THE AGRICULTURAL AND AGRI-FOOD SECTOR IN CANADA
- Audrey Calligaro
- Mar 26
- 6 min read
Updated: Mar 27
Canada's agriculture and agri-food sector is not only a vital pillar of the economy, representing 7% of the national GDP, but also a fertile ground for innovation and entrepreneurship. By 2023, the entire agriculture and agri-food system employed 2.3 million people. It offers countless opportunities for those who wish to establish themselves and thrive in a dynamic environment. Quebec and Ontario stand out for their unique specialties and their commitment to sustainable production. As the world seeks responsible food solutions, Canada is positioning itself as a leader, ready to welcome companies willing to help them meet the challenge.
Food service providers, along with food retailers and wholesalers, are the link between food production and consumers.
Focus on Quebec and Ontario
These two provinces play a key role in the Canadian agricultural and agri-food economy, with dynamic sectors that illustrate the diversity of production.
Quebec
The dairy sector is the largest in the province, generating revenues of $2.8 billion. This industry is supported by the Supply Management system, established in 1971, which guarantees high-quality local production while ensuring stable incomes for producers. This system uses quotas to balance supply and demand, thus avoiding product surpluses. In Canada, the supply management system covers milk and dairy products; chicken; turkey; table eggs; and hatching eggs (for chicken farming). Pork production, with $1.7 billion in revenue, and poultry, representing $957 million, are also pillars of Quebec agriculture, benefiting from the same support mechanisms.
Ontario
Ontario, for its part, also sees the dominance of dairy products with revenues amounting to $2.5 billion. This sector is closely followed by vegetable production ($2.4 billion) and soybean production ($2.1 billion). As in Quebec, the dairy and poultry industries (eggs, chickens, turkey) are also governed by the Supply Management system, which allows producers to benefit from stable remuneration and import controls, thus guaranteeing protection against fluctuations in the international market.
These two provinces, thanks to their regulatory structures and resources, contribute significantly to Canadian primary agriculture, which includes nearly 190,000 farms on 62.2 million hectares, representing 6.2% of Canada's territory. The average farm size has nearly doubled over the past 50 years, highlighting the importance of technological advances and consolidation in the sector.
Sources:
https://www.saskmilk.ca/dairy-farming-in-canada/canadas-supply-management-system/ https://agriculture.canada.ca/en/sector/overview#s5
Primary Agriculture in Canada
Agri-food processing
The food and beverage processing sector in Canada remains the largest in terms of GDP and employment, with sales reaching $167.5 billion in 2023. The provinces of Ontario and Quebec are home to the majority of processing establishments.
International Trade and Sustainable Growth
Canada continues to be a major player on the international stage, exporting nearly $99.1 billion in agricultural and food products in 2023. The United States remains the largest trading partner, accounting for 60% of Canadian exports.
Challenges and Opportunities
Canada's agriculture and agri-food sector is distinguished by its resilience and growth potential, supported by abundant land and water resources, as well as strong research and development capacity. Canada's reputation for environmental stewardship could also strengthen demand and prices for its products on the global market.
Do you have a project in mind or want to learn more about our services? Get in touch today for a free consultation with one of our experts
Sustainable Development Initiatives
Canada is positioning itself as a leader in sustainable food production and processing. Several initiatives are being implemented to strengthen the sector's sustainability:
Reducing GHG Emissions : The Canadian government has launched programs to reduce greenhouse gas (GHG) emissions in agriculture, including subsidies for the adoption of sustainable agricultural practices.
Water Resource Conservation : Projects have been implemented to improve water use efficiency, particularly in areas where the resource is limited.
Promoting Biodiversity : Supporting biodiversity, particularly through crop rotation and wetland conservation, is a key element of sustainable development initiatives.
The Latest Technological Innovations
Technological innovation continues to transform the agri-food sector in Canada, with a particular focus on improving efficiency and sustainability:
Precision Agriculture : The use of sensors, drones, and GPS technologies allows farmers to optimize the use of inputs, thus reducing costs and environmental impact.
Biotechnology : Advances in biotechnology, such as the development of disease-resistant crops, are improving the resilience of farms.
Advanced Food Processing : New technologies, such as precision fermentation and 3D food printing, are being explored to create healthier food products.
The 2021 study of Canadians' attitudes toward innovative agricultural technologies revealed growing support for technologies such as biotechnology and genome editing, despite low overall awareness of these concepts. Canadians are particularly supportive of making biofuels from non-food sources, and a majority believe that cellular agriculture could contribute to long-term food security. These shifts in perceptions could facilitate the adoption of sustainable agricultural solutions in the future.
Economic Outlook
Farms in Quebec and Ontario are benefiting from positive economic prospects, supported by growing demand for local and sustainable products:
Farm Revenue Growth : In Quebec, dairy, pork, and poultry production remain the main economic contributors. In Ontario, crop diversification contributes to stable farm income.
Infrastructure Investments : Both provinces are seeing increased investment in agricultural infrastructure, including processing facilities.
Access to International Markets : Ontario and Quebec benefit from strong demand in international markets, supporting prices and encouraging increased production volumes.
In 2023, net cash income from the Canadian agricultural sector reached a record high of $24.8 billion, up 13% from the previous year, mainly due to growth in livestock receipts. However, forecasts for 2024 indicate a 14% decrease in net cash income, which is expected to reach $21.3 billion, due to the expected decline in crop receipts and a slight increase in operating expenses. Despite these challenges, net cash income is expected to remain 28% higher than the 2018-2022 average.
Consumer Behavior and Trends
The snapshot of green consumer habits in Canada highlights Canadians' significant concern for the environment and climate change, with 80% valuing sustainable living. Approximately 70% of consumers seek out sustainably produced food, although price remains a major barrier, with 51% of respondents finding these products too expensive. Sustainable packaging is also a priority, with over 90% of Canadians concerned about its environmental impact. Additionally, 50% of consumers report purchasing more sustainable products than they did five years ago.
The 2023 survey of Canadians reveals a significant increase in concerns about food affordability, with 80% of respondents expressing concerns, a 29% increase from previous surveys. Regarding knowledge of the sector, only 50% of consumers feel well informed, while 71% are concerned about food waste. Despite these concerns, trust in Canadian farmers remains high, with 87% of respondents expressing confidence.
This snapshot of consumer perceptions of environmentally sustainable foods indicates that 70% of Canadians seek out these products, primarily based on sustainability labels. However, trust in these labels remains limited, with 75% of consumers believing they are often used for marketing purposes. While Canadians value criteria such as health, taste, and price, they want more information on labeling systems and sustainability standards to make informed purchasing choices.
Qualitative research conducted by Agriculture and Agri-Food Canada showed that both consumers and producers view sustainable agriculture as essential, although their understanding of the concept varies. Consumers struggle to identify sustainable practices, while producers point to misinformation within the sector as a barrier. The findings highlight that consumers prioritize criteria such as price and quality, and while they express interest in sustainable practices, few are willing to pay more for eco-friendly food. Furthermore, consumers living in remote communities feel limited in their choices, highlighting their reliance on local, sustainable food sources.
Industry News
Agrotourism: Focus on Local Products
Agritourism is experiencing significant growth in Quebec and Ontario, offering new economic opportunities for local producers.
Innovative Partnerships : Agricultural producers are increasing collaborations to promote local products, thus attracting tourists and boosting sales.
Promoting Local Products : Agritourism highlights local products, strengthening regional identity and consumer loyalty.
Diversification of Activities : Farms are diversifying their activities by offering unique experiences such as farm tours and tastings.
Food Processing: Reinventing for Greater Efficiency
The food processing sector in Canada continues to transform to meet new market demands.
Product Innovation : Companies are focusing on innovation to create healthy products, including plant-based foods.
Eco-responsible Packaging : Reducing plastic waste and using sustainable packaging materials have become priorities.
Opportunities and Challenges
Opportunities
Abundant Natural Resources : Access to vast agricultural land and water resources.
Growing Demand for Sustainable Products : Consumers favor environmentally friendly companies.
Technological Innovation : Adoption of precision agriculture and biotechnologies.
Challenges
Skilled Labor Crisis : Shortage of skilled workers due to an aging population.
High Production Costs : Input, energy and labor costs are increasing.
Climate Change : Increasing impacts on crops, requiring costly adaptations.
Conclusion
Despite the challenges facing Canada's agriculture and agri-food sector, its strengths and innovations offer exceptional growth potential. Sustainability, innovation, and market diversification are essential to ensuring the long-term competitiveness of farms.
Looking ahead, several emerging trends are shaping the sector landscape: regenerative agriculture, which aims to restore soil health and biodiversity; the growing use of advanced technologies like artificial intelligence and precision farming, which optimize yields while reducing environmental impact; and a growing demand for sustainably and ethically sourced food products. These developments present not only challenges but also unprecedented opportunities for entrepreneurs looking to establish a foothold in the Canadian market.
Did you enjoy this article? Discover our other resources on international development and market trends to help you further your project in Canada!
Don't miss our next sector analyses and updates! Subscribe to our newsletter to receive exclusive advice and the latest trends straight to your inbox.
