January 30, 2024
Plant-based protein (PBP) is a major economic opportunity for Canada’s agriculture and agri-food sector, particularly for the Prairie provinces of Manitoba and Saskatchewan. PBP products pose a clean growth opportunity that can create jobs, attract investment, and increase the economic value generated by the agriculture and agri-food sectors. However, these benefits can only be realized if the industry’s major skills and labour-related challenges are understood and resolved.
Over the past year, our research team has explored the PBP opportunity in the Prairies and identified the challenges facing this opportunity. This blog post will outline the PBP opportunity for Canada and the Prairies, before diving into the three main obstacles facing the PBP industry. As for what action can be taken to overcome these issues, next week, in partnership with the Future Skills Centre, we are releasing three reports on this topic which provide recommendations on how to navigate these challenges and ensure that Canada, these provinces, and their communities can capture this clean growth opportunity.
What PBP means for Canada
Canada has a long history and solid reputation for growing plant protein crops like pulses (lentils, peas, chickpeas, etc.) and oilseeds (soybeans, canola, etc.), but these raw materials are typically exported and processed internationally. As the global population grows, so too will the demand for protein from various sources. The emergence of a wide variety of PBP products is an opportunity for Canada to expand the domestic processing of ingredients (flours, fibres, starches, and protein isolates) and manufacturing of final consumer products to retain the associated economic benefits within Canada. The Government of Canada has recognized this opportunity by making Protein Industries one of five ‘Global Innovation Clusters.’ The projected economic impact over ten years for this cluster alone is more than 4,500 jobs created and more than $4.5 billion added to Canada’s GDP.
What PBP means for the Prairies
Saskatchewan and Manitoba are likely to benefit the most from this PBP opportunity as they grow significant quantities of plant proteins and therefore, are ideal locations for processing PBP ingredients and final consumer products. This can be illustrated by the investment from private companies and the commitment of the provincial governments to creating a PBP production hub in this region. For example, the Portage la Prairie region in southern Manitoba is the greatest pea-producing region in the world by acreage, and this attracted Roquette’s pea processing plant which opened in late 2021, cost $600 million, and is the largest pea processing plant in the world. Meanwhile, three different companies announced plans to build new canola crushing facilities in Regina, Saskatchewan.
Beyond investment, research is also ongoing to innovate novel processing techniques and manufactured PBP products. Having this local capacity further encourages businesses to establish their ingredient- and/or consumer-product-making facilities close to where the crops are grown. Having more local supply chain components is considered “value-added agriculture” and is a key priority for governments. For instance, the Government of Saskatchewan’s Growth Plan aims to increase agriculture value-added revenue to $10 billion by 2030.
Ultimately, PBP products pose a clean growth opportunity for Manitoba and Saskatchewan that can attract investment and increase the economic value generated by these provinces’ agriculture and agri-food sectors.
Both the agriculture and food manufacturing sectors face persistent labour shortages that impede growth. In 2022, labour shortages caused 48% of agricultural businesses to turn down sales, and industry research suggests that food manufacturing loses out on $8.5 million in net revenue each day due to vacant positions. Exacerbating this current labour shortage are two issues. First, the workforces for both of these industries are getting older, and there are waves of retirements on the way. A closely interconnected second issue is that there is a lack of younger workers to replace these retirements. For instance, agriculture has a 3 to 1 ratio of workers over the age of 55 to workers between the ages of 25-34. This lack of replacement workers means that as more workers retire or leave the industry every year, there may not be a sufficient transition or training of skills for the incoming/early-career workers.
Skills Needs are Changing
There are several trends that are changing the nature of the work being done in agriculture and agri-food, and shifting what skills will be required of workers. One of these trends is the rapid pace of technological change in the areas of automation and digitization, and how these changes will require many new and emerging skills for PBP manufacturing. Drone flying, precision digital agriculture, factory automation, and mass data-driven analytics are becoming components of the PBP industry and Canadian businesses and workers need to keep up. While mechanization has been taking place in Canadian agriculture for decades, the rapid pace of technological change requires greater action and planning from employers and workers alike.
Another major trend is the increasing shift towards farm consolidation. Eight per cent of farm owners operate and control 38% of the farmland in Saskatchewan, and 4% of farm owners operate and control 24% of the farmland in Manitoba. At the same time, while single farm owner-operators are still a large component of the overall workforce, there has been a decrease in their percentage in MB and SK. This consolidation is causing an increased need for workers with more specialized skills and for a level of middle management capable of supporting a wide range of tasks. More workers on an individual farm leads to more specialization and the ability to benefit more from increased automation and mechanization of agriculture, both of which need more technically skilled workers.
One important consideration of these changing trends is that because of the aforementioned labour shortage, employers have informed us of the relatively lower priority given to future skills planning across the sector. We heard from stakeholders that when businesses struggle to find candidates for their current vacancies, it is harder to plan or train for changing future conditions.
Rural Location and Infrastructure
We also need to consider the rural areas where many of these businesses are located and what supports are (or aren’t) available for workers. Residents in rural areas are half as likely to find affordable housing as urban residents. Parents living in rural areas also often have difficulty finding private or public childcare spaces and regularly need to use family members or relatives for childcare. These challenges, and further issues such as access to public transportation, local amenities, and immigrant services, all make it harder for businesses to recruit workers to move to rural communities for PBP opportunities.
For businesses, there are also important capacity challenges to operating in rural areas. When looking at ingredient processing for the crops involved in PBP production, water is a primary input to the production process, but many smaller communities do not have the wastewater infrastructure capacity to handle the increased demand. All of these issues make it harder for businesses to attract and retain workers in rural areas which, combined with the existing labour shortages and lack of replacement workers, pose a major challenge to the future growth of the PBP industry.
While we focus on the challenges in this blog, it does not mean that this opportunity is lost. In our upcoming reports, Ingredients for growth, Preparing for plants, and the associated Summary for Policymakers, we expand on the issues, themes, opportunities, and challenges set out here. We explore the supply chain for all steps of the production process for PBP products, from farm to end-stage retail, and what skills and occupations are needed now and in the future of the industry. We also offer recommendations for industry, government, and educational institutions to address the challenges identified here and allow the industry to fully achieve the opportunities that PBP products present. These reports launch next Tuesday, February 6th, in partnership with the Future Skills Centre, and we hope that you take the time to read and engage with our work!