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'Everything's on the table': How COVID-19 could change Canada's meat processing industry – Financial Post



“Big is bad.”

That’s the standard refrain Temple Grandin hears when she lectures students at Colorado State University on the complexities of meat processing plants.

Her standard retort: “Big isn’t bad. Badly managed is bad.”

For years, she has driven home this point: that even in a rapidly consolidating sector, where many small plants processing 500 head of cattle a day have been mothballed in favour of a few mega-facilities slaughtering 20,000 cows per day, high standards for animal safety and meat quality are still possible.

“Those plants can do a good job,” the animal science professor and livestock handling expert said in an interview. “The size doesn’t matter very much that way.”

But it matters an awful lot in other ways. That became clear to Grandin a number of years ago, after massive floods crippled transportation in her home state of Colorado and an ice storm devastated Eastern Canada.

The supply chain can handle one large plant being closed. But when it turns into multiple plants you have a problem.

Temple Grandin, animal science professor and livestock handling expert

“Even then, I wasn’t thinking about a pandemic,” she said. “I was thinking more of things like power failures, power grids going down, massive storms taking out a single plant. The supply chain can handle one large plant being closed. But when it turns into multiple plants you have a problem.”

Big isn’t bad, Grandin decided. “Big is fragile.”

It’s a deeply painful lesson Canada’s meat industry has been forced to learn as COVID-19 sweeps through North America and into the handful of plants responsible for the bulk of the country’s meat processing.

Huge swaths of the workforce were infected in outbreaks at Cargill Inc.’s plant in High River, Alta., and JBS USA Holdings Inc.’s plant in Brooks, Alta., requiring entire operations to shut down. As the supply chain shuddered, multinationals Cargill and JBS — controlling 70 per cent of Canadian beef processing at those two Alberta plants alone — raced to stagger shifts, outfit staff in protective gear and retrofit facilities with plexiglass shields.

The question now is whether those measures will be enough to contain the virus or if a more fundamental reimagining of meat supply chains is necessary — one that would see more automation in processing, fewer cuts of beef in grocery store coolers, an unraveling of a decades-long shift to large scale production — and ultimately higher prices.

Will the industry be changed by this? I think there’s no doubt about that

Mike von Massow, a food economist at the University of Guelph

“Will the industry be changed by this? I think there’s no doubt about that,” said Mike von Massow, a food economist at the University of Guelph. “It’ll have to change to mitigate the spread of infection between employees which is something we’ve never had to think about before. Can we do it within the plants we have? I don’t think we know that yet.”

At the core of the issue is a simple problem: COVID-19 thrives in crowds. And the quantity of workers inside each processing plant has only increased as production has become more concentrated. Indeed, just three plants — the JBS and Cargill High River facilities together with Cargill’s Guelph-based operation — now represent 85 per cent of all Canadian beef processing.

When large numbers of employees work closely together, the solution isn’t as simple as thinning shifts or telling staff working elbow to elbow to stand further apart.

A meat plant has two main parts. The “kill side” where the animal is slaughtered, bled and skinned and the “cut side” where its innards are removed and the meat is sliced, first into halves and then quarters. These “primal cuts” are then reduced into the smaller pieces seen in grocery stores — the steaks, roasts and ground beef bought in trays and boxes.

Over the years, the industry has gotten better at directing specific cuts to individual markets. Indeed, Canada exports 44 per cent of its beef, mostly to the United States but also to Asian countries where parts considered waste in North America  — kidneys, hearts, tongues and tripe — draw a good price.

But producing all those cuts requires the kind of human skill that meat processors have struggled to replace.

“The part that has the most people is the cut up,” said Grandin, who was the subject of a Hollywood movie, starring Claire Danes, highlighting her work as an animal scientist. “On the slaughter side, the people are much further apart and it’s easier to pull them apart, but on the cut-up side they’re shoulder to shoulder.”

Beef producers say delayed processing due to COVID-19 infections of workers at killing and meat-packing plants is leading to longer times for their animals on farms and costlier feeding bills.

Getty Images

Early infection control measures included reducing the number of people on each shift. But while that might slow the spread of the virus, it also slowed down “the line,” — the continuous, largely linear flow of a meatpacking plant that sees live animals arrive at one door and finished products emerge from another. With fewer people on “the cut,” the backlog of animals ready for processing swelled, leaving farmers to house and feed them for longer than intended.

That has both hiked costs for farmers and escalated the risk of the animal growing too big to be processed in the plant, where it spends much of its time hanging from an overhead chain that can only handle so much weight — a particularly vexing problem for pork farmers. Indeed, while beef farmers can slow the growth of cattle by manipulating feed, pigs grow until ultimately they’ve expanded beyond the plant’s ability to handle them.

“A normal weight for a pig to be processed is 280 pounds,” said Grandin. “Let’s say I have a 370-pound pig. I can’t put them on every hook in the plant, I’ll break the chain if I do that and shut the plant down half a day. But if I put a pig on every other hook, now I’ve cut the processing speed in half.”

While beef farmers can slow the growth of cattle by manipulating feed, pigs grow until ultimately they’ve expanded beyond the plant’s ability to handle them.

Scott Olson/Getty Images

Automation may provide opportunities to reduce the ranks of workers and slow the spread of infection. Indeed, robotic handling has done much to quicken operations in other areas of processing plants and the industry has been exploring its use for cutting operations. But here again, there are challenges.

Cattle are less genetically homogeneous than lamb or chickens, said Dave Moss, general manager of the Canadian Cattlemen’s Association. That means the pieces moving along a conveyor belt are rarely the same size or shape.

For robotic machines built for uniformity, that randomness has been difficult to overcome.

“It’s easy to automate something if the thing you are handling is always in the same position,” said Grandin. “But on the cut side, the meat’s not going to come down that conveyor always in the same position. You need people.”

There is an awareness that what plants looked like pre-COVID isn’t what they will look like when this is over

Chris White, president of the Canadian Meat Council

What about reducing the number of cuts and therefore the number of people required to produce them? Could we all learn to take a quarter of an animal and butcher it at home?

That would mean eliminating many cuts popular in other countries, eating into our export opportunities, noted Kim O’Neil, director of beef and veal at the Canadian Meat Council.

It also might not be terribly appealing to Canadians, who lack the fridge and freezer space necessary to handle large cuts of meat.

“We are seeing a lot of groups trying to educate the public on how to cook different cuts,” she said. “But a lot of what we export, Canadians simply don’t eat.”

That leads to the question of whether safeguarding the supply chain might require a more radical solution. A more distributed model, one with smaller plants, would see production spread out over more facilities rather than concentrated in just a few. That way if one plant is wiped out by infection, more would be available to backfill demand.

“It’s a valid question, I just don’t know if it’s the answer,” said von Massow.

The issue of infections, he notes, has less to do with the size of the plant and more to do with the structure of the process within it, one that relies on many workers pushed in together. Indeed, smaller plants are only valuable if they are built in a way that spaces people further apart.

“Most of the existing ones are built in the same way as the larger facilities,” he said.

Building a new meat processing plant from the ground up — one designed with infection control in mind — could cost between $300 and $400 million depending on design, said Moss. What’s more, it’s not clear that controlling the spread of infection depends entirely on what happens on the plant floor.

“The challenge is that social distancing has to happen before and after work and while you can control conditions at work, you can’t control it when people go home,” said Moss.

In addition to investing in temperature testing, cleaning and sanitizing procedures and personal protective equipment like gloves and masks, companies such as Cargill have produced educational materials for workers, translating them into up to 40 languages for temporary foreign workers. 

Though the plants are currently focused on bringing existing operations back online, “everything is on the table” when it comes to the future, including a reorganization of supply chains, said Chris White, president of the Canadian Meat Council.

“There is an awareness that what plants looked like pre-COVID isn’t what they will look like when this is over,” said White, whose organization represents all of the country’s major processors, including Cargill and JBS. “There will be a lot of discussions about automation, about whether other major changes are needed. There will be a whole-of-industry approach. But for the moment, people are just trying to get through right now.”

While any solution will cost money, a reimagined supply chain of smaller plants undoubtedly carries the highest price tag of all, Grandin notes.

“How do you process in smaller plants for the same price? You can’t,” she said. “The problem is big plants have economy of scale. Fixed costs such as buildings, water, electricity, they go down. Your cost per pig, per cow goes down. A more distributed supply chain will be more expensive. This is the trade off and there’s no way to change this. ”

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Canadian government pushes 3500MHz spectrum auction to June 15, 2021 – MobileSyrup



In light of the ongoing COVID-19 pandemic, the government announced that it has postponed the 3500MHz spectrum auction by six months.

The new date for the auction is now June 15th, 2021. Several of the other key dates associated with the auction are listed on the government’s site since they’ve also been pushed back by six months.

“Canada’s telecommunications service providers are doing their part in this difficult time, providing essential services to keep Canadians connected as we face the realities of the COVID-19 pandemic together. A number of providers have raised concerns, and the Government is implementing measures to address them,” said Navdeep Bains, Minister of Innovation, Science and Industry.

“The Government will continue to reach out to telecommunications service providers—and to the private sector more broadly—to understand their challenges and support them to ensure that Canadians have access to high-quality networks and broad coverage at low prices.”

The government’s press release from June 5th, 2020 states that this is in line with what other countries are doing. It will help the telecommunication companies focus on providing robust service to Canadians as many of us are still self-isolating at home.

Beyond this, a consultation on the 3800MHz spectrum is set to begin in August to get the ball rolling on that slice of 5G spectrum as well. Notably, both the 3500MHz and 3800MHz are considered key due to their ability to transport data at 5G speeds at a reasonable range.

In a statement to MobileSyrup, Chethan Lakshman, the vice president of external affairs at Shaw, stated, “given the pandemic’s impact on Canadian society and overall business operations, we support the decision to provide additional time for industry and the government to prepare for this auction. A well-run auction process will ensure that Canadians and the Canadian economy will benefit from strong competition in wireless and 5G for years to come.”

“Our networks are the backbone of so much of our economy and as we continue to rollout Canada’s first 5G network, driving innovation and productivity, we look forward to accessing 3500 Mhz spectrum as soon as it is available,” Rogers said in a statement to MobileSyrup.

Telus, meanwhile, sent MobileSyrup the following statement:

“While we would like to see the auction proceed as soon as possible, we appreciate the government’s recognition of facilities-based carriers for keeping Canadians connected at all times, even during the pandemic. Because of our continued investment in building out communications infrastructure, TELUS’ 4G LTE network speeds are among the fastest in the world; faster even than South Korea’s 5G network speeds, according to Opensignal. We have long been ready to make the crucial investment in 3500 MHz spectrum and network infrastructure required to realize the full promise of 5G so that Canadian entrepreneurs, businesses, and innovators can leverage the next generation of connectivity that promises to benefit us all. In the interim, we will continue to provide our customers with access to the fastest and most reliable networks possible and focus our efforts on supporting Canada’s recovery from COVID-19 in whatever ways we can.”

Update 05/06/20 4:19pm ET: Updated with statements from Rogers and Telus.

Source: Innovation, Science and Economic Development Canada

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Canada unexpectedly adds 289600 jobs on gradual reopening –



Canada’s labour market unexpectedly strengthened after two-straight months of record losses as the country gradually reopens from COVID-19 related restrictions.

Employment rose by 289,600 in May, Statistics Canada said Friday in Ottawa, surprising economists who had been anticipating more losses last month. The gains were across most industries and provinces, though largely driven by higher employment in Quebec, the province hardest hit by the pandemic.

The numbers echo recent high-frequency data, which had signaled a recovery is underway, with job postings increasing and more Canadians reporting an increase in work at the end of May. They will be a relief to policy makers who had been scrambling to inject hundreds of billions in cash into the economy to keep it afloat. Still, just under 5 million remain without work or substantially reduced hours with the jobless rate at postwar records.

“The surprisingly positive readings on employment paint a more optimistic picture of the early part of the recovery, but there’s still a long road back,” Royce Mendes, an economist at Canadian Imperial Bank of Commerce, said in a research report. “The increase in May only represents 10 per cent of the COVID-19-related job losses and absences that occurred over the prior two months.”

Unprecedented Losses

The pick up in May follows an unprecedented loss of about 3 million jobs in March and April. More than 2 million employed Canadians continue to experience much lower hours worked than pre-crsisis.

The unemployment rate ticked up to 13.7% in May, from 13 per cent in April, as people returned to the labor force. Economists in a Bloomberg survey expected a loss of 500,000 jobs, with the unemployment rate rising to 15 per cent.

Canada’s currency extended gains on the result, appreciating 0.7 per cent to $1.3406 against its U.S. counterpart at 9:46 a.m. Toronto time. Yields on two-year government bonds rose 2 basis points to 0.35 per cent.

The better-than-expected report suggests the governments programs to cushion the blow to the labor market are working. By mid-May, 179,000 businesses had applied for the government’s 75 per cent wage subsidy program. The pace of applications to Canada’s emergency income benefit program has also decelerated in recent weeks, suggesting the worst of the layoffs and job losses is over.

In addition to the employment pick up, Statistics Canada said the number of people who worked less than half their usual hours dropped by 292,000. That means the number of Canadians who have either lost their job or worked substantially fewer hours has fallen to just under 5 million, from about 5.5 million in April. Hours worked rose 6.3 per cent in May from the prior month but were still 23 per cent below February’s levels .

Cautious Reopening

The surprise jump reflects the cautious reopening of the economy across provinces. By the time the employment survey was taken from May 10 to May 16, some provinces including B.C., Saskatchewan and Quebec allowed some non-essential businesses to reopen.

Quebec accounted for nearly 80% of May’s gains, the statistics agency said. In contrast, Ontario -– where the economy remained largely shut until May 19 –- saw more losses.

In the early days of the reopening, employment rebounded more strongly among goods producers, the data show. The goods-producing sector added 165,000 jobs versus 125,000 in services. Lower-wage jobs also rebounded more, particularly in retail trade, accommodation and food services.

Women Lagging

Demographically, male employment increased more than twice as fast as that for women, consistent with the more rapid increase in the goods-producing industry. Women were among the earliest victims of the Covid-19 related job losses in March and the latest data suggest they are slower to recover as well.

“The kinds of jobs that reopened earlier tend to be more male dominated in employment and also that more women don’t know how to get back to work because they don’t know what to do with their kids because schools aren’t open,” said Armine Yalnizyan, a research fellow at the Atkinson Foundation.

Women with at least one child under age 6 showed a slower return to work than women with older children. Statistics Canada said it will continue to monitor labor market outcomes for men and women with children in the months to come.

Youth are still suffering heavily from the Covid-19 economic shutdown. While employment recovered by 30,000 for those aged 15-24, the cumulative job losses for this age cohort are still a whopping 843,000 from February to May.

–With assistance from Erik Hertzberg.

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London region sees 28400 jobs lost to COVID-19 – CTV News London



The unemployment rate in London increased dramatically in May, according to Statistics Canada.

London’s jobless rate climbed to 11.7 per cent in May, compared to 8.9 per cent in April.

It’s the lowest number of people working in London since 2003, when there were over 80,000 fewer people living in the area.

Based on a three-month rolling average, London-St. Thomas has lost 28,400 people from its labour force – and that’s just since February.

That figure includes Shannon Rumble, “Since the beginning when everything shut down, I haven’t been to work at all.”

Temporarily laid off from her job as a line cook, federal CERB payments are helping, but Rumble needs things to get back to normal soon.

“I’m a single mom, so (my daughter) can’t go to day care. My parents are helping out, but I can’t go to work if she can’t go to school or day care,” she explains.

“Its not just numbers, it’s people,” London Mayor Ed Holder isn’t sugar coating the situation, “It impacts people on a very personal level and if you are trying to make a mortgage (payment), or make sure your kids are alright, I get that.”

From the perspective of businesses, Holder says large employers who are part of his COVID-19 economic task force are balancing an urgent desire to get staff back to work, with the need to keep them safe from COVID-19.

“We will be doing business, we may just be doing it differently,” he says.

Holder predicts a moderate, consistent comeback as businesses reopen, “I am optimistic that, while I don’t think it’s a quick recovery, I think it will be steady.”

On a national level, Statistics Canada reported a record high unemployment rate even as the economy added 289,600 jobs in May, with businesses reopening amid easing public health restrictions.

The national unemployment rate rose to 13.7 per cent, topping the previous high of 13.1 per cent set in December 1982.

The increase in the unemployment rate came as more people started looking for work.

The increase in the number of jobs come after three million were lost over March and April.

The average estimate from economists is for the loss of 500,000 jobs in May and for the unemployment rate to rise to 15.0 per cent, according to financial markets data firm Refinitiv.

– With files from CTV’s Melanie Borrelli and The Canadian Press.

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