John Ivison: Canada avoided a COVID-19 food shortage, but the shockwaves aren’t over yet

John Ivison: Canada avoided a COVID-19 food shortage, but the shockwaves aren’t over yet
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One of the few pleasant surprises to have emerged from the pandemic is that predictions of food shortages have proven overblown so far.

Immigration Minister Marco Mendicino told the House of Commons agriculture committee that 30,000 temporary foreign workers have been approved, and more than 20,000 have already arrived in Canada to help plant and seed. Officials later clarified that 35,000 permits have been finalized and 26,000 have already arrived. That’s short of the 45,000 that have arrived in previous years, but it suggests that crops will get in the ground.

When COVID-19 first hit and the government enforced a travel ban, that prospect looked remote. But Ottawa subsequently made an exception for temporary foreign workers and provided $50 million to help employers enforce a 14-day isolation period for foreign workers once they arrived.

Even if domestic production slips, we can always import our way out of the problem, said Sylvain Charlebois, director of agri-food analytics at Dalhousie University, pointing out that the loonie has mounted a comeback after falling 8 per cent in the first two weeks of March.

The worst fears about bare grocery store shelves, as global supply chains melted down, have come to naught.

Meat processing plants in Alberta, which were badly hit by COVID among their workers, are back up and running, even if at reduced capacity. Processors and farmers are finding innovative ways to compensate for the precipitous decline in restaurant business, which previously accounted for more than a third of Canadian food budgets.

The potential for disaster was apparent even before the coronavirus struck. Food prices were the biggest concern for Canadians, pre-COVID — ahead of debt, the economy and health — according to Nielsen Global Connect. One quarter of Canadians had said they could afford only the essentials and 18 per cent said they had no spare cash.

As the pandemic hit, and millions were thrown out of work, there existed the potential for food shortages and price inflation. The initial signs were not good. In the week of March 21, retail sales hit a record $3 billion, up 54 per cent on the previous year, with food accounting for 80 per cent of the increase.

Consumer behaviour and tastes changed dramatically. Over a period of 10 weeks, demand for baking goods soared 68 per cent, according to Nielsen; prepared food sales were up 48 per cent, frozen food by 36 per cent, alcohol by 33 per cent, and paper products by 52 per cent. The centre-of-store departments were favoured ahead of the perimeters, as consumers stockpiled canned goods and non-perishables.

Prices reflected this shift. The cost of a tin of baked beans rose 19 per cent between December and May, bathroom tissue by 12 per cent and canned soup by 12 per cent. In contrast, the price of apples, oranges and onions actually fell. Food inflation in April increased by 3.4 per cent, but the panicked buying of mid-March has since eased, as it has become clear that food supply chains are resilient.

“I’ve been very impressed overall by the food industry,” said Charlebois. “It is often the forgotten child, but it has been hard hit by the decline in food services and has managed to pivot in impressive fashion.”

Yet, the scare has raised the prospect of food scarcity in a population that has become complacent about the availability of healthy fare.

A poll by Charlebois’ department at Dalhousie, taken a year before COVID, found 76 per cent of Canadians felt they had enough food and did not consider access to food an issue. By May, that number had fallen to 61 per cent.

The potential for disaster was apparent even before the coronavirus struck

That the shelves continue to be stocked speaks to the sophistication and dexterity of food supply chains. Potential bottlenecks appear to have been overcome, despite border closures and the prospect of labour shortages. Farmers and processors have been helped by government aid — Farm Credit Canada has made an additional $5 billion in lending capacity available — and a partial recovery in crop and livestock prices.

Yet, the shockwaves from COVID will continue to be felt. The restaurant business will come back but not quickly. Farmers deprived of that market are using e-commerce to appeal directly to consumers. Charlebois said there are now 50 farmers’ markets online in Canada.

Globally, countries that feel themselves food insecure may restrict exports, as Vietnam did recently with rice. That move was felt in Canada, where rice prices rose 9.2 per cent last month. Canada exports more food than it imports, but our diet would likely become a lot less exotic if export controls spread. Fortunately, 42 World Trade Organization members have committed to strengthening global trading systems against protectionism.

It is a timely reminder that, for all our sophistication, all that lies between us and ruin is six inches of topsoil and a farmer.

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