How Canada’s fragile food supply chain is being disrupted

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Thinly stocked produce shelves. Handwritten signs apologizing for empty freezer racks. Customers shopping for certain items, and leaving with a hodgepodge of substitutions.

A mounting number of disruptions have wreaked havoc on the country’s food supply: everything from extreme weather, to labour shortages, to the pandemic. The result, as already evidenced in parts of the country, has been some supply shortages and temporary grocery-store closings.

For most Canadians, however, these disruptions will translate into fewer options, rather than actual food shortages. With the exceptions for those in rural or remote areas, or especially vulnerable communities (including those on lower incomes), experts say most Canadians will have food on their tables. And at least some of the panic has been misplaced – one of the recent highly circulated images of a bare grocery shelf, for example, was because of a product recall.

Still, the situation highlights yet again the vulnerability of this country’s food system – one that has already shown signs in recent years of tremendous strain.

Because our food system is so tightly calibrated, any one problem can result in massive food shortages across the country, said Evan Fraser, director of the Arrell Food Institute at the University of Guelph. He pointed to last week’s threat on produce supply, after the delayed arrival of thousands of temporary foreign workers.

“Delaying them by a few dozen days – that’s all it takes to tip our system into chaos?” he asked, letting out a long breath.

“We’re in trouble.”

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With the current supply shortages, many stem right from the source: At farms and food plants.

Weather has been an issue. Severe flooding in B.C. late last year devastated large swaths of farmland in the Fraser Valley. That region, a major supplier of Canada’s poultry, dairy and produce, had already been hit by wildfires earlier in the year and continues to operate at reduced capacity. And recent winter storms have caused further disruptions that continue to ripple across the country.

At the same time, farms have been hobbled by other supply chain issues: difficulty accessing seeds and feed, and the increasing cost of fertilizer.

But the issue that’s loomed above all else has been labour.

COVID-19 outbreaks have resulted in significant disruptions at farms, where agriculture workers often live and work together in close conditions. Earlier this month, the Windsor-Essex County Health Unit in Ontario, where much of Canada’s greenhouse produce is grown, temporarily banned the arrival of new agricultural migrant workers because of outbreaks. The decision was rescinded later that week.

Food plants have faced similar problems. Even before the pandemic, food plants were operating with a 10-per-cent labour shortage, in large part because of an aging work force. Once the pandemic hit, that rose to 15 to 20 per cent. Now, with the rapid spread of Omicron, the shortage at food plants is about 30 per cent, said Food and Beverage Canada CEO Kathleen Sullivan.

“There’s a lot of pressure on workers who are still here, in terms of overtime, additional stress for them,” said Ms. Sullivan. “The industry is very much at a crisis point.” She and others in the industry have been lobbying Ottawa to put in place an emergency program to allow for a quicker process to bring in more foreign workers.

Part of the labour shortage is because food workers who left their jobs at the beginning of the pandemic are making the decision not to return to those same jobs. And part of that choice, said Prof. Fraser, is because of the working conditions and low pay.

“We don’t compensate the people we rely on the most in this society,” he said. “Expecting large numbers of people to stock the shelves, drive the trucks, plant the asparagus, pick the apples, prune the orchards for almost no money – for not even enough money to live on, is crazy.”

Ms. Sullivan acknowledged that in the long term, the industry needs to look at many other solutions: automation, skills training – and reassessing compensation.

“Obviously whatever we’re doing right now – we have to do something radically different, because it’s not getting us where we want.”

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Transporting food, too, has been a challenge.

Severe weather and pandemic-related policies have resulted in gridlock along critical roadways, and long delays at the country’s ports.

The most recent development is Ottawa’s decision to impose a vaccine mandate this month on truck drivers entering Canada at the U.S. border. The U.S. is expected to implement a similar policy this week. An estimated 8,000 to 16,000 Canadian truck drivers are expected to be affected.

This puts into jeopardy Canada’s access to much of the roughly $26-billion worth of food imported from the U.S. every year. About 70 per cent of that is brought to Canada on a truck.

“We were able to keep the essential flow of goods, medical supplies, of food, flowing back and forth across the border,” Prime Minister Justin Trudeau said earlier this week, defending the decision. “We will continue to make sure that we are getting what we need in Canada.”

Still, critics say we’ll likely see a shortage of drivers. Even before the surge of Omicron, the trucking industry was facing one of the highest job-vacancy rates in Canada, with almost 23,000 driver positions unfilled as of the late summer.

“We are starting to see a very competitive market for those vaccinated drivers,” said Canadian Produce Marketing Association president Ron Lemaire.

Over the past week, the rates for those truckers has increased between 30 to 50 per cent, said Mr. Lemaire. And because transporting fresh food can sometimes mean additional hassle (for example, when delays cause fresh produce to become unsellable) he said drivers are now turning down those routes.

“We’ll get product into the store,” said Mr. Lemaire. “It’s just going to take longer, it’ll cost more, and we’ll see potential reduction in the diversity of product.”

Yousef Traya has seen those product limitations in his store.

Mr. Traya spent Wednesday trying to find bananas. But even though the owner of Bridgeland Market in Calgary approached three separate produce suppliers, none had any to sell to him. He is also facing shortages of other items such as oranges, dairy products and some oils. Other deliveries arrive only partly filled.

“I’m on the order desk this week trying to place orders, and I can’t,” Mr. Traya said. “… It’s getting to the point where now, if you want the product, you pay. The highest bidder gets it.”

All of the problems at earlier points on the supply chain are coming together in a perfect storm, and playing out on grocery-store shelves, said Retail Council of Canada spokesperson Michelle Wasylyshen.

“Labour shortages, lack of available testing, weather events, packaging, processing, global supply chain issues. It’s a whole host of issues,” she said.

The Omicron variant has resulted in grocers reporting labour shortages of up to 20 per cent at larger chains, and 25 to 30 per cent at independent grocers.

Some stores have had to shut down sections of their stores for portions of the day. Others have cut down on the number of cashiers. In a few rare cases, stores have had to shut down for a day or two.

Giancarlo Trimarchi, co-owner of small Ontario grocery chain Vince’s Market, said that inflation is his biggest concern right now. Grocery stores typically operate on thin profit margins, meaning they cannot absorb higher costs from suppliers. “A price increase is going to pass through in our industry,” he said. “There’s no margin to take.”

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Despite this, retailers emphasized that the problem isn’t food availability, but rather, availability of options.

“You may not be able to get everything you want, but it’s not like the shelves are going to be empty,” said Gary Sands, vice-president of government relations for the Canadian Federation of Independent Grocers. “We don’t need to see a return to panic buying. That doesn’t help anyone.”

At the outset of the pandemic, Sylvain Charlebois, the director of the Agri-Food Analytics Lab at Dalhousie University, also urged against panic buying, declaring his confidence in Canada’s food system.

But in recent days, that confidence has begun to wane.

“The shortages we saw in March, 2020 were demand-induced,” he said. “This time it’s really about the supply chain.”

He said Canadians have been well-served for food for many years. But he warns that in the coming weeks, Canadians will need to adapt.

But for Prof. Fraser, the problem extends well beyond the next few weeks.

To him, recent events have only highlighted the underlying faults of our system: our vulnerability to extreme-weather events in the time of climate change, our reliance on low-paying labour, and dependence on transporting food across long distances.

If we weren’t already so vulnerable, he said, we’d be in a better position to defend against each crisis. Instead, each shock is felt as an earthquake.

“Do we want to be dealing with this conversation every six, 12 or 18 months?” he asked. “Or do we want to do the harder work to address some of these systemic things?”

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