The food system is vulnerable to disruptions that accentuate the existing system problems. This results from the underlying rules and structures of the system. Always to be remembered is that now very few people self-provision a significant part of their diet (see Goal 1) and almost everyone is significantly reliant on the market to acquire food. So when the market doesn't function, we are vulnerable. Labour disruptions, long-distance supply chains, extreme climate events, political disputes, sudden plant shutdowns, and food safety and public health emergencies all demonstrate the system's fragility under pressure. At the core of the dilemma lies the belief among decision makers and food firms that millions of disaggregated actors, functioning over vast spaces and under the rules of advanced capitalism without any significant overarching planning and co-ordination, can adequately provide food to Canadians. The best that can be said is that the sheer number of actors means some redundancy exists in certain supply chains and this offers a certain margin of safety. In the COVID-19 emergency, firms and employees responded with creative ideas to keep goods moving and services operational, but this could only compensate somewhat for the wider systemic problems. Defenders of the dominant system argue that since there are typically only episodic shortages during emergency periods, and price increases in only a limited number of goods, the system works. To them, a kinder capitalism was on display, though critics bemoan the reality that capitalism can only be kind in a crisis. Remarkably, many agricultural economists think the system is resilient despite very significant increases during COVID in household food insecurity, which speaks to the limited ways the profession looks at the food system (see for example the March 2021 special issue of the Canadian Journal of Agricultural Economics, particularly Deaton and Deaton, 2021)). In part, it is a failure of many agricultural economists to recognize the distinction between supply chain resilience (which tends to focus on the firm) and food system resilience, a much broader conception. Firms also suffer from this failure to distinguish between their operations and behaviour and the wider ecosystem (the food system) in which they operate, expressed particularly in the elimination of buffers against supply shortages, and this failure has lead to the kinds of supply chain vulnerabilities experienced during COVID (cf. Biçer et al., 2022). Equally important is appreciating that resilience in "normal" times is not the same as resilience in "abnormal" times (Hobbs, 2021). In many ways, our food system has continued to function at the expense of vulnerable people and firms (see James et al., 2021).
Resilience and adaptive systems theory (see Frameworks, General, Resilience and Solutions), Canadian history (see Goal 2, Demand-supply Coordination, Lessons from WWII) and practice suggest the system is brittle and needs to be changed to build its resilience. If food system resilience is defined as, "the capacity over time of a food system and its units at multiple levels, to provide sufficient, appropriate and accessible food to all, in the face of various and even unforeseen disturbances” (Tendall et al., 2015:19), then the Canadian food system is not resilient. The COVID-19 emergency has shone a light on vulnerabilities that analysts have spoken about for decades.
- 1 in 8 Canadians experienced food insecurity pre-lockdown and Statistics Canada (2020) preliminary data conservatively suggest it is 1/7 post lockdown, with families with young children most at risk. Food banks have reported steep increases in demand, often in the 20-50% range depending on location (Badets, 2020).Toronto's Daily Bread Food Bank reported 200% increases in demand in fall (Jabakhanji, 2020), around the end of the CERB. PROOF (2022) now estimates food insecurity at 1 in 6 Canadians.
- Globally, the World Food Program expects acute hunger to almost double as a result of the emergency (Anthem, 2020), with many countries in Africa most acutely vulnerable. Food prices in many basic commodities have been under inflationary pressures in a number of countries, with export restrictions and stockpiling a response in some cases including Canada (Savary et al., 2020; Reuters, 2021). Disruptions to production and supply chains on a global scale are a short, medium and long - term concern (Savary et al., 2020). Global loss of employment has been estimated at 255 million FTEs and the number of additional people falling to extreme poverty is projected at 143-163 million (Clapp, 2021).
- Some emergency facilities were closed and shelters struggled to keep up with demand for spaces and food.
- Food prices are rising in Canada. A 3-5% increase was predicted for 2021 (Charlebois et al., 2020), and continuing through 2022 and beyond (Charlebois, 2021). For lower income Canadians, this is significant. For many remote communities, price increases of up to 400% have been reported, with food access problems also exacerbated by travel restrictions in and out of remote communities (CP, 2021). Some analysts conclude that these increases are partly a product of oligopolistic retail markets. Across the economy, there were price and markup increases in the early stages of COVID (Bouras et al., 2023), reflecting at least to some degree market power. In other words, governments have tolerated oligopoly in exchange for relative supply (and price) stability, a bargain upset by COVID (Ihle et al., 2020). However, for Canadians with disposable income and unable to eat out, there are some indications, through for example increases in beef consumption (Briere, 2021), that high retail prices were not an obstacle if the foods were a compensation for eating at home all the time. Internationally, a number of countries are experiencing 20-40% food price increases, including Guyana, Venezuela, Uganda, Argentina, Myanmar and Sudan, with Barbados and Lebanon more like 70% (Clapp, 2021). There is significant debate amongst central bankers regarding the temporary vs permanent nature of these inflationary pressures, with some arguing that a permanent realignment of labour and supply chain conditions is underway that will maintain higher prices for some time (Parkinson and Lundy, 2021). There is also some evidence that supply chain disruptions are increasing the perishability of some products due to distribution delays. Food may go bad more quickly in the home, resulting in food waste and more trips to the store to replace those items. This phenomenon has been named "shelflation" (Charlebois, 2022).
- Food access was compromised outside of the dominant supermarket system, as many kinds of small stores, public markets, school food programs and community-based food projects were not deemed essential and could not remain open or had to move to curbside pickup and delivery during the lockdown. This generated inequities and likely contributed to greater health problems particularly for indigenous, racialized, and low income communities (cf. Mihevc, 2020, Dale and Sharma (2021) and Feeding the City on the situation in Toronto, and other Canadian cities, see also James et al., 2021).
- Although some have reaped record gross revenues (though not necessarily net revenue because of higher COVID-related costs), many food businesses have or are failing, especially SMEs related to the food service sector. There is some evidence that these two phenomena are connnected, in that many large firms were deemed essential while smaller ones were not and these larger firms were able to capture some of their market share. Based on a survey, the Chamber of Commerce and Statistics Canada predicted in August 2020 that 60% of restaurants would close within 3 months (Wu, 2020). Fortunately, the situation has not been quite that dire but Restaurants Canada estimates 13,000 have closed and a majority of restaurants report they're losing money or just breaking even (Krashinsky Robertson, 2022). Employment in the sector dropped 27% from Feb. 2020 to Feb. 2021 according to Statistics Canada (Hannay, 2021). There are widespread reports that food service workers are not returning as the economy opens. One high end food service management company based in Toronto reported that 30% of its managers, 40% of its front-end staff and 60% of its chefs were not planning to return for a range of reasons (Brown, 2021). Many are offering extra pay and benefit incentives to get workers back (Charlebois, 2021), a situation that may have to continue longer term given a long history of low pay and poor working conditions in the food service sector. According to the 2021 federal budget, over 70% of accommodation and food businesses lost at least 20% of revenue in 2020 and this sector was the largest recipients of federal wage subsidies. Restaurant food and other input costs are also increasing. One strategy some independent restaurants are following is developing long-term relations with local suppliers to have more predictable cost structures (Edwards, 2021). Chain restaurants are more likely to emerge from the emergency than small independents, which may further distort the food service landscape in favour of food service conglomerates. Many of these conglomerates dominate the quick service sector.
- A survey of indigenous businesses in May 2020 reported that 44% anticipated failure within 3-6 months without the right supports, 38% of Inuit, 27% of Métis, and 31% of First Nations - owned business anticipated revenue declines of 50% or more. Because of unique business or tax structures, many were not eligible at the beginning for federal support. A second survey a year later found somewhat more optimism than found in the first survey, but with many negative unresolved impacts (Bull, 2021).
- Although trucking food from the US was deemed essential, flow of goods was disrupted during lockdown because restaurants and restrooms along travel routes were closed or restricted access for truckers, and repair shops were sometimes closed or slow (White, 2021). Fortunately, the US border remained open to essential functions (despite some threats to restrict goods by the US President), but 93 international governments imposed some 200 restrictions that affected trade during Covid (Glen, 2020), many since lifted. These restrictions affected both the movement of food and the movement of other inputs that are critical to how food is shipped, processed and packaged. There is some evidence though that the lifting of some export restrictions has contributed to food price increases in certain countries (Clapp, 2021). Canadian and US vaccine requirements for truckers, imposed in early 2022, are likely to exacerbate supply chain problems (Hui et al., 2022).
- Producers dependent on air transport saw supply gluts and transport price increases associated with reduced flights and additional logistics complications (Pratt, 2020). Reduced air freight has been affecting honey bee replacement as Canada depends primarily on bees from New Zealand, Australia, Chile and the Ukraine and some 80% of needed bees are unlikely to arrive because of flight cancellations. This will have a significant impact on crop pollination and honey production (Glen, 2021).
- In many cases during lockdowns, ship crews were not permitted to change because a country would not allow them to disembark and replacement crews could not travel to meet the ship (Marschke et al., 2020). The International Maritime Organization has estimated some 200,000 crew members have been so affected (Reguly, 2021). Availability of shipping containers has also been disrupted as containers were stuck on boats or ports, or restrictions altered the scheduled flow of units. To deal with problems, some companies have stopped shipping containers inland, instead turning them around immediately (60-80% are thought to be empty) to higher value markets than agriculture, particularly consumer goods ordered online from Asia (Pratt, 2021). Loading and unloading was reduced by restrictions on port workers and reduced numbers of truckers to haul goods from ports. Maritime freight rates have increased at least 200% (Charlebois, 2021) and container supply disruptions and higher charges worsened through 2021 (Goodman et al., 2021; Cross, 2021) and have only slightly eased in 2022 (Galea and Jang, 2022). The Canadian government did not impose backhaul requirements, and doesn't have the regulatory authority to impose price conditions (Pratt, 2021), unless it was to use the Emergencies Act which is unlikely in the current political environment. But these problems are an exacerbation of existing trends associated with corporate consolidation in the shipping industry, weaknesses in the just-in-time delivery model, structural inefficiencies in bookings, scheduling ad port functions, and mega ships and ports that focus on core shipping routes (Sinclair et al., 2021). Agriculture however sometimes benefited from improved domestic rail service because of disruptions to non-agricultural goods (Pratt, 2020).
- Because Canadian food manufacturers rely primarily on equipment manufactured elsewhere, particularly Europe, they are also often dependent on foreign technicians to maintain and repair equipment. It was a struggle getting such specialists in the country (Sullivan, 2021). Farm equipment supply chains have also been seriously disrupted with 12-18 month waits in some cases for critical equipment components (Lyseng, 2022).
- Canadian agricultural exports were projected early in the lockdown to drop 12-20% (Barichello, 2020). However, one year later, overall export volumes have actually increased because of international commodity-specific circumstances for 3 export commodities unrelated to COVID (Barichello, 2021), whereas other areas have suffered. There have been reports that some farm prices were depressed with falling international demand (Elleby et al., 2020), and shifts in the domestic market (cf. Fraser, 2020 on the situation for chicken producers). Some Canadian farm organizations are objecting to developing country efforts to stabilize their farm sector and assure food security by providing subsidies, arguing that they should quickly be rolled back as they will violate trade agreements (a dubious argument given existing food security provisions) and penalizes Canadian exports (Pratt, 2020).
- Canada's excessive reliance on temporary foreign workers was exposed as many could not enter the country, many workers got sick and COVID outbreaks shut down operations, especially in slaughterhouses. Workers were at higher risk because of crowded working and living conditions, and associated workplace and community spread. Justice for Farm Workers reported by the end of summer 2020 that approximately 1300 farm workers in Ontario contracted COVID - 19 and 3 died. Five more deaths across the country were reported between March and May 2021 (Weiler, 2021). Regional abattoirs were overwhelmed with orders when the large operations closed (Dekay, 2020). Food plants were also severely affected by global PPE shortages, critical because of course food plants were not designed with the need for social distancing in mind. Compensatory actions including slowing down production lines and adding extra shifts (Sullivan, 2021). All this revealed the degree to which program design was ill-equipped to provide suitable protections for workers, as confirmed by the Auditor General in her 2021 report. The 2021 federal budget proposes to allocate $58 million to help employers defray the costs of worker isolation in 21-22. The Omicron wave has also caused worker shortages.
- Similarly, already vulnerable migrant workers in international parts of the supply chain providing imported foods to Canada have also been much more at risk during the pandemic, for example seafood migrant workers in Asian fishing boats and processing plants. Supply-related disruptions have been associated with the virus spread, and restrictions on worker mobility causing labour shortages. Although demand for canned and frozen seafood products increased, demand disruptions in the fresh seafood markets more than offset the gains, resulting in economic pressures for the sector which would add to migrant worker vulnerability (Marschke et al., 2020). Seafarers in distant fishing have also been negatively affected, with COVID excerbating existing inequities and power dynamics within the fishing industries. Difficulties parallel the problems of seafarers in shipping discussed above. International protections for fishers are even weaker than for seafarers in shipping (Vandergeest et al., 2021).
- Forty percent of farmers reported labour shortages during COVID and fewer applications from Canadians. Shortages were higher than this average among fruit, vegetable and honey producers.The structure of CERB was an impediment to finding workers interested in full time work (Conference Board of Canada, 2021). Many farmers reported reducing plantings, or leaving crop in the field at harvest due to labour shortages. Across the food system, 20-30% labour shortages are being reported in early 2022, related to a combination of forces, including restrictions on TFWs, worker absences, workers leaving their employment, unsafe working conditions and vaccine requirements (Hui et al. 2022). As a result, manufacturers are cutting back production of certain goods to focus on providing the basics (Canadian Press, 2022).
- Some farm input supplies have been significantly disrupted, particularly some veterinary drugs and feed ingredients. These have provoked some rethinking of production systems by some producers, with the potential, if sustained, to reduce farm level vulnerability.
- High levels of corporate concentration and limited numbers of very large scale plants in meat slaughtering supplying much of the country meant that when a few key plants in Alberta and Quebec were closed, many producers didn't have other options for federally inspected meat slaughter. McDonald's reported importing from the US to compensate (CTV News, 2020). Livestock producers reported having to abort pregnant females and euthanize animals because they knew they wouldn't be able to move the young to markets in a timely way. Mature animals had to be held back from slaughter because of plant closures related to worker illness, resulting in over-feeding and excess weight gain. All this generated significant revenue declines for producers, some of which may have been recoverable through the federal AgriRecovery program that was bolstered by additional federal contributions (Holland, 2020). There may have been less disruption in the supply managed sectors (with somewhat lower levels of concentration and perhaps higher levels of automation in processing plants) than hogs and beef, though chicken processors were affected by their reliance on food service which generally requires more value-added processing than the retail market (Weersink et al., 2021).
- Based on a federal program through Farm Credit Canada, many farmers reported deferred loan repayments which provides short term relief, but with it comes worries about the longer term viability of a significant number of farmers affected by the pandemic (Holland, 2020).
- Because the food system for perishable foods generally runs on a just-in-time inventory approach, consumer hoarding and panic buying and transport problems resulted in orders unfilled and product shorting because the inventory control systems couldn't deal with the change in behaviour.
- Retail food sales were reported to have increased by 37% within a few weeks of lockdown, historic levels of increase (Dekay, 2020) with associated dramatic declines in food service sales of up to 70%. The average consumer food expenditure ratio shifted from 62/38 retail/restaurant % to 91/9, with the ratio post lockdown estimated at 74/26 (Charlebois et al., 2020). Many problems resulted from the loss of food service markets and the need to rapidly pivot to produce for retail, a consequence of the very specialist farm production and processing and packaging systems that target these different markets.
- Manufacturers found it was cheaper to throw out product originally packaged for food service (typically much larger units) than repackage for retail needs. Although restaurant waste was reduced due to inactivity, many perishables were still wasted from the lost restaurant markets. Milk had to be dumped (associated with lost food service markets and school closings), mushrooms destroyed, greenhouse production composted, flowers destroyed, fish from aquaculture operations destroyed and seeding plans were rapidly reconfigured. Potatoes were moved to animal feedlots because of the collapse in food service french fry sales (Glen, 2020). However, supply managed sectors were able to re-allocate production quotas to shift downward production levels (cf. Fraser, 2020) which to some extent minimized the losses. Dumping of milk in Canada was likely relatively lower than in the US because of coordination and movement of product afforded by supply management (Weersink et al., 2021).
- "Hero pay" was implemented by retailers on temporary bases and this served to highlight both the importance of many food system workers, but also the low wages in the sector (Charlebois et al., 2020). Overall wage growth for accommodation and food service has been very slight during the pandemic, at 15 cents / hour (Shahid, 2021). Retailers had to hire more people but this did not offset job losses in other precarious food system sectors, particularly food service, where 25% of positions were lost according to Statistics Canada, disproportionately affecting visible minority communities (Arora, 2021). Paid sick day programs for non-unionized vulnerable workers were only very slowly put in place, despite calls by public health authorities for provinces and companies to do so to reduce risks. The delay was in part a result of corporate lobbying against paid sick days. Provincial programs have largely been criticized as inadequate, with Yukon held up as the best, albeit temporary, program (Weiler, 2021).
- Demands for more plastic packaging of food products emerged due to fears about the virus being transmitted on food products. Heavy reliance on takeout for food service sales has increased single use and takeout containers, although how this is offset by lower overall demand for food service is not clear in Canada. However, globally, the estimate is a 250-300% increase in single use plastic because of the pandemic (The Economist, 2020) Consumer concern about plastics may have declined slightly (Charlebois et al., 2020), but there is now a shortage of plastic resins associated with high pandemic consumption of plastics for both food and sanitary paper products, and personal protective gear and this shortage is affecting manufacturing and supply chains (Bundale, 2021).
- Statistics Canada (2021) reported a 77% increase in food and beverage e-commerce between February and September 2020. The pivot to food e-commerce and food delivery may increase costs for many consumers and will certainly contribute to more centralized supply chain processes as major retailers and some large restaurant chains build large distribution centres and dedicated kitchens for delivery. Large fast food restaurant chains such as McDonald's and Wendy's were able to pivot operations and were still profitable in 2020, as was the largest food service distributor Sysco (White, 2021). SME food service operations are unlikely to be able to afford similar paths, resulting in increases in retail and food service concentration. Some major retailers are also saying they will force suppliers to pay higher fees to help cover the costs of the pivot to e-commerce.
- Mental health is though to be deteriorating (Statistics Canada, 2020), partly associated with reduced ability to gather and break bread together.
- Some municipalities have restricted hunting and fishing activities to limit COVID transmission or for safety reasons as more people have been out in the woods for recreation (see for example articles in Ontario Out of Doors Magazine). This may have impacts on some families that hunt and fish for self-provisioning purposes.
In some ways, the COVID emergency has revealed the kinds of adjustments that are likely to be imposed by other urgent problems, such as poor diets. food insecurity and climate change. Many citizens responded by focusing on local food sources and home gardening. Many farms and processors with small scale and local supply chains ramped up production and distribution in response, some of it sold online. Some input providers have had to adjust their business models as sales declined, eg. fuel and some equipment. Hunger received more attention than usual and charitable work increased (though not sufficiently to address all the need). Some reports suggest that after a period of ordering in junk and comfort food at the beginning of the pandemic (Government Of Canada, 2020), some improved their diets because they were eating at home (Statista, 2020).
Some appear optimistic that the lessons of the COVID pandemic will cause food system actors and decision makers to create more resilient systems. To what extent, for example, might manufacturers, distributors and retailers pivot more toward local food suppliers as a way to reduce reliance on long distance supply chains? Newfoundland and Labrador, producing only 10% of the food consumed in the province, has realized it's vulnerability and is even more committed to reaching a goal of 20% in the next few years (Arnason, 2020).
But the emergency has also exposed how the economically powerful are better positioned than the economically marginalized, whether food firm or individual worker or eater, so we can also anticipate that actions taken will reinforce the dominant power dynamics (cf. James et al., 2021), unless governments significantly intervene to restructure. The rationale for government intervention emerges because it is clear that many actors are operating in their own interests, as the rules of capitalism suggest they should, but in so doing, they are compromising the integrity of entire systems. Although many government programs of direct benefit to the food system and food system workers were implemented during the pandemic - e.g., funds for seafood stabilization, emergency processing, emergency food security, recovery of food surpluses, and Nutrition North totalling about $2.5 billion (Charlebois, 2021) (and that doesn't include CERB and wage subsidy benefits) - these functioned as emergency relief and in no way addressed the underlying structural vulnerabilities of the food system (see also Lowitt et al., 2022).
The pandemic has also exposed the mismatch between the global nature of supply chains and the often very regional and local decision making processes that are imposed by the Canadian constitution and historical practice (see Instruments, Constitutional Provisions). This was made very visible by the patchwork of provincial and municipal rules of pandemic response and it couldn't always be argued that the local rule making reflected distinct local realities. The constitution was written at a time when most core processes were very local and so the jurisdictional divisions reflected that. Given that the Constitution is unlikely to be modified in the near to medium term, it could be argued that the only option is to return many basic processes to more localized design to better align with legal and historical realities.
