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It’s Time to Consider a Food Safety Tax Credit


Making Preventative Action a Priority

While Canada has an excellent system of food safety, recent crises and product recalls have given food safety a high public profile -- raising the question of whether  government and the food industry are investing sufficient financial and human resources to adequately address complex risks.

Investing in food safety is the right thing to do but it doesn’t typically give processors improved efficiencies, strengthen sales margins or result in increased market share.  It is a preventive action that should be a priority but is not always top-of-mind for food processors facing other critical investment needs.

Investment Required

In order to respond, government and industry need to work more closely to enact practical food safety regulatory oversight matched by industry investment in the infrastructure, equipment, and technology required to meet the rising expectations of customers, regulators and consumers.

A  Practical Response

Implementing a time-limited federal food safety tax credit would provide a simple, uniform, national financial incentive for food processors of all sizes, in all commodity sectors and in all regions. Similar to the Scientific Research and Experimental Development tax credit (SR&ED), it would allow certain companies to earn a credit of 35 per cent on the first $3 million of qualified expenditures for food safety investments, and 20 per cent on any excess amount.

Investment Tax Credits are an effective way to influence the economic choices of businesses and individuals in support of government policy objectives. It would help reduce the cost of investments without constraining the choice of technologies or services. It also applies regardless of which jurisdiction has regulatory responsibility for the plant and doesn’t have the limiting and bureaucratic features of grant programs.

This proposed Food Safety Initiative could also help reduce government expenditures in health care costs associated with food borne illnesses while assisting the Canadian Food Inspection Agency streamline its operations.

It’s Time

Canadian food manufacturers are under financial pressure, trying to reduce operating costs to survive in the short-term while modernizing and scaling up plants to grow over the long term. Given the challenges facing Canadian food processors , it’s time for a food safety tax credit  that would provide a straightforward incentive to help firms keep food safety a high priority as critical business decisions are made.

To get more information on this timely proposal, contact myself, Andrew Raphael, Director of Agri-Food Services.

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