‘A wake-up call’: Report urges agri-food export diversification amid tariff threat

The Canadian agriculture industry needs to expand its international exports to hold its own against U.S. tariffs and global competitors, according to a new report from RBC.

Amid the looming tariff threat, the report says Canada’s agriculture and agri-food sector is vulnerable as more than 60 per cent of its exports go to the U.S.

It argues Canada has become too reliant on the U.S. for those exports, and over the years has become a dominant supplier for American grocery stores.

For instance, about 96 per cent of Canada’s canola oil went to the U.S. in 2024, while Canada also supplies the vast majority of potash for American farmers.

As a result of the growing relationship, Canada’s agri-food manufacturing sector quietly became the country’s largest source of manufacturing, the report said. Both countries have benefitted from their strong trading relationship.

But these advantages are now in jeopardy.

Tariffs on agriculture and agri-food products will make Canada a less desirable trading partner to the U.S. relative to other low-cost producers such as China and the Netherlands, the report said.

“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.”

On the global stage, Canada is falling behind, with rivals like Brazil and Australia gaining market share in key markets, the report said. That means there are opportunities for diversification.