Deregulation of food package sizes: for whose benefit?
After years of pressure from U.S. manufacturers, the federal government intends to repeal the law that regulates the sizes of packaged foods sold in Canada. This change would put businesses that process food in Canada at a competitive disadvantage, as it would require them to adopt American sizes and formats. Deregulating package sizes will have two results: 1. The Canadian market will be flooded with U.S. product in a multitude of sizes. 2. Investment by Canadian food processors will be diverted from safety and innovation to retooling production lines, to compete against imported U.S. sizes. What every stakeholder should know: The Canadian government is changing its regulations – without prior consultations – to make it easier for American companies to import, but is doing nothing to help Canadian firms to compete. This action will force companies to make investment decisions. Do they invest in safety and innovation in their Canadian facilities? Do they retool production lines for new package sizes? Or, do they invest in new U.S. production facilities where they have access to lower cost inputs and no border delays? Canada used to have a trade surplus. But now, we have a $6.5 billion trade deficit with the U.S. because many American-owned companies have closed their plants and shifted production to the United States and Mexico. Since 2007 more than 80 plants have been shuttered, leaving 13,000 workers across Canada unemployed. Here are the facts: • • Canada and the United States regulate differently. For 50 years, Canadian package sizes have provided a level playing field and a stable investment climate. New investment that would otherwise be better spent by Canadian processors on safety and product innovation to gain a longterm competitive edge and deliver meaningful consumer benefit – not just retooling for American container size – will be diverted. Food processing plants buy regional fruit and vegetables to ensure quality, reduce costs and support local farmers. If production leaves Canada, Canadian farmers will lose market opportunities – both domestic and export sales. Communities lose out as well. When Hershey closed its Smiths Falls facility in 2007, the town lost the 400,000 tourists that came to visit the chocolate factory annually. Product diversion is a growing problem. Some U.S. companies divert nonstandard and stale-dated products into the Canadian marketplace using Canada as a dumping ground. The federal government does nothing to prevent this. The government’s proposal will reward those companies which have closed their Canadian plants, and have moved to the United States and Mexico. Deregulating consumer protection while ignoring the need for a complete package of reforms will have a major impact on innovation, investment, and job creation in many small Canadian communities.

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