Ottawa-Canada is at risk at losing ground among agrifood exporting countries because of its overdependence on sales to the U.S., says a report from RBC Thought Leadership
Canadian products now account for 20 per cent of U.S. agrifood imports making this country vulnerable to President Trump’s threatened tariffs, the report said.

Meanwhile Canada has slipped to 7th from 5th place among global agrifood exporters and could drop to 9th by 2035 if corrective measures are not taken. Emerging agrifood competitors like Brazil have gained ground in Africa and the Middle East, while traditional rivals like Australia are gaining market share in Southeast Asia.

If it makes the right investments, Canada can increase its global share from 3.7 per to 4.8 per cent to regain 5th place in exports, says modelling done by RBC and the Boston Consulting Group’s Centre for Canada’s Future. “That could add $44 billion to agriculture and agri-food’s export value by 2035.”

Accomplishing that will require a clear plan that focuses on innovation, investment, export-oriented infrastructure, digital infrastructure and overseas agrifood promotion, the report said.
Agrifood has transformed from a bulk commodity supplier to the country’s largest source of manufacturing. It now is “a dominant foreign supplier to America’s grocery aisles and dining tables, as Canadian farmers and producers have become more advanced in developing new food products and marketing them to Americans.”

Canola and potash are leading examples of the growth from which both countries benefitted. “The U.S. has had priority access to Canada’s production and processing that has a comparative advantage for products including prepared cereals and vegetable oils. Canada’s large production base in the Prairies, as well as the scale and proximity of manufacturing and processing hubs in Ontario and Quebec, have been key to the large inflows of investment capital in recent years.

“In addition, consistent, high volumes and a lower dollar have propped up Canada’s ability to be a preferred importer. Historical growth in the efficiency of Canadian farms and food processors has further strengthened Canada’s position as a reliable and efficient place to source agriculture and agri-food products from.”

Canadian food manufacturing has increased its value-add ratio by 72 per cent between 2014 and 2023. Trump’s tariffs will make Canada a less desirable trade partner to the U.S. “Food and beverage manufacturing may also struggle to maintain investment levels, as one of its biggest selling features has been its preferential access to the world’s largest market.”

The sector will have to accept the tariffs or search for customers elsewhere. “Thanks to decades of export growth—ahead of most of Canada’s economic sectors—our agri-food sector entered the 21st century as a productivity leader. But with so much focus on the U.S. market, many Canadians didn’t realize that the rest of the world was catching up, and in some categories, overtaking us.”
Canada has lost market share in two-thirds of the sectors that make up agriculture and agri-food trade, the report said.  Key markets to watch are Southeast and South Asia and India.

Australia, New Zealand and Brazil are among the countries that have expanded their agrifood exports. Average annual growth in trade volume was 2 per cent between 2016 and 2025, slower than 3.45 per cent in the previous decade. “A key factor driving the slowdown is a deviation from a rules-based system, making way for protectionist-like policies.”

Agrifood often bares the brunt of such policies “given the political importance of food prices and also the political power in many countries of food producers. Average tariffs by a World Trade Organization member charged on an agriculture product is 14.8 per cent compared to 8 per cent for non-agriculture products.”

This news item prepared for National Newswatch