The Canadian agriculture and food sector is a declining part of the national economy as measured by several key indicators, according to statistics released by the federal government this summer.
Even though the agri-food industry creates tens of billions of dollars worth of economic activity and employs more than one million Canadians, its overall place in the economy continues to shrink.
Farm leaders have long lamented the fact that the farm family share of the Canadian population has fallen to below three percent. It means farmers have declining electoral clout.
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Although not as dramatic, statistics point to the same trend in the economy.
A Portrait of the Canadian Agri-Food System, published by Agriculture Canada, suggests:
- The food industry’s share of the Canadian gross domestic product is falling. In 1983, the agri-food system accounted for more than nine percent of the Canadian economy as measured by the GDP and by 1998, it represented close to 8.5 percent.
- Employment in the sector is stagnant, or even slightly lower than it was a decade ago although it still represents 14 percent of the workforce when retail and food service companies are counted.
- The food portion of Canadian merchandise exports has been dropping, down to seven percent in 1998 from more than eight percent in 1992.
- Canada is much more dependent on the American market for food exports than it was five years earlier, sending 52 percent of its exports south on average between 1994-98 and 61 percent in 1999. Canada’s export expansion depends on continued economic strength in the U.S.
- Foreign investment in the Canadian food and beverage industry had grown to 8.7 percent as assets in 1997 from seven percent in 1990.
However, the study also illustrates that food exports remain a major contributor to Canada’s trade surplus with both the U.S. and the rest of the world and value-added processed food is a growing part of the trend.
In fact, beginning in 1997, the value of Canadian processed food product exports exceeded the value of imports for the first time and the gap has been growing.
And on the consumer front, it is nothing but good news. Canadians spend less than 13 percent of their disposable income on food and non-alcoholic beverages, the lowest among the industrialized countries.
According to statistics from the Paris-based Organization for Economic Co-operation and Development, per capita spending on food and beverage by Canadians is $1,200 (U.S.) . In Australia, France and Germany, it is more than $2,000.
