Open letter from restaurant industry on Canadian Government's $12-million hand-out to frozen pizza manufacturer

TORONTO, May 24, 2012 /CNW/ -

May 24, 2012

The Honourable Gerry Ritz, PC, MP Minister of Agriculture and Agri-Food
Agriculture and Agri-Food Canada
1341 Baseline Road
Tower 7, Floor 9, Room 149
Ottawa, Ontario
K1A 0C5

Dear Minister:

I am writing to you today on behalf of Canada's $63-billion restaurant industry to express our concern over your government's $12 million subsidy to a frozen pizza manufacturer's factory in London, Ont.

Canada's restaurant owners are already disadvantaged in comparison to frozen pizza manufacturers because of unfair federal policies:

  • A two-tiered pricing system exists under Canada's supply management system. The restaurant industry's fresh pizza makers are forced to pay about 30 per cent more for the very same cheese as frozen pizza operators.
  • Since 1989 when frozen pizza manufacturers were granted access to significantly cheaper priced mozzarella under the special category 5A Class, restaurants have struggled to compete with lower cost frozen pizza products
  • To add insult to injury, frozen pizza manufacturers get a second break as their products escape HST at retail stores, which gives them a double price advantage.

The restaurant industry recognizes the importance of job creation to the Canadian economy and communities across the country.  As the fourth largest private-sector employer in Canada, the industry directly employs more than one million people -- more Canadians than real estate and leasing, agriculture, mining/oil extraction, forestry and automotive manufacturing combined.

We create jobs and play a key role in the economy in every community across Canada.  We do this without handouts or special assistance from government.  Our members are deeply troubled that your government is using tax dollars, paid by our members, as a direct subsidy to their competitors who threaten their market share and ongoing businesses viability.  This is on top of the $7-million subsidy this same pizza manufacturer received from the Government of Ontario last year.

Your government's announcement today may be good news for this foreign-based multinational, but it is precisely the opposite for CRFA members.  They are asking why is your government so ready to give multi-million-dollar taxpayer handouts to their competitors, while a "Made in Canada" policy penalizes them.

We have been asking your government for some time for a genuine review of the supply management system and the introduction of fair dairy pricing for domestic restaurant operators who are competing for their livelihood and the local jobs they support - in London, Ont. and in every community across the country.

I look forward to an opportunity to meet with you to discuss this issue in more detail.

Yours truly,

Garth Whyte
President and CEO

c.c.

The Honourable Maxime Bernier

Minister of State (Small Business and Tourism)

The Honourable Gary Goodyear, PC, MP

Minister of State, Federal Economic Development Agency for Southern Ontario

Mr. Joe Preston, MP, Riding of Elgin-Middlesex-London

Mr. Ed Holder, MP, Riding of London West

Ms. Susan Truppe, MP, Riding of London North Centre