The food manufacturing sector faces a severe challenge to being internationally competitive because of the rising cost of doing business in this country, says Carla Ventin, Vice-President of Government Relations for Food and Consumer Products of Canada (FCPC).The operating environment for food companies is already not competitive with their rivals in the United States, she told the Senate agriculture study on the state of the country's food value-added sector.Food processing is the largest employer in manufacturing in Canada and its more than 6,000 manufacturing facilities employ more workers than the auto and aerospace sectors combined.“Our member companies are increasingly concerned with the cumulative and costly regulatory burden,” she said. “Costs relating to energy, labour, taxes and inputs are adding additional pressure on Canadian food manufacturers.“The Trump administration has introduced attractive measures to repatriate manufacturing and Canada needs to respond,” she said. “Our members are increasingly contacted by our southern neighbours proposing attractive packages to incent them to relocate to the United States.”The best response to that ploy would be to expand and improve “the accelerated capital cost allowance depreciation in Canada to mirror U.S. rules.” Protectionist sentiment in the U.S. makes it “more important than ever to support companies to export to growing markets around the world, including Asia,” she said. “The government's ambitious and diverse international trade agenda and renewed funding for the Market Access Secretariat are important steps in the right direction,” she said.Canada needs more muscle in its food value chain. “We are already very good at exporting primary products like canola and wheat, but we do not fare well in exporting value-added products abroad. We do, however, buy back these value-added products for about 20 times the cost. When we export our products before adding value, we are also exporting the future-facing, high-technology jobs that go along with it.”Food companies want to add “value to the products that farmers grow in this country. We have incredible resources here. We have fantastic farmers. We have great technology. We have water, land and soil, so what we see as kind of untapped potential is let's not send these primary products abroad before adding value to them here in Canada.“We would like to work closely with the farmers and add value to those products and sell those value-added products abroad and then create those jobs here in Canada for Canadians,” she said. “That would also feed into the entire value chain. So it would help farmers and communities, and it would also provide incentives to grow the manufacturing sector here in Canada.”After addressing competitiveness, FCPC sees a need to support investment in innovation, R&D and capital so industry can focus on making innovative products that consumers want in a smarter, greener and more efficient way.“This requires investment in innovation, both in the development of new products and integration of new technologies in manufacturing facilities,” she said. “Investment in R&D and capital in food processing facilities has not kept pace with our international partners and we are lagging in the adoption of advanced technologies.” Cost is a major inhibiter to the integration of new technology into food manufacturing facilities.Another important step would be to support businesses adjusting to new regulations, she said. “The cumulative regulatory burden and costs facing our industry present enormous challenges to investment, growth and innovation. “Regulations for our industry have not kept pace with advanced technologies, global practices or new product innovations. While outdated regulations continue to pile up, we are now facing a whole new level of government intervention in our industry.”The federal government should establish “a coordinated approach for the agrifood sector across all departments, including coordination between the regulators and economic departments. This is important to determine the cumulative impact and consequences of regulations on both the industry that makes food and consumers who buy it.”As well, the government should modernize existing regulations before introducing more regulations, she said.The industry also deserves credit for moving “toward packaging that is a lot smaller or that can be composted, for example, a coffee pod that is fully compostable, which is a huge innovation,” she said. “Canadians look at that around the world and think that that's the type of product that they're very interested in.” The industry is also innovating on the environmental sustainability front.Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.