Underinvestment and facilities operating at capacity are holding back the growth of the Canadian food processing sector at a time when it should be expanding, says Mathew Wilson, Vice President, Policy and Government Relations with Canadian Manufacturers & Exporters. While it's one fastest growing components of Canadian manufacturing, food processing “is only scratching the surface of what is possible,” he told the Senate agriculture committee. The sector has “tremendous untapped potential.” Food manufacturing “has historically underinvested in technology and productivity and has greater potential for growth if we can drive investment,” he said. “In the last five years, the value-added food processing sector has grown by 21 per cent, almost twice as fast as the sector as a whole. “This growth has happened despite machinery and equipment spending in the food process sector peaking in 2014 and declining ever since, much like the rest of the manufacturing sector. We need to reverse this investment slide if we want to see continued growth.” The federal government can do a lot to encourage the sector, he said.   It needs to create a competitive business environment, establish globally competitive investment support programs and develop private sector controlled export concierge programs to link SMEs to government services, introducing an export tax credit for companies actively growing exports. There should also be a Made in Canada promotion campaign for use at home and abroad and greater focus on free trade agreements and related support programs on agrifood exports, he said. Food processing facilities are operating “at capacity with little room for additional growth,” he said. “In manufacturing terms, max capacity of facilities is roughly 80 per cent, with the excess time needed for repairs, maintenance and product changes. Today, Canada's value-added food sector is running at over 88 per cent capacity, which directly limits and constrains growth. “Simply put, without new investment and capacity, there is no room for growth, and this holds back Canada's potential,” he said. Another drawback is the sector's predilection to focus on the domestic market rather than aim at serve the “much greater markets globally where Canada can succeed. “While value-added food exports have roughly doubled in value over the last decade, there is more room for growth. By comparison, Canada's auto sector accounts for roughly 15 per cent of manufacturing output and 22 per cent of all value-added exports. The agri-food sector accounts for 15 per cent of output as well, but only 9 per cent of value-added exports. So the sector is roughly the same size and scale as Canada's auto sector but exports less than 40 per cent of the total.” Canada needs to make good use of its reputation for high quality and safe food products to expand global sales and growth at home, he said. “This is especially true at a time when emerging markets are rapidly growing their middle classes and are looking for exactly the products Canadian companies can offer to global customers.” Canada needs to reduce the cost of doing business and encourage growth and production through tax and regulatory reform to match comparative jurisdictions, he said. It should financially assist businesses “with planned expansion, technology adoption, product innovation and commercialization, including an expanded accelerated cost to capital allowance program to support investment. “Canada has the potential to be a food manufacturing super power, one that is driven by innovation at home and can provide world class products to customers all over the world,” he said. “We have the resources and capabilities that almost all other countries can only dream of. We should be aiming for this goal and we hope the work of this committee will help set us down this path.” Value-added food processing is one of Canada's largest and most important manufacturing sub-sectors, reaching a record total output of $103 billion in 2017. The sector makes up 15 per cent of all manufacturing activity in the country and employs more than 227,000 Canadians. Most Canadian food business are dwarfed by European and American companies, he said. “We're talking about an average company size of less than 10 employees; 95 per cent of all manufacturers across the country have fewer than 20 employees.” That means they have very limited internal resources to begin exporting products, he said. “They're mostly family-owned, run by the person who developed the food product, and they really struggle to understand what's going on in global trends. They understand how to invest. They struggle in how to invest in the right types of technologies that would suit their companies, also how to invest in developing new markets internationally.” 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.