Food For Thought: COVID-19 Impacts on Food and Agriculture

The ongoing COVID-19 global pandemic has had a considerable impact on the maintenance and management of the Canadian food supply. As a result food, beverage and agriculture organizations may be experiencing significant operational challenges and navigating many complex issues as they seek to maintain their ability to produce and supply the food Canadians need.

This blog provides a summary of several key issues facing food, beverage and agriculture organizations, including challenges relating to business operations, regulatory measures, supply chain management, and access to labour.

Operation of Non-Essential Businesses

Across Canada, the majority of provinces have mandated the closure or minimization of non-essential, non-priority or close-contact businesses. The businesses that fall within the definitions of “non-essential”, “close-contact”, “priority” or “essential” vary from province to province. Generally speaking, however, food businesses and agriculture and food production businesses have been designated as essential or priority businesses, and may remain in operation. These businesses typically include grocery and food stores, convenience stores, pet food and supply stores, and food, beverage and food ingredient production. However, a notable exception to the designation of food businesses as essential are restaurants, which have not been deemed essential or priority businesses in most provinces and must therefore remain closed (save for low contact take-out and delivery services).

For those food businesses that do remain open, it remains of prime importance to comply with applicable food safety, hygiene and sanitary measures, and to employ requisite physical distancing practices within facilities, so as to minimize the spread of COVID-19. For those food businesses which are not permitted to remain open at this time or are subject to restrictions regarding their operation, it is crucial to remember that failure to comply with provincial and municipal level orders may result in significant fines or tickets.

Regulatory Response to COVID-19

The Canadian Food Inspection Agency (“CFIA”) holds a crucial role in the government’s response to COVID-19. The CFIA is tasked with safeguarding Canada’s food supply, and the food, animal and plant resources used within the food, beverage and agriculture industry.

The CFIA recently released guidance regarding COVID-19 related concerns for the food industry. In this guidance, the CFIA indicated that it is prioritizing critical inspections conducted by the agency, such as food safety investigations and recalls, animal disease investigations, and import inspection services, in order to ensure the continued safety of the Canadian food supply. It has also reached an agreement with the U.S. Department of Agriculture (“USDA”) regarding the import and export of animal products between Canada and the U.S., to remain in effect until September 30, 2020. Pursuant to this agreement, each of the two countries will permit approved facilities to export certain animal products, by-products and pet foods on a continuing basis until the expiration of the agreement, therefore postponing required annual inspections.

The CFIA has further indicated that it will not prioritize compliance activities associated with the July 15, 2020 coming into force of the Safe Food for Canadians Regulations applicable to the manufactured food sector. Although organizations are still encouraged to apply for a license under the Safe Food for Canadians Act, domestic manufacturers will be permitted to continue to operate while they apply for a license so as not to create delays or disruptions in their operations.

Finally, the CFIA has temporarily suspended certain low-risk activities that do not have an immediate or critical impact on the production of safe food, such as low risk surveillance and low risk labelling and domestic facility inspections. More specifically, the CFIA is permitting flexibility in certain labelling requirements for packaged foods used by hotels, restaurants and institutions in order to better facilitate the movement of these foods within the supply chain and reduce food waste.

At a more local level, food, beverage and agriculture organizations are required to comply with increased hygiene and sanitation measures implemented by provincial and municipal governments. The measures are jurisdiction specific and thus may vary between provinces, or municipalities, however, may include practices such as enhanced cleaning protocols, physical distancing in the production environment, and isolation or quarantine of workers.

Managing Supply and Demand

As Canadians spend more time at home as a result of public health orders and mandated physical distancing, demand has increased significantly for a variety of food products, ranging from pantry staples to convenience foods. With fewer meals being consumed outside of the home, maintaining a robust supply of such food products has proven to be a significant consumer priority.

The result of this change in behavior has been a trend towards stockpiling food, and a corresponding fear regarding maintenance of adequate supply. Exacerbating this is the  continuing risk posed to facilities that process and package food products, due to the threat of COVID-19 outbreak in these facilities as a result of the difficulty of maintaining appropriate physical distancing measures in mass production or factory settings. In the event of such an outbreak, such facilities may have to suspend or limit operations, therefore reducing their production capacity and the corresponding supply of the food products they produce.

These trends have resulted in frustration for many but more notably, have presented significant changes in food security for certain segments of the Canadian population. As certain food products become more difficult to access, many people without the ability to source necessary products from multiple locations or to pay increased prices (due to financial limitations, transportation limitations, or otherwise) are forced to go without those products.

Food, beverage and agricultural organizations are in the midst of responding to these rapidly-evolving trends, and have utilized a variety of means in an effort to meet consumer demand. For example, organizations have increased production capacity where possible, looked for efficiencies in supply chains, enhanced reliance on manufacturing, supply management and logistics technologies, modified packaging and storage, and repurposed or reallocated existing products. This adaptability and creativity is necessary, however, it is important for organizations to remain mindful of the regulatory environment in which they operate, which may restrict or place limitations on certain practices. As the regulatory environment is not able to adapt to the circumstances presented by the COVID-19 pandemic as quickly as would be ideal, understanding the regulation that applies to various activities and practices and how to work effectively within it is of prime importance.

Access to Labour

The ability to access labour in the production, processing and transport of food products is vital to the food, beverage and agriculture industry’s ability to maintain an adequate food supply for Canadians. Although no significant labour shortages have been reported to date as a result of COVID-19, in the event of outbreak in food production, processing or packaging facilities, inability to access seasonal workers due to international travel restrictions, or a shortage of trucking due to competing demands for transportation access, the threat of labour shortages impacting the supply chain looms.

In order to reduce the risk of labour shortages, the Government of Canada has issued an interim order exempting certain categories of foreign nationals authorized to travel to Canada to work. Included in these exemptions are temporary foreign workers who were already established in Canada, temporary foreign workers who had made arrangements to travel to Canada for work prior to the imposition of travel restrictions, and new workers travelling to Canada to work in critical industries such as agriculture and food processing. As implemented, this order allows exempt temporary foreign workers to enter Canada, provided that they pass a health check, and isolate for 14 days upon arrival into the country. For more information regarding accessing temporary foreign workers, please see our Accessing Agriculture Industry Temporary Foreign Workers blog.

On April 13, 2020, the Federal Government announced $50 million to assist farmers and food processors in managing the costs associated with mandatory isolation rules applicable to temporary foreign workers. This funding is intended to provide relief to employers in the form of $1,500 per worker employed, to offset the cost of paying workers during the 14-day isolation period. In addition, Service Canada has announced temporary modifications to the Labour Market Impact Assessment (LMIA) process applicable to employers in the agriculture and food processing sectors, providing for priority processing, extensions of validity for LMIAs and extensions to duration of employment.

Finally, on March 24, 2020, Transport Canada temporarily relaxed hours of service regulations applicable to federally regulated motor carriers and their drivers, where engaged in the transportation of certain essential products and supplies, such as food. The exemption issued by Transport Canada permits trucking companies and drivers engaged in extra-provincial trucking of these essential products and supplies to exceed the maximum on-duty and driving time prescribed in the Commercial Vehicle Drivers Hours of Service Regulations under the Motor Vehicle Transport Act, however, also imposes mandatory off-duty periods.

The above is an overview of several key issues and challenges facing food, beverage and agricultural organizations during the COVID-19 pandemic. There are, however, many additional issues that may arise or require attention based upon the circumstances of your organization. Please do not hesitate to reach out to our MLT Aikins food and agribusiness team should you require help in addressing, responding to, or managing any of these issues – we have the extensive experience to provide comprehensive assistance, and would be pleased to work with your organization to manage the impact of this pandemic.