A new report from Export Development Canada (EDC) stated that Canada’s agriculture sector has emerged as a rare bright spot in the country’s trade performance, with agricultural exports growing three times faster than overall Canadian exports over the past decade.
In practical terms, this means agriculture has been one of the few sectors pulling its weight in Canada’s trade economy, even as growth in other industries has slowed or stalled.
According to the report, agriculture accounted for roughly 11 per cent of Canada’s exports, seven per cent of economic output. It supported 2.3 million jobs, or about 12 per cent of total employment, when related industries such as food processing, distribution and finance are included.
Between 2008 and 2017, Canadian agricultural exports grew at a compound annual rate of nearly five per cent, peaking at $65 billion in 2017.
Over the same period, overall Canadian exports grew at an annual rate of just 1.4 per cent, making agriculture one of the strongest-performing export sectors in the economy.
EDC noted that Canada is among the world’s largest food producers, particularly in plant-based products such as wheat and pulses, which together make up the largest share of agricultural exports.
Vegetable products accounted for 44 per cent of total agricultural exports in 2017, followed by food products, beverages and tobacco (25 per cent), live animals and animal products (24 per cent), and fats and oils (seven per cent).
While primary agricultural products continue to dominate exports, the report highlighted strong growth in processed food and beverage products, which recorded the fastest export growth over the period studied.
These products contribute more value to the economy by supporting higher employment levels and greater demand for Canadian-made goods and services.
Canada’s agricultural trade remains closely tied to North American supply chains, particularly in livestock and meat processing, but export markets have become increasingly concentrated.
In 2017, the United States, China, Japan and Mexico accounted for 76 per cent of Canadian agricultural exports, up from 70 per cent in 2008.
The report noted that rapid growth in exports to China helped drive overall gains, but also exposed Canadian producers to risk when access to markets was restricted.
At the same time, EDC said there are signs of gradual diversification. The dollar value of agricultural exports to countries outside Canada’s top 10 markets increased by $1.5 billion between 2008 and 2017, and several new markets entered the top tier over that period.
Agricultural exports continue to exceed imports, generating consistent trade surpluses for Canada.
A trade surplus in this sector means that Canada has sold more agricultural products abroad than it buys from other countries. This means there’s more money coming into the economy than being sent out.
In 2017, net exports of agricultural goods reached $17 billion, compared to a low of $9 billion in 2009. This contrasts with Canada’s overall trade balance, which has mostly remained in deficit since the global financial crisis.
Despite strong export performance, the report identifies “low levels of international investment” as a key weakness in Canada’s agri-business sector. This means Canadian agri-food companies are more likely to sell products from home rather than produce or process closer to overseas customers, which can significantly limit growth in higher-value markets (such as exports of several types of processed foods). Both foreign investment in Canadian agriculture and Canadian investment abroad remain limited in this sector.
Looking ahead, EDC points to opportunities for growth in organic products, grains, pulses, seafood, and horticultural goods, driven by rising global food demand and population growth.
With the global population expected to reach nine billion by 2050, the report suggests agri-food trade will remain a critical pillar of Canada’s economy.
For Canadian farmers and agri-food businesses, the report suggests that while exports are a strength, future growth will depend largely on diversifying markets and capturing more value from the food Canadians already produce.
