Canadian Pizza Magazine

News
CRFA’s open letter to the Ontario government


July 29, 2011
By Canadian Pizza

NEWS HIGHLIGHT

CRFA's open letter to the Ontario government
The Canadian Restaurant and Foodservices Association (CRFA) has released an open letter to the government of Ontario over its decision to spend $ 7 million enticing a foreign-owned frozen pizza manufacturer to locate in London, Ont.


July 29, 2011, Toronto – The Canadian Restaurant and Foodservices
Association (CRFA) has released an open letter to the government of
Ontario over its decision to spend $7 million enticing a foreign-owned
frozen pizza manufacturer to locate in London, Ont.

Advertisment

The text of the letter is as follows:

Dear Minister:

I am writing to you today on behalf of Ontario's $23-billion dollar restaurant industry to express our concern over your government's subsidy to a frozen pizza manufacturer. With 30,400 locations across Ontario and a workforce of 400,800 employees, the restaurant industry recognizes the importance of job creation to the Ontario economy. Representing 6.1 per cent of Ontario’s workforce, the foodservice industry employs more Ontarians than real estate and leasing, agriculture, forestry, and mining combined.

We continue to create jobs and play a key role in the underlying economy in every community across Ontario. 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. Governments should not be in the business of picking winners and losers. Your government’s announcement yesterday pits one business against the other – with a clear advantage going to foreign-based manufacturing interests.

Restaurants continue to struggle to compete under Canada’s Supply Management System that supports a two-tiered pricing system for cheese. This unfair system has created an unlevel playing field that directly benefits frozen pizza manufacturers at the expense of the restaurant industry’s fresh pizza makers who are forced to pay about 30 per cent more for the very same cheese inputs. In addition to this price break on input costs, frozen pizza manufacturers get a second break as their product escapes HST at grocery retail giving them a double price advantage at the checkout till.

Since 1989 under the 5A Special Class, frozen pizza manufacturers have had access to significantly cheaper-priced mozzarella with punishing effect on fresh pizza makers who have been denied access to fair and competitive cheese pricing. This has been a game changer for CRFA members who continue to struggle to compete with lower-cost frozen pizza products that go head to head in the marketplace.
As a result of this unfair federal policy, it is not surprising to note in today’s London Free Press article that according to the company’s own data, Dr. Oetker’s production of its frozen pizza has doubled over the last five years.

Your government’s announcement yesterday may be good news for this foreign-based multinational. However, it is precisely the opposite for CRFA members. Our members 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 as they’ve struggled through year over year loss of market share and decreasing profits, while continuing to create jobs and contribute to the very tax base that’s now being used to subsidize their direct competitors?

We ask you to join with us today in calling 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 – right here in Ontario in every community across the province.

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

Yours truly,

(original signed by)

Garth Whyte
President and CEO
Canadian Restaurant and Foodservices Association