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New study shows Canada is losing ground in essential consumer health supply chains
Created on 3/17/2021 8:50:03 AM

Written by Michael Graydon, CEO of Food, Health & Consumer Products of Canada
Published on January 14, 2021

As we face the remainder of a dark winter in the grip of worsening COVID-19 infections, vaccine approval and distribution around the world have offered some light at the end of the pandemic tunnel. Yet, these hopeful developments have simultaneously revealed some painful lessons about missed opportunity — lessons we should take to heart while we have time to strengthen manufacturing and supply chains for all essential health products. 

While some countries are prioritizing domestic vaccine manufacturing and distribution, Canada has virtually no capacity to manufacture vaccines to scale. Pharmaceutical manufacturing has unique constraints, but the outcome is sadly similar to patterns that weaken other essential supply chains.

Decades of government neglect, notoriously high costs of doing business, and Canada’s unnecessarily restrictive regulatory environment have hollowed out our pharmaceutical industry and manufacturing capacity. The example should present a stark warning that, unless we course-correct, similar conditions will produce the same result across other essential sectors, including consumer health products.

According to new analysis conducted by Deloitte on behalf of Food, Health & Consumer Products of Canada (FHCP), Canada is losing ground, fast, in this critical sector. Compared to global counterparts, Canadian consumer health executives are twice as likely to abandon new product innovations, three times more likely to expect significant future increases in regulatory costs, and six times more likely to say high costs of doing business are restrictive.

The impact on Canadians is staggering. Canadians can wait up to ten years longer than consumers elsewhere for innovative, safe consumer health products approved for sale across our borders and around the world. The unit cost to produce consumer health products in Canada is more than 70% higher than in the United States, the United Kingdom, and Australia — costs that are partially borne by Canadian consumers.

These findings reinforce previous FHCP analysis showing that Canada attracts less investment and supports less innovation than other countries. Our 2020 executive insights survey, for example, found that just 25 percent of food and consumer goods executives polled expect to expand production in Canada, and 50 percent are actively exploring opportunities elsewhere. 

FHCP has warned repeatedly of the barriers stopping the nation’s largest source of manufacturing jobs from reaching its full potential. While we have seen progress on some key issues, such as moves to prevent grocery giants from bullying and shortchanging their suppliers, more work is needed.

Canada must act now to reduce costs, support innovation, and remove unnecessary barriers to growing the consumer health product sector that makes the over-the-counter medicines and natural health products Canadians rely on every day. Taking better care of ourselves is key to Canadians’ health and to the sustainability of our publicly-funded healthcare system during the pandemic and beyond.