REGINA — Farm Credit Canada says there is a $12 billion opportunity in diversifying food and beverage exports to markets other than the United States.
A report released Sept. 22 said this would protect against trade disruption, make Canada more competitive and build a more resilient agriculture and food industry.
Craig Klemmer, FCC’s manager of thought leadership, said there are potential challenges when more than 75 per cent of Canada’s food and beverage products head south. That compares to 31 per cent of primary products.
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Similarly, 65 per cent of imported products come from the U.S., compared to 78 per cent for primary agriculture.
FCC president and chief executive officer Justine Hendricks said ongoing trade disruptions have created uncertainty and barriers to growth.
“Diversifying food and beverage exports beyond the U.S. will not only strengthen producers’ resilience but also benefit Canadian consumers and the broader economy,” she said.
The report recommended strengthening interprovincial trade and redirecting $2.6 billion in exports to meet domestic demand.
It said Canada must maximize benefits from its 15 free trade agreements that cover 51 countries and 66 per cent of global gross domestic product to expand its markets. As well, the country should create new international partnerships to capture high-value markets in Europe, Asia and Latin America worth an estimated $9.4 billion.
Gains could be made across commodity groups, including prepared food, vegetable oil and animal feed, FCC said. The largest category is prepared food, which currently accounts for 19 per cent of Canada’s food and beverage exports. In 2023, exports were worth $8.6 billion and 90 percent go to the U.S.
Chief economist J.P. Gervais said more balanced trade would make the agriculture and food industry more adaptable and competitive.
“Investing in infrastructure, innovation and expanding product offerings will be critical to supporting this transition,” he said.
Klemmer said the Buy Canadian movement is an opportunity to stimulate demand and build the Canadian brand.
Overall, shifting $12 billion away from the U.S. would reduce dependence on that market to half of 2023 levels, he said.
According to the report, exports around the world are increasing but most categories are seeing higher reliance on the U.S. Reliance has grown from 67 per cent in 2018 to more than 75 per cent in 2023. At the same time, global trade competitiveness has declined, with Canada falling from fifth to seventh.
Food and Beverage Canada CEO Kristina Farrell appeared before the House of Commons standing committee Sept. 23.
“The biggest challenge today for us is unpredictable access to our most important market, the U.S.” she said.
“Our supply chains are so tightly integrated that even small shocks cascade quickly.”
Klemmer said the U.S. will remain Canada’s number one market, but reducing dependency on it is important to mitigate trade disruption.
“We seem to have a strong desire to grow and to make sure that our businesses thrive, and at a time where we are right now, there’s an opportunity to do things differently,” he said.
Klemmer said the report recommendations are designed to find more balance and resilience.
It used recent trade data to establish different reduction targets for different products.
“The 50 per cent import and export reliance targets are aggregate goals, which not all sectors can — or should— contribute to in equal or event proportional amounts,” it said.
Overall, Canada would have to cut exports to the U.S. by about one-third to get to the 50 per cent target.
