Canadian food processors fear thousands of jobs will be lost if Ottawa passes a law that would force changes to food packaging regulation.

The Food Processors Association of Canada says any changes will increase American imports into Canada and over time put food processing and agricultural jobs at risk.

The intent of the changes is to deregulate packaging sizes so they can be the same size on both sides of the Canada-America border.

"This change would put food processing in Canada at a competitive disadvantage because it will require them to adopt American sizes and formats," Food Processors of Canada president Chris Kyte said.

Food processors in Canada will be forced to decide whether to reinvest and retool plants in Canada or move production to the United States.

Currently, Canadian sizes for maple syrup, wine, honey, sandwich meats, bacon, canned and frozen fruits and vegetables are different than those sizes in America.

Meagan Murdoch, spokesperson for Minister of Agriculture Gerry Ritz, said the changes are intended to improve Canadian food safety.

She openly admitted package sizes "do not affect food safety in any way."  But, because packaging regulations fall under the Canadian Food Inspection Agency (CFIA), streamlined sizes will free up inspectors to focus on allergy labelling and food inspection elsewhere.

"We’ll be focusing attention where it matters; stuff that could impact someone’s health in Canada," CFIA spokesperson Guy Gravelle said.

Last spring the government made the announcement on page 219 of Budget 2012.

"The Government will also repeal regulations related to container standards to enable industry to take advantage of new packaging formats and technologies, while removing an unnecessary barrier for the importation of new products from international markets."

Changes not legally required

Murdoch said Canadian food processors are not required to retool their plants.

"I think they are concerned they may have to adapt. And we’ll work with them closely and give them time to adapt," Murdoch said.

Murdoch food processors who want to retool could apply for federal funds, "if they want to change their system to become more innovative and competitive."

They could do so through the AgriProcessing Initiative (API), part of the Agricultural Flexibility Fund announced in Budget 2009. The initiative is designed to enhance the competitiveness of the agri-processing sector in Canada.

Deregulation of package sizes will allow American producers to send product to Canada.

Deregulation distorts the market in favour of imports and confuses consumers, the Food Processors Association of Canada said. Standard packaging allows Canadians to do accurate price comparison shopping, it said.

American package sizes tend to be smaller which may initially create the impression of better value at a lower price, but that is frequently not the case, the association claimed.

"Maybe when they send that up, consumers prefer it," Murdoch said of smaller sizes.

According to the Alliance of Ontario Food Processors, direct employment in the food processing sector hit 127,000 in the province in 2010, outpacing the auto industry.

Murdoch isn’t concerned about job loss in Canada, though.

"There are transportation costs, too," she said of shipping from the U.S. to Canada.

Conservative Essex MP Jeff Watson said he has spoken to Ritz.

"As I understand it ... the concern is not justified. I’m not sure that they ought to be concerned," Watson said of food processors. "It’s to ensure we’re competitive on a go-forward basis."

Watson said the change is part of the omnibus bill that will "establish job creation and prosperity."

The food processors association claims that in the last five years more than 80 food processing plants in Canada have closed with many moving production to larger American plants and those in Mexico.

Far-reaching effects, mayor says

John Paterson is the mayor of Leamington, Ont., the tomato capital of Canada and home to a major Heinz Canada plant.

He said the changes affect more than food processors. Paterson said there is only one company in Canada that supplies metal cans to the Canadian food processing industry. That is Crown Metal Packaging in Chatham, Ont.

The plant manager there confirmed that, but had no comment. Crown vice president of corporate affairs Michael Dunleavy, who is based in Philadelpghia, wasn’t available for comment.

"Even if Sunbrite Canning were to close their doors, that [Crown] can factory will close, putting those people out of work," Paterson said.

The United Steelworkers Union, which represents workers there, didn’t immediately return a call placed by CBC.

Paterson claims Ottawa did not consult with the majority of Canadian food processors and that the initiative is being pushed by Campbell's and Nestle in the U.S.

Candian Food Inspection Agency spokesperson Gravelle disagreed and said the government has been considering the change "for years."