Waking the Sleeping Giant: Canada’s $25B Agriculture Opportunity

When one thinks about industries important to Canada, the usual suspects usually rise to the top first, such as mining, construction, and energy. More recently, EV batteries, critical minerals, and the energy transition have also become part of the conversation. 

In Western Canada, agriculture is probably more commonly thought of, but it often isn’t held in the same regard as other industries. Even in my home province of Saskatchewan – often referred to as the breadbasket of the world – agriculture is, at times, glossed over in conversation.  

“Why” is a question I find myself asking a lot. 

We all need (and like) to eat, so you may think it’s something that people would care about. 

Agriculture: An Industry of the Future

Agriculture and food have been a key component of Canada’s economy and culture since confederation. It is a significant contributor to our GDP and is, in fact, the largest employer in Canada. So again, why, when governments or business leaders talk about a resilient economy or industries of the future, isn’t agriculture included?

It could be because of the antiquated images it tends to conjure up. Red barns, pitchforks, and clouds of dust. Or it could be because, for the most part, it is heavily concentrated in the Prairies, often outside the purview of decision-makers. Or perhaps it’s because people are further removed from their food, and don’t think about the highly integrated and complex supply chain that is necessary for their food to end up on a grocery store shelf or plate. 

Or perhaps it’s because agriculture is relatively easy to villainize – which it has been, repeatedly, over the past few decades. Think GMOs, carbon emissions, animal agriculture, methane, and crop protection products. In every area of the sector, agriculture has had its share of reputation battles. 

On the other hand, maybe – and this is where my money lands – it’s because it’s not going anywhere. I think a lot of people look at agriculture as a “cornered” resource. Cornered in the sense that we have land, we have farmers, and we have crops. We have the market cornered, so to speak, so we don’t need to worry about it. It’s always going to be there. 

Agriculture is the sleeping giant that no one really bothers with.

And to a point, that is true. Canada has the land, the best farmers in the world, and some of the most sustainably produced, nutritious crops. And for more than 100 years, these resources have brought great benefits to Canada. But to think that’s the end of what agriculture can offer, or to accept that what has always been, will always be, is a false narrative. 

And frankly, it’s selling Canada short. We seem to be content with the status quo, leaving an industry with massive potential and benefits just to be.

I believe it’s time to wake the sleeping giant. 

As Canadians, just as we did when this country of ours was settled, we need to put agriculture and food at the forefront of our identity and, more importantly, our economy. And that includes fully embracing ingredient manufacturing and food processing. 

We are all aware that the world is changing: geopolitical tensions, increased competition, climate change, and a growing global population. This is not the same world as even five years ago. 

And as the world changes, so must our industries evolve: the move away from fossil fuels to renewables, internal combustion engines to electric vehicles… These are examples of industries that are transitioning to be more competitive and resilient in the face of a changing global environment. 

The same must be true for agriculture and food. It is time for us to go further. 

Seizing Agriculture’s 21st Century Opportunities

For nearly a century, Canada has been a favoured trading partner and supplier of raw commodities. This legacy is both our strength and our constraint. Under our existing model, economic growth is incremental, relying largely on raising production and exporting raw goods. It’s a somewhat limiting proposition for economic growth.

First, recent growing seasons have shown that increasing yields is not always a guarantee, especially with unpredictable weather patterns causing more variability in production.

Second, the combination of transportation challenges and geopolitical tensions has, at times, hindered Canada’s capacity to maximize the value of our commodities. 

And third, when Canada sells a commodity, we sell the whole seed. And we can only sell it once. This means any other potential economic value vanishes as soon as the seed is on the boat. 

In contrast, value-added processing allows us to manufacture, market, and sell components of the seed – like starch, oil, fibre and protein – independently. Selling these individual seed components can enhance our economic returns up to fivefold compared to selling unprocessed commodities, bringing $25 billion in new economic activity and 17,000 jobs to Canada. 

If overlooked, other nations will capitalize on this potential, possibly even selling the finished products – derived from our raw materials – back to Canada. 

We are at risk of forfeiting control over a prime, sustainable asset. 

An Increasingly Hungry World

It is an unpleasant truth that food scarcity may become more prevalent in the future. After decades of surplus, we are ushering in a new era. Countries around the world are grappling with how to produce more food within the realities of today’s environment.

For Canada, this presents an opportunity. We should be a leader in a shifting global food system. 

Just as our attention has been drawn to the transformative potential of electric vehicles in addressing environmental and economic challenges, our agriculture and food sectors can do the same. By increasing ingredient manufacturing and food processing, we can also support the transition to a future powered by renewable diesel, ethanol, and a robust bio-based economy. Together, these sectors can propel Canada to the forefront of global, sustainable innovation.

While our agricultural legacy is firmly anchored in commodity trade, resting on this legacy alone will not work. 

Our reliance on a commodity-based agricultural structure is restrictive and risky. The potential lies in amplifying Canada’s stature as a global leader in the production of high-quality, high-protein crops and adding value to them in Canada by creating new high-value ingredients. The EV battery industry presented the same question – do we want to continue being an exporter of critical minerals? Or do we want to be a maker of high-value goods? 

By focusing our attention on ingredient manufacturing and food processing, we can support an economy that recognizes the evolution of the global situation and allows Canada to exploit its strengths and be resilient in the face of change.

Ingredient Manufacturing, Food Processing, BioFuels, and Protein Innovation 

Ingredient manufacturing, food processing, and bio-products are industries of the future. They represent the needs of an evolving global population and a changing world. The need and demand is only going to increase. Few countries have our potential. By making ingredient manufacturing and food processing a priority, we can contribute to a stronger, more productive and prosperous Canada. 

To capture the opportunity ahead of us, including $25 billion in new economic activity, Canada must:

1. Focus on innovation and support the commercialization of IP: Government must make sure agriculture and food are a priority area of investment for current government programs and de-risk the commercialization of new technologies in value-added agriculture. 
   
   
2. Create an enabling regulatory environment for plant-based food, feed and ingredients: While regulations to ensure food safety must remain a priority, we can also take steps to support business growth through our regulatory environment, such as creating efficiencies so the timelines of Canadian novel food regulations and policies align with other jurisdictions.  
   
   
3. Support the development of critical infrastructure: The growth of Canada’s ingredient manufacturing, food processing, and bio-fuels industry requires access to new and increased infrastructure. From foundational (ports, intermodal transportation and cold chain) to utilities, research and development centres, and scale-up facilities, we need to invest in the infrastructure to support the sector’s growth.  
   
   
4. Establish new markets for plant-based foods and ingredients domestically, and more importantly, internationally: Canada’s high-value ingredients can be an important element for countries looking to solve for food security. By shipping high-value ingredients over raw commodities, Canada can capture the extra money and jobs generated by processing here.  
   
   
5. Create new incentives and sources of capital: Ingredient manufacturing is capital intensive, and reaching the goal of a $25 billion industry will necessitate the construction of 10 to 15 new processing facilities and $6 billion to $9 billion in investment. Canada needs to be creative and aggressive in attracting capital investment. 

The Time is Now for Canadian Agriculture

I believe the path forward is clear. Canada needs to get serious about the opportunity ingredient manufacturing, food processing, and biofuels offer us. Not only is it an industry that offers significant economic growth, but it can also be a solution for the climate, affordability, and food security challenges facing our country and many more. It is time to give our agriculture and food industry the respect and attention it deserves.

For more information, visit www.theroadto25billion.ca