects and centres at Conestoga College. We work in collaboration with the Centre for Smart Manufacturing to support the food industry toward smart manufacturing and the advancement of manufacturing, including automation robotics. We also work very closely with Food and Beverage Ontario and independent meat processors, the largest industry sector in Ontario.
Senator Busson: Going back to your comments around international students very quickly, I had a visit from a number of pre-secondary and post-secondary grad students the other day. They were talking about their struggles around getting involved in co-op and internship programs vis-à-vis their struggles to obtain permission to work in Canada and to take part in these programs.
Have you run into those barriers when dealing with your international students as far as being able to facilitate them taking full part in your co-op programs?
Mr. Garcia: No, we haven’t faced that at all. International students on a student visa come with a work permit that allows them to work a certain number of hours during the week while they are in school.
Senator Gagné: It is 20 hours.
Mr. Garcia: Yes. When they are not in school and are out on a co-op placement, they are allowed to work a full 44-hour shift.
I think the federal government has done a very good job of creating an opportunity for international students to obtain a work permit post-graduation. If they complete two years of in-school training in Canada, they are eligible for a three-year work permit.
That is very attractive to industry because they know they are investing in somebody who will stay with them for at least three years. Once they have been here for two years in school and three years in industry, they are eligible to apply for permanent residency.
I believe that is a great opportunity for international students. About 99 per cent of them come to Canada because they want to stay here.
The Chair: I thank our two panellists. There were lots of questions today, so you know there is lots of interest in this topic.
For our next panel we have Rex Newkirk, Associate Professor and Scientific Lead, Canadian Feed Research Centre at the University of Saskatchewan; and from Red River College, we have Heather Hill, Research Manager, Culinary Research & Innovation, Paterson GlobalFoods Institute.
Thank you for accepting our invitation to appear. Ms. Hill, you are on.
Heather Hill, Research Manager, Culinary Research and Innovation, Paterson GlobalFoods Institute, Red River College: Thank you for the opportunity to speak with you today as a representative of the Red River College Culinary Research & Innovation program on how the value-added food sector in Canada can be more competitive in global markets.
First, I will provide some background information on the Red River College research partnerships and innovation department, including Culinary Research & Innovation, which is co-located at the Paterson GlobalFoods Institute with our school of hospitality and culinary arts. I will then go on to address the subtopics of the study in relation to the work that we are completing in Culinary Research & Innovation.
Red River College is Manitoba’s most comprehensive institute of applied learning and a leader in applied research and commercialization, led by research and innovation partnerships. Applied research and innovation at the college is now in its fifteenth year of formal operation.
Over the past five years, the college’s 550 partnerships with Canadian or international organizations have resulted in new or improved products, processes and services. Applied research is concentrated on four major focus areas and supports many sectors, including aerospace, heavy vehicles, manufacturing, transportation, construction, business, health and community services, information and communications technology, and value-added agriculture.
Our mission is to seek out and evaluate new opportunities to collaborate with industry on applied research projects focused on solving today’s industry problems, capturing tomorrow’s industry opportunities and training tomorrow’s industry leaders.
Research, partnerships and innovation is the engine that drives this capacity for innovation by matching industry problems and needs with college expertise, resources, capabilities and facilities. This coordinated effort delivers practical solutions and innovation to industry while enriching the experiences of the faculty, staff and our 21,000 students, including international students from over 60 countries, annually.
Culinary Research & Innovation was established in 2012. It is focused on applied research activities in the agri-food sector to support small and medium enterprises located in Manitoba and is extending into different areas of Western Canada. This is accomplished through a team of chefs and research food scientists that apply their skill sets to address industry needs. The local industry confirmed that the culinary capabilities offered through Culinary Research & Innovation complement the scientific and business resources currently offered in Manitoba.
Culinary Research & Innovation has found an important niche in supporting small companies that require affordable prototyping and food safety modifications to improve their products and processes. We also engage in multi-partner collaborative research projects.
I will now address the first subtopic within the Senate study: What is the comparative advantage of the Canadian value-added food sector?
Canada has a strong education and training system in place from universities, colleges and polytechnics, resulting in a skilled workforce capable of meeting the challenges to improve our value-added food sector. The role of an applied research college or education institute is to prepare for the jobs of the future and anticipate what large multinational companies locating in Manitoba require of their available workforce.
One example of this is the Roquette pea fractionation plant that will be moving into Manitoba. We are addressing this in relation to the value-added food sector by establishing a culinary research program within Manitoba to meet the needs of a sector that is continually growing and innovating.
Red River College is also training Indigenous students in culinary arts, potentially leading to new uniquely Canadian food product development opportunities and incorporation of traditional foods into food service menus and food product development opportunities.
Second, Canada has strong research and applied research programs. Supporting research and innovation helps to transition commodities to value-added food products. Research completed on the production, functionality and utilization of plant proteins has been strongly supported in Canada. Due to this forethought, the industry is now capable of addressing the growing demand for plant proteins and establish Canada as a global preferred supplier of plant proteins, such as pulses that are grown widely on the Canadian Prairies.
Third, resources are widely available to support the industry in the value-added development of agri-food products, including funding programs and access to technical expertise and infrastructure. The role of Culinary Research & Innovation is to export early stage prototyping and development and prepare small and medium companies for the next stages of scale-up.
Next is the second subtopic within the Senate study: What is the food sector’s capacity to generate value-added products in order to meet global consumer demand while remaining competitive in the Canadian market?
There is strong export within Canada at the innovation and product development phase. Culinary Research & Innovation is but one piece of the food innovation landscape in the Prairies.
Increased collaboration among these groups helps to strengthen the quality of the value-added product and helps to inform companies of requirements needed in the export of food products as companies expand and look for new market opportunities for their products. Building culinary research capacity in Western Canada increases the ability to generate value-added products to meet global consumer demand by addressing the gap in support for food innovation ideas and reaching the pilot plant and commercial production scale of products.
Providing training to culinary students so that they can pursue new opportunities with food research and development teams in multinational corporations located in Canada to target export opportunities.
The final topic asks: What support should be given to industry stakeholders in terms of technology, marketing and other areas? When discussing this challenge with our clients that approach Culinary Research & Innovation for applied research, the largest barriers we hear from them include the costs for conducting research including access to research funding, the costs of commercialization, the speed by which the process happens to get products to the marketplace, the scale-up challenges going from kitchen to commercial scale, and the technical challenges regarding ingredients, equipment and regulations.
There is a lot of support at the college level for applied research and industry-led projects through provincial and federal funding programs, allowing small companies to access expertise that is not normally available to them. However, some gaps exist. For instance, support for completion of clinical trial testing is difficult to obtain.
We have also found gaps in the ability of our clients to scale up and compete in the market. It is a huge leap between product development to commercial scale-up, packaging, meeting regulation labelling issues and production for export markets.
Often companies use contract manufacturers and contract packers to help with the jump from product development and small-scale processing to larger processing to accommodate their new markets or export. Increasing opportunities for contract manufacturing and contract packing can help to support the value-added food sector in Canada and promote the export of finished products rather than commodity export of raw ingredients and materials. Specialty facilities are also required for gluten-free, allergen-free products to accommodate the growing demand for these products in our food system.
Small and medium companies are looking for investment in infrastructure with regard to equipment and facilities. Ultimately, the food business is risky, with low barriers to entry and many margins taken throughout the distribution chain with large volumes in production requiring very high initial costs. The Canadian government is addressing many of these challenges through the Canadian Agricultural Partnership funding opportunities.
In looking ahead to future challenges facing the value-added food sector and export, the development of further technology to improve sustainability in food processing and packaging will be required to feed the world beyond 2050. Development of new technologies by researchers in academia and government, collaborating with applied research institutes, will ensure Canada’s value-added food system will remain viable for generations.
I look forward to addressing the many questions you may have on the role of Red River College Culinary Research & Innovation in the development of our value-added food sector for global markets.
Rex Newkirk, Associate Professor and Scientific Lead, Canadian Feed Research Centre, University of Saskatchewan: Thank you for the opportunity to talk about this important topic.
The College of Agriculture and Bioresources has a long history of assisting the value-added sector by developing new products and reducing processing costs. This success is largely due to a tightly linked cluster of organizations that work together toward a common goal. This would include the Saskatchewan Food Industry Development Centre, POS Bio-Sciences, Innovation Place, and many commodity development boards, commissions and centres located within the university, such as the Canadian Feed Research Centre, Crop Development Centre, Prairie Swine Centre, Canadian Light Source, and the newly opened Livestock and Forage Centre of Excellence, as well as several others.
Most, if not all of these centres, have been made possible through federal investment funds such as the Canadian Foundation for Innovation and Research, supported through various federal funding programs. It may surprise you to hear me include the livestock and feed centres in this list, but the importance of having value-added markets for all the co-products from food manufacturing cannot be overstated. A lack of markets for these products, which is often the largest volume of material produced, significantly reduces the competitiveness of the entire venture.
I am the scientific lead for the Canadian Feed Research Centre. We support developing food industries by creating value from their co-products. By maximizing the nutritional and functional values of these products, we increase the market value of these materials.
We need to remember that the animal agriculture is a value-added industry. Often low-quality co-products that might otherwise be discarded are processed to high-value animal protein, a critical contribution to global food security. It is from this context that I am speaking to you today.
There are many good examples of value-added food processing in Canada and the successful companies have marketed the full range of products they produce. Examples would include the canola processing industry, which has grown exponentially in Western Canada and retains much of the added value in the country. In this case the primary product is canola oil but it only comprises some 40 per cent of the seed.
The other approximately 60 per cent is a high-protein meal used for livestock feeds. Other value-added efforts have failed as they did not focus on achieving value from the co-products and the added costs of disposal when they did not have markets for them. This is an important point. A healthy food processing sector and livestock sector are interconnected and make each other more profitable and competitive globally.
To understand what it takes to increase our competitiveness globally, we need to recognize our relative advantages. One of these is an abundant supply of high quality ingredients produced in a clean and safe environment. This is the result of excellent plant breeding and agronomy programs. This needs to continue to be a focus.
We have reliable access to good quality water and affordable energy in the form of electricity and natural gas. There is a strong collaborative relationship between industry and academia creating opportunities for new products, increased efficiency and productivity. In addition, our universities and technical schools develop highly skilled personnel that support the growth of these industries.
Canada does have some limitations that need to be addressed. In my role as research chair in feed processing technology, I work with companies that have or are in the process of building value-added food processing businesses. I have observed a few key challenges that arise routinely.
Some issues are well known and recognized and have been the focus of government initiatives. In a country of our size which relies on export markets, reliable transportation is key. The food industry has moved to a just-in-time inventory system. It is critical that customers receive the products they need on a regular basis without disruption. Likewise, we need open and transparent borders to avoid tariff and non-tariff trade barriers. Again, our government is working diligently in these areas. It is important they continue to do so.
Perhaps the most challenging issue is the complexity and excessively slow nature of registration of feed ingredients by CFIA. At our centre we help companies get their co-products registered, as without this registration new products cannot be used in Canada. This is an extremely slow and onerous process, much more so than those of our competitor countries. Everyone agrees that CFIA plays an important role in ensuring the products we feed are safe for animals and humans. However, most would agree the current system goes well beyond that requirement and makes Canada a difficult place to do business.
Unfortunately, it typically takes two to three years for registration. Sadly, this must be completed multiple times for each ingredient. Approval of a broiler chicken doesn’t mean it is allowed for laying hens, pigs, cows or all other species. Countries must do research and apply for registration for each separately. In addition, CFIA not only requires evidence of safety but determines what they consider maximum inclusion based on production parameters, making the required studies much longer and more costly to conduct.
There is a long list of examples available, but permit me to give one. I have been assisting a local company that contracts the production of a new crop, camelina, that has some unique attributes. Until recently, the crop was grown in Canada but shipped to the United States for processing as the company did not have approval in Canada to sell the meal, which comprises 75 per cent of the seed.
In the U.S. it took only about six months to get the product approved and introduced into the feed industry. It took years in Canada, and it is approved only for laying hens and broiler diets so far. We’ve applied to include up to 25 per cent in the diet, but CFIA limited it to 10 per cent in laying hens. Commercially, companies wish to include 18 per cent to achieve Omega-3 targets, but they are not allowed and no reason was given.
CFIA typically requires three livestock production studies which must examine the long-term production data rather than just safety of the product. This can be reduced to two studies if there is significant data available from other countries where the products have been on the market for a period of time. The data is then compiled in a report and submitted for review.
Traditionally it has been taking a minimum of eight months after submission to get comments back. For our most recent application, they indicated we should hear back in 350 days with their questions. This doesn’t mean it will be approved by then. Rather, CFIA will provide questions and comments. Remember, this is in addition to the many studies required to prepare the application, which can take one to two years. This must be done over and over again to allow us to use it in a broad range of diets.
I have been contacted by several companies interested in building plants in Canada and exporting value-added food ingredients. However, when I walk them through the time and money it will take to sell their co-products in Canada, more often than not they choose to build south of the border or in Europe where the process is faster and more predictable and the markets are larger.
In other cases, I have spoken to companies that started building large plants in Canada but didn’t examine what was needed for the sale and registration of co-products until after the fact. This is a tragedy, as they will need to landfill large volumes of product or export it at great cost for several years until registration is achieved.
This not only affects the company’s ability to compete but can cause companies to fail entirely. This is unfortunate, as otherwise Canada would have the conditions to support viable and competitive value-added ventures.
CFIA has been working hard to modernize its systems and has been consulting with the industry to make improvements. However, more progress is required as, without change, Canada’s ability to be competitive will remain compromised, which will continue to discourage production in Canada.
There are many good examples of value-added food processing in Canada which have been highly successful, such as pulses, oilseeds and cereals. In many of these cases the products were grandfathered into registration and able to avoid these issues. Otherwise, they probably would not have succeeded either.
These examples demonstrate it is possible to have value-added processing in Canada that is able to compete globally. The Government of Canada has invested wisely in initiatives such as the Protein Industries Supercluster that will develop many value-added products with which Canada should be able to compete. Continued long-term, predictable investment in research is required to create opportunities in Canada. However, if we do not have the ability to sell large volumes of co-products to the livestock industry, value-added manufacturing will not develop to its potential north of the border.
Therefore it is important that we focus our research not only on the value-added food products but also on the co-products from these industries. This also supports the Canadian livestock industry as it provides it with a range of ingredients it needs to be competitive globally.
The College of Agriculture and Bioresources at the University of Saskatchewan, along with many centres within the college including the Canadian Feed Research Centre, are well equipped and pleased to condition to develop new and innovative value-added products that our industry can produce competitively. With a continued partnership and ongoing support from the Canadian government in partnership with the industry, we will be able to continue to support this important industry going forward.
[Translation]
Senator Maltais: Ms. Hill and Mr. Newkirk, welcome and thank you for your excellent presentations. Ms. Hill, are all your students strictly from Manitoba?
[English]
Ms. Hill: Yes, we are located in Manitoba and the majority of our students are within Manitoba. I am not sure about where the rest of our students across Canada come from. I can get numbers on that for you. We also have a contingent of international students.
[Translation]
Senator Maltais: What sort of diploma do students who complete the program receive?
[English]
Ms. Hill: It is a college diploma program not unlike the Niagara College program. Students who graduate from Culinary Arts receive a diploma and then go on to get their Red Seal through apprenticeship programs.
[Translation]
Senator Maltais: As you know, our committee has a mandate to study the value-added sector. In the culinary world, how do you add value to a baked potato, for instance?
[English]
Ms. Hill: There is the cooking aspect within the kitchen, but not unlike Niagara College we also work on a culinary research blended team where we incorporate the skills of culinary arts with food science programs and principles.
In terms of adding value to a potato it would be a retail food product. We would work closely with a client on developing a marketable opportunity for them.
[Translation]
Senator Maltais: Do the big grocery chains in Canada reach out to you? Do they ever seek your expertise?
[English]
Ms. Hill: We mostly work with small and medium enterprises entering the food system that are interested in product development and producing their own products to go into stores.
We have started working with some food service industries in looking for opportunities for innovation within food service, but for the most part we are working with small clients. We have worked with more multinational companies on development of food products at the initial prototype level. We work on formulation and developing prototypes. The company would then take the product and work on scale-up.
We normally encourage them to work with one of the several available food innovation centres within Western Canada or even Eastern Canada, depending on what skills are needed. They work with us on an initial level and then move their skill up into food innovation and eventually their own manufacturing or using contract manufacturers or packagers.
[Translation]
Senator Maltais: In your case, Mr. Newkirk, I wouldn’t say government red tape does anything to add value. Instead, it seems to discourage foreign investors considering the Canadian market.
Companies need to be given a chance to enter the Canadian market and to use our products for market opportunities. Do you have a specific recommendation for the committee, in terms of how to support value-added Canadian products? If I understood your presentation correctly, foreign investors face major obstacles when it comes to registration. What solutions would you recommend in that regard?
[English]
Mr. Newkirk: I guess my recommendation would be that we have a very apparent system that is predictable for the people. It is not only foreign investment coming to Canada. It is also Canadian investors in Canada and it is for converting our products. It is for everybody.
When you enter into the system right now, it is not completely apparent as to how many studies you need to do and where the end actually is because it is a bit of a moving target.
Part of the challenge is that the role of CFIA is a bit muddy. They are not sure if it is just safety, so they take a much broader perspective.
My advice would be to make sure they are clear on their process, what it is they are doing. If safety is their primary one, focus on that to make sure we address the issues clearly and the process is well defined and predictable. Then, when people make an investment, they will know they’re looking at a two-year process to get to market.
Part of that is an understaffing issue for the people that do the reviews and approvals. Every year they are approving thousands of routine registrations for feeds over and over again. It gets very onerous when every now and then we put in requests for new products to be approved. If that were narrowed, even with the existing staff, they could probably cover more ground more quickly.
[Translation]
Senator Maltais: Thank you both.
[English]
Senator Gagné: Thank you both very much for your excellent presentation.
[Translation]
Ms. Hill, first, I’d like to say how much I admire Red River College for being a visionary in its strategic pursuit of opening the Paterson GlobalFoods Institute for Manitobans. You have successfully created a dynamic environment not just for training, but also for food preparation. My hats off to you.
[English]
Richardson Oilseed announced a $30 million innovation centre in the heart of downtown Winnipeg, very close to the Paterson GlobalFoods Institute. It will have state-of-the-art technology and equipment for research and product development. We all know that food preparation is a currently growing category in world markets. Canola oil, beef, pork and chocolate are probably sweet spots for Canada actually.
Is Red River College collaborating with Richardson in developing this innovation centre? Is there a partnership between Red River and Richardson?
Ms. Hill: Thank you for your acknowledgment of the position that Red River is building in Manitoba in the food industry.
To answer your question, yes, Red River College, and particularly our culinary research and innovation program, is working closely with Richardson International on their innovation centre.
We have worked with Richardson in the past on some novel value-added product application work for them. We have been in discussion about their innovation centre, their facilities, and what kind of feedback we might have on how they set up their kitchen and what would be functional in terms of a research kitchen and prototyping. We are working with them hand in hand.
They are literally across the street from us. It’s a perfect partnership and an excellent way for us to grow the knowledge of the students in the program and their understanding that food doesn’t necessarily end in a kitchen or a restaurant. There are many opportunities out there. Richardson is a great company that has embraced the opportunities for including culinary arts and research chefs in their program and their future product development work.
Senator Gagné: I appreciated one of your recommendations to provide training to students so that they can pursue new opportunities with food R&D teams in multinational corporations located in Canada targeting export opportunities. It is very important in the agri-food sector that this is done.
Mr. Newkirk, the University of Saskatchewan has a supercluster, which is certainly great news for Western Canada.
However, there was a recently published report about the agri-food sector and Canada’s economic strategy tables. It proposes creating a network centre or hub for agri-food innovation that would connect existing agri-food innovation centres to help firms of all sizes test new products and production techniques.
Netherlands and Australia have centralized innovation hubs. Do you think Canada could benefit from a centralized hub?
Mr. Newkirk: Absolutely. It’s not an organized centralized hub but we certainly know each other. I have worked with Ms. Hill and with many of the food centres across the country. We know each other. We communicate. We send clients to each other. It is sort of there but it’s not organized in that fashion. There has been some move to do some of that with food centres. It would be nothing but beneficial.
I returned to the University of Saskatchewan three years ago to join academia. I am really enjoying the fact that we have a hub there. We have some very close networks of centres that have different levels of expertise. We collaborate and discuss routinely and share projects. We do the same thing with other universities.
You are right. We are very busy. I would like to work with McGill University, UBC and Guelph, with the best of intentions, in a system that pulled us together. It could be some sort of organized hub, as you mentioned. Then the work would not be duplicated but rather built on our own strengths. It would create some efficiencies and increase our ability to compete globally.
Senator Gagné: Would there be a role for the federal government to play in organizing the hub?
Mr. Newkirk: Absolutely. Where their role comes in is to support a centralized system which allows that to happen. The food development centres started going down that path. The federal government provided a couple of years of funding to get these people together and chatting.
I was on that board at that time. It worked out really well. We got together maybe once every six months. It was a chance to ask, “What are you up to? What have you added? How can we help each other?” Then the funding ended and we got back to our day-to-day business. We had to get our work done. We didn’t have the funds to get together in that way.
There is a role to play there for sure. There is also a role in communicating what each organization has and what our centres are. We are all so very busy that I don’t know all that happens at the University of Saskatchewan. I certainly do not know what is happening all over the country. There is a role in finding those pieces and putting them together. With value chains and roundtables, they are pulling people together. There is an opportunity in that sort of vein.
Senator Gagné: I was wondering if Ms. Hill had a comment.
Ms. Hill: I agree wholeheartedly with Mr. Newkirk. Often we are so absorbed in our work that we do not take the time to reach out. At Red River we have been working on developing a project for CAP funding. We found out some similar work had happened in one of the food centres in Leduc. We want to make sure we are building on that work and not duplicating what they have previously accomplished.
Ultimately, it would be highly beneficial if we had a chance to collaborate from the onset and take a look at the end product. What is interesting about the blended team of chefs and food scientists is that the chefs can do things with food. I am a food scientist, and they are creative in the things they do. They see a completely different opportunity for things we consider a failure because they are not meeting product expectations.
There is a really good chance to take things we might consider as failures in the food product system, redesign them and create essentially brand new product for the market.
The Chair: Terrific. Thank you.
Senator C. Deacon: I want to start with two lines of questioning. One is around intellectual property or IP ownership and the mobilization of IP in Canadian small and medium enterprises. I am certain the NSERC Engage Program is being applied in the agri-food sector as well. What is wonderful about that from the perspective of SMEs is that they own the IP. There is no issue or debate. It is right upfront.
I want to talking about that process. When you are doing product development with small and medium enterprises, from personal experience that can really slow things down from. Concerns around management and licensing of IP in post-secondary institutions can be a really big stumbling block and cause a lot of SMEs not to engage with you.
What are you doing to streamline that process?
Mr. Newkirk: I think it’s an extremely important issue. It’s personal to me as well. During my graduate studies I co-founded a technology company. We developed a few patents. We started this company and brought in external investment. Then we had our own patents.
Because of the agreement I signed with the university, the first patents were owned by the university. I ended up having to license my patents even though we paid for the patents. To be honest with you the process was painful back in 2000. The universities were thinking this would be a great cash cow and it wasn’t. To be honest with you, our negotiations with ourselves were painful. It made no sense. The universities are learning from that. I don’t know if we have completely overcome that.
Senator C. Deacon: Let’s focus on the lessons learned. What are we doing differently going forward?
Mr. Newkirk: Our innovation centres are now recognizing that we do not need to try to capture all that IP because they don’t have the resources to take those to commercial market. If we don’t allow the companies to own that IP, then they will not make the investment to take those next steps.
Developing the idea is only 1 per cent, if that. When I developed my patents I thought I had saved the world, and these people putting in millions of dollars, what are they on?
Senator C. Deacon: And it would magically make a billion dollars
Mr. Newkirk: Yes. We did end up making some money when we sold it. Now I think there is a broader recognition that is not the case.
At my institute we do commercial research. Companies come to us, we say, “Here is our agreement; what’s yours is yours. If we come up with something novel, we will discuss it with you. You will probably get it first off anyway, and we won’t even worry about it.”
We have a very open agreement. If we develop technology under public funding, the understanding is we would patent that but we would find a commercial partner early that can take a stake in it and take those materials further. It is better. It is not perfect yet.
With the system we are using at CFRC, we have one person who has his job.
Senator C. Deacon: Do you put timelines on yourself in terms of getting deals done? I have made deals with the university and it has taken six months to pay for it. Have you put internal timelines?
Mr. Newkirk: Within our own area for certain. I expect stuff to be turned around in a week or two. Maybe you are a lawyer and I will stomp on some feet here. Sometimes university lawyers take a long time to do what they do. We have our own agreements pre-approved so that at the end we can move are things more quickly.
Senator C. Deacon: It sounds like you have some lessons learned you could share with us in a very concise way and maybe document. That would be helpful because it is a challenge in SMEs engaging with post-secondary institutions.
Ms. Hill: For our programs we work under NSERC engage grants, so the companies retain all of the IP. We try to work on an agreement with them so that if something non-proprietary within the study comes out we might have the opportunity to use it as a learning tool and incorporate it into our curriculum for the students.
Senator C. Deacon: So you have access to the use of the IP in a controlled manner but they own it.
Ms. Hill: They own it.
Senator C. Deacon: That is really good news from my standpoint. I would like to move back to CFIA now. It’s a big challenge to have accountability and transparency in a regulatory process and certainty so that you know what you need to do get in and you know how long it will take once you are in.
It sounds like that doesn’t exist right now. Is there anything within their process that is evidence based from your standpoint?
Mr. Newkirk: It is evidence based. It is just that you don’t know what evidence you need until you get past the finish line.
Senator C. Deacon: The areas where you need evidence could be changing midstream.
Mr. Newkirk: Absolutely. Typically, we will review the literature. We will call CFIA and ask, “Are the studies we are proposing enough? Are we capturing the data you need to make a decision?” It’s called a pre-consultation.
They are usually fairly non-committal. They say, “Yes, we think that’s probably good.” After two years of research and CFIA sitting on it for a year, they come back with questions three years later and say they want an enzyme analysis of the tissue.
Senator C. Deacon: Could send examples to the clerk of countries that are getting it right and how their process differs from that being run by the CFIA?
Clearly, we want the public to be protected. I don’t think there is any debate on that. There are effective regulatory processes that are also predictable where you can do the work upfront and have confidence that you can get to the other end.
I would love for you to provide us with examples of what is working to potentially help us in recommendations in a pretty key area of exploiting opportunities.
Mr. Newkirk: Sure, I would be happy to. Just to make one comment on that, it is interesting when I talk to people from other areas and they say, “Oh, we have it so hard; it takes us forever. It took us six months to get this approved.”
No company is ever happy with regulation, but we need it.
The Chair: That was an interesting line of questioning. I am looking forward to getting those extra materials.
Senator Oh: My question about the supercluster initiative which our government launched in February 2018.
Could you tell us whether the superclusters increased the value of Canadian canola, wheat and pulse crops on high-growth export markets to China and India? How is the sector doing?
Mr. Newkirk: The superclusters are great news for us. One of the issues we have was mentioned by previous witnesses. Sometimes our funding is very short term for one year and two years. In developing a product and bringing products to market it takes a continuum.
Superclusters allow many groups to work together strategically for a longer period of time. A supercluster was just signed for protein funding contributions. They are just starting to go down the path. I will be able to tell you better in five years.
Canada has a very good reputation from a product perspective. In China or India we are known for very high quality materials. If you look at it from the food sector, our products are seen as safe food. There have been many food scandals in many places. In Canada, we tend to have a much more robust system.
With the science clusters it allows us to develop products that we will produce here, but many of those products will be exported. Especially with where we are at in Manitoba or Saskatchewan, we don’t have the population around us like you have in Ontario, Quebec or B.C. We rely on exports. It is key to us on that front.
Senator Oh: That is important for Asia and the Pacific Rim because the middle class is the fastest growing population base. They consume better quality food. You have built a brand for Canada of good quality and safe food.
You mentioned that you have 40 companies from Manitoba to British Columbia that produced some of the best ideas and food quality products. Could you name two or three that are doing successfully on the shelf?
Ms. Hill: I have only been at the college for about five months, so I am not as familiar with some of the products.
For the most part, we work with green-based products. We do a lot with pulses and wheat cereals. Our clientele are interested in establishing in gluten-free markets. They have established products and are now looking at doing a gluten-free version.
Some of them are underway right now so I can’t speak to them more because we have confidentiality agreements with them. That is where we are with some of those products.
Senator Miville-Dechêne: I have a question on consumer trends for Mr. Newkirk. I was a bit surprised not to read something about emerging consumer trends. People want to know a lot about how their food is grown and how their animals are treated. Consumers, not everywhere, are eating less and less meat.
Those are emerging trends. I am sure you are reflective of those. Considering those two trends, what are you doing or what are you researching to meet the new consumers?
Mr. Newkirk: I don’t know if they are necessarily new consumers. Consumers always wanted to know, but they just didn’t have the ability.
Now that they have the ability to learn more, I met with a farmer last week at a plant. He has a company as well where he puts a little sleeve on a bottle saying that the canola oil comes from his farm. It has a little story and stuff.
We will see more of that, so that people know where the product comes from. This comes back to Senator Oh’s comments. People want to know where products come from.
On the meat side you are absolutely right. People are looking for healthy alternatives. Animal products are high quality products, but we have to be cognizant of the impact of how we utilize ingredients on the environment. In the long term we recognize that we can’t abandon livestock production.
Protein Industries Canada is producing protein concentrates that will go into food products. That will be maybe 10 or 15 per cent of the seed. The rest of it has to find a home. It can’t be landfilled. That would be very irresponsible. We could take that material and convert it into livestock production, high quality meat, eggs and so on.
We recognize there is a shift in consumer ideals, but at the same time we have to recognize how we responsibly use the ingredients to their fullest extent. There are things we can’t do in our digestive system that animals can.
We are trying to look at a broader range of ingredients than we ever have in the past for livestock species. In one of my projects I am looking at how we recover when we have a disease issue with fusarium in our grain. How do we take the toxic grains out so they aren’t going into the system? Then what do you do with that material? We are feeding it to worms that then detoxify it and produce a high protein and fat. I suppose some people may eat those, but we feed those to livestock. I guess you could eat the worms if you want. I don’t think Ms. Hill wants to cook with them just yet. I hope that answers your question.
Ms. Hill: We are seeing a trend in the small and medium enterprises that are talking to us about culinary research and innovation. There is more of an emphasis on plant protein sources and novel protein sources.
I wouldn’t necessarily say that that the target of consumers is to eliminate meat from their diet. There are a few niche products we are working with that are along the vegan and vegetarianism routes.
There are really interesting opportunities in terms of synergy between animal proteins and plant proteins to draw back consumers who have shied away from a high consumption of meat. I see that at home. That is what I am doing at the grocery store too. We are probably not eating the same levels of meat as we were when I was a kid.
It seems like less of a trend and more of behavioural and cultural changes in our food. I actually think there are some interesting opportunities in terms of consumers desiring more from food. It is changing our entire culture around food and the emphasis on food.
The previous panel talked about attracting skilled work in the food industry. I think you will see it more now because people are valuing it more. In a lot of other countries like India and China they have much more of an emphasis on food. They have more relation to food and health, food and nutrition, and sources of food. We are starting to see that come back into Canada.
Senator Miville-Dechêne: My quest is about Roundup. I asked a question of Agriculture Canada. I think they are trying to study things at Health Canada.
I am wondering if you heard recently about the controversy in U.S. studies of glyphosate and Roundup. You are a scientist in a university. We use Roundup for wheat. What should we do? This is not great for the reputation of our product.
Mr. Newkirk: From a reputation perspective, sure. The levels found a very low and well within safety. Within toxicology, if we think it is not safe here, we take one hundredth of that, set it and then go below that. It is a reputation issue.
As a scientist, I recognize that we have to look at the science and understand if the consumer is afraid of it. For example, the issue that will hit us in Saskatchewan is that they use Roundup to kill weeds prior to harvesting oats. It also helps dry down the crop. It is grown in a region where these are issues. That’s where most of our oats come from that go to the mills. Perhaps consumers will say that they don’t want any glyphosate, even though the residues are in parts per billion or parts per trillion.
Senator Miville-Dechêne: I am referring to the latest study saying that the study on the toxicity of it was not well done.
Mr. Newkirk: Right, absolutely. There is lots of misinformation but the problem is the consumer doesn’t necessarily look at the second study where they say whether or not it was well done. We have a lot to do. The universities and colleges need to make sure students are well informed, that they are given unbiased information, and that they are shown the information that is out there. They should be shown both studies and have those discussions in class.
In my lectures, I try to have current issues. I haven’t talked about glyphosate because I am more on the livestock side, but certainly our people in crop science and agribusiness would do that. That is a starting point so that people going out as trained professionals have some background.
Keeping consumer confidence and doing good science need to go hand in hand. It is a difficult scenario sometimes. We have to work the best that we know and use the information that we have, but also recognizing that the consumer is skeptical. How do we ensure they get good information?
Ms. Hill: From the culinary standpoint, we have recommended canola to small businesses looking for oils, because it is a Canadian product. People who are very passionate about food and following food trends are saying they don’t want to touch canola. I don’t think they know why they don’t like it, but they know they don’t like it. The fact that there are non-GMO products on the market, they still don’t want to associate their new products with it.
It is challenging. There is definitely a disconnect in the information on the value-added food side. It depends on where you want to target those products within Canada. We are seeing small, niche companies that are looking at blends of oils and sugars. There is definitely no-goes on some oil sources. Canola is one and soya is another, and that is hard for Canada. It is very niche, but as these trends grow it will become a greater issue.
Is it something that companies like Richardson will address? It is a multi-billion dollar industries, but it may be so small that is it not on their radar as worth addressing. It is hard to say where our food systems will go and where the mentality of people will go.
[Translation]
Senator Dagenais: I’d like to thank the witnesses for being here today. I’m going to try to sum things up. Many of those appearing before the committee have cited communication as a challenge. Do both of you feel that, when people take advantage of your services, they recognize your true value?
Mr. Newkirk, teaching institutions like yours are in a position to share their knowledge with institutions in other provinces. Aside from trade secret knowledge, could any of your expertise be shared with other universities to support the overall development of the processing industry across the country?
Ms. Hill, perhaps you could answer my question about communication.
[English]
Mr. Newkirk: Absolutely. The nice thing about Canada is that we have a collaborative bunch of universities. We respect and work with each other. We are competing for some of the same research funds, so sometimes there is a tendency to try to hold back. However, we recognize that for us to go forward we need to collaborate and share information.
I am working on a new process in canola. I shared that with the University of Alberta. They have done some studies on pigs, and I am studying chickens and other animals. We not only share that information, but we encourage their students to come to my university and mine to go to theirs. That is the only way we can be competitive. We need to work together. It is not the University of Saskatchewan against the University of Alberta. It is about how Canada moves forward.
We are all busy. That is the major limitation. The truth is that we get together and chat. Many of us are colleagues. Ms. Hill and I were colleagues together, so I have no problem collaborating with her. It is a small, intertwined community, and I think that helps us.
Ms. Hill: I have only been in the agriculture and agri-food industry for about 12 years now. I’ve amazed by the number of connections I have been able to make across the country. What makes Canada truly unique is more friendly, but I really don’t know what it is.
There are a lot of opportunities, as Mr. Newkirk said. Communication and collaboration take time. We are continuing to build our R&D capabilities. The government is encouraging that collaboration. Funding programs can’t be accessed unless you are collaborating with partners and industry. Those are drivers that force that. I wouldn’t say that people are resistant to do it. It also takes its own level of coordination.
It is easy now to send an email or a voicemail to people. I am getting further with communication and collaboration than I may have in the past as my network is growing. It is very encouraging for what is in store for Canada with the work we are doing and building collaboration and communication into it.
Mr. Newkirk: The Canadian Feed Research Centre is considered a Canadian institution. We are the only one. Canada can’t afford more than one. We strongly encourage all universities to come and work at our centre. That is part of the idea that we can all work together and use our resources more efficiently.
Senator Bernard: In the interests of time, I will not ask for a response now, but I will ask Ms. Hill to follow up by sending it to the clerk of the committee.
I was intrigued by your reference to the work you are doing with Indigenous students and the research that is being done around value-added food. I would like us to hear more about that. We won’t do that in one minute, so I would like you to send us something.
Also, I would like you to consider if you have a model that can be replicated in other communities with other ethnocultural groups.
Ms. Hill: Thank you.
The Chair: That is a great suggestion.
I would like to thank our panellists. As you can tell, we could have gone on a lot longer. We appreciate your input and your promise to send in additional material to the clerk.
(The committee adjourned.)