Canada and Foreign Direct Investment’s Role in Feeding the Future
- Value-added products with specific ingredients and health attributes are going to become increasingly important in a world improving on sustainability.
- The agricultural sectors in Saskatchewan and Canada have proven to be early adopters of new technologies, enabling them to adapt to new challenges.
- Provincial and federal government assistance and programs have been key in making Saskatchewan a robust environment for innovation and investment.
Collaborations among the public sector, private sector, institutions, farmer-led initiatives, and academia have been key to helping the agricultural industry in Saskatchewan innovate and adapt. Moving forward, Saskatchewan will need to continue capitalizing on these partnerships, along with the robust assistance and guidance of governmental policies and regulations, in order to become more attractive to foreign investment.
What competitive advantages make Canada, Regina, and Saskatchewan attractive for foreign direct investment in agri-food?
Canada is an agriculture powerhouse. We are a huge agriculture exporter. In Saskatchewan specifically, we have more than 40% of Canada’s farmland here so we are also a big part of that giant system. Saskatchewan is the world’s largest exporter of peas, lentils, durum wheat, canola, mustard, flax, and oats. It is pretty phenomenal what we are producing for the world. We also have Canada’s second-largest cattle herd. If you combine Saskatchewan’s production with Ontario, Alberta, and other large agriculture producing provinces, it is pretty phenomenal what we produce in Canada. We are big and we are a powerhouse.
“Saskatchewan is the world’s largest exporter of peas, lentils, durum wheat, canola, mustard, flax, and oats.”
Number two is we have a long-standing reputation of being early adopters and focusing on innovation, specifically in Saskatchewan, but in other places in Canada as well. In particular, Saskatchewan has a strong ag-bioscience cluster with a really interesting mix including the private sector, public sector, non-profit sector, and industry-led portions of the bioscience cluster that help to catalyze investment and bring products to market. If we think about that in combination with some of our academic capacity both at the University of Saskatchewan and the University of Regina, as well as some of key infrastructure investments in things like the Global Institute for Food Security, Canadian Light Source in Saskatoon, and Innovation Place in both Regina and Saskatoon, these are all key for making Canada a great place for agriculture and food as well as a place to attract investment.
“The full value chain is really coming to bear in making us a powerhouse.”
We also have the Protein Industries Canada (PIC) Supercluster that is stationed out of Regina, and we do have this rich ecosystem that includes partners that are private-public, industry-led, and farmer-funded commissioned, so the full gamut and the full value chain is really coming to bear in making us a powerhouse.
The other thing I want to mention that is really important is the regulatory and policy climate that needs to be established by government. In Canada, the Agri-food Economic Strategy Table that was chaired by Dominic Barton, set out some very lofty goals for agriculture with a focus for Canada to become even stronger in agriculture and even more focused on agri-food exports. What is key there is that the federal government has the right kind of policy and regulatory climate in place to allow that to actually occur and the goals to be achieved. This is key, though I am not sure we are seeing all the signals that we need to see right now but it is key that they absolutely get that right.
In Saskatchewan, the government is a great example of setting that regulatory and policy climate. First of all, they understand agriculture, and second of all, they are very supportive of agriculture and do all they can to encourage the right kind of regulations. They are very science-based and business-focused, and they have put programs in place to support that whether it is with tax incentives or small government programs to support agriculture investment, as well as a really strong focus on investing in research and innovation.
How has COVID-19 impacted the Saskatchewan agri-food industry, and what has been the response from the federal and provincial governments in support of the industry?
COVID-19 has impacted the food supply system in Canada and the agriculture and food sector specifically, but our sector responded and reacted very quickly to ensure that we continue to have safe and adequate food supplies on grocery shelves. We were impacted, but we responded very well.
The government in Saskatchewan provided very quick response with programs to help buffer and support the industry through some of those rapid changes. We also saw some federal government programing to assist with that too, whether that be employment interruption support or business interruption support, and some of those programs continue on.
“Our sector responded and reacted very quickly to ensure that we continue to have safe and adequate food supplies on grocery shelves.”
Clearly, the Canadian agri-food sector responded very effectively when you consider the level of exports that continued. For example, the infrastructure of our railways absolutely delivered the goods. While we had a very brief interruption, we continue to set record grain movement and record exports despite the challenges of the pandemic. It is pretty impressive for the Canadian industry.
What risks and opportunities do you see in the global trends impacting Canada’s agri-food sector?
We know that the population growth challenge is ahead of us when we talk about having 10 billion people by 2050. Some pretty challenging times are ahead for the agriculture industry to make sure that we feed the world. We are well-poised to absolutely be able to deliver. We know that innovation is going to be key in this and that we are resource-rich here in Canada, in particular for agriculture land-based innovation giants. For us, it is access to all the tools and technologies that we know are available to us and that will be innovated on in the future. Having a proper regulatory and policy climate to allow the industry to feed the world is going to have to happen through innovation. We have the land resources here and producers who are innovation-focused, and we do know that it is key for governments to have the right kind of policies and regulations.
“Having a proper regulatory and policy climate to allow the industry to feed the world is going to have to happen through innovation.”
It is a constant challenge for farmers to deal with a changing climate but in light of increased environmental pressure because of climate change, we need to make sure that we are doing all we can to get more crop per drop, that we are innovating, and that we are making sure we make the best use of our water and soil while taking care of the environment. In this, Canada is a model. We are world-leading sustainable producers, and we are taking good care of our environment. We are socially responsible in the decisions and the practices that we are using, and we are well placed to meet those challenges. There are lots of opportunities ahead whether you look at just providing bulk goods to the world’s population or value-added goods that have higher protein, higher quality, and particular ingredients that those consumers around the world are now demanding.
What areas of Canada’s agri-food industry are you most excited about and in which areas is Canada leading?
Because I am a farmer and perhaps also because I am from Saskatchewan and have seen it firsthand, I am very excited about the agriculture and food sector moving ahead. We are a giant producer of safe and nutritious food which is sustainably produced. Canada dominates already in agriculture and food production and we should become even more dominant in world markets in this way. Further value-added products with specific end uses, ingredients, and health attributes are really going to make a difference in the world.
We have demonstrated that we are early adopters of new technologies and we know we can meet the challenges. In particular, I have three success stories that I would really like to focus on that speak to this excitement for the future. Zero tillage equipment, which is farm equipment that was invented here in Saskatchewan, has become world-standard. We have now transformed the way we farm here in Saskatchewan but across Western Canada and in fact, we have exported it to all dry-land production around the world. We are world-leading and really focused on sustainability as well as conserving soil and moisture while also capturing carbon. It is a great success story, showing we are really focused on innovation.
“Further value-added products with specific end uses, ingredients, and health attributes are really going to make a difference in the world.”
Secondly, canola has improved through new crop breeding technology along with investment from the private and public sector as well as through brilliant people. We have been able to attract them to the west. Between Saskatchewan and Manitoba people, they have really developed canola as a healthy oil crop, and it is now the gold standard in the world. Canola is our second success story.
Third is our pulse crops. Just over 40 years ago, we did not even grow pulse crops in Saskatchewan but because of some really great industry-government collaboration, and again, brilliant people, Saskatchewan is now a world-leading exporter of pulse crops like lentils and peas.
These three success stories are great examples of why I am so excited about the future because I know we can innovate, be early adopters, and collaborate among private and public sectors, farmers, and industry associations to make a difference and become global leaders in other ways beyond those three quick examples I mentioned.
The other thing that is really important to talk about here is the excitement that I see regarding youth who see a future in agriculture and food careers. I saw this trend the last few years where there was a heightened interest in agriculture and food, but because of the pandemic and this focus on food, safe food, and adequate food supplies, young people are starting to see great opportunity in agriculture and food. Of course, attracting the best and the brightest young people to the sector is really something that excites me.
What role will the supercluster play in the sector’s development, and are there opportunities for foreign companies to get involved?
The PIC Supercluster is a great collaboration funded by the federal government but matching industry funds. It is focused on investing collaboratively to accelerate innovation and seek commercialization of products and advancements of companies that are already players in the sector, making us increasingly competitive in the plant protein sector. As a major global producer of plant proteins, Canada is going to benefit from PIC’s investments to make alternative protein sources that much more important to global food customers. We will be one of the best and most innovative in the world.
“As a major global producer of plant proteins, Canada is going to benefit from PIC’s investments to make alternative protein sources that much more important to global food customers.”
Foreign investment is going to be key here as well. We know that PIC is going to fund companies to become new players or bigger players in the sector. This means that those companies will become even more attractive for foreign investment because it will really put them in the window. Sometimes, agriculture is a story that we have not told as well as we could have. PIC really helps to put a focus on plant protein, and puts a focus on Canadian companies so that others can see the attraction of that investment and that is why PIC will have a double benefit: seeing Canadian companies succeed because of the investments that are being made, but also attracting more investment from foreign interests. This will not just attract investment but also connect us out into the world to future customers.
What other government incentives or supports are available for foreign direct investment in Saskatchewan and Canada?
In addition to Saskatchewan’s competitive climate that has been set because of our strong regulatory and policy role that the government plays, Saskatchewan has one of Canada’s lowest corporate income tax rates, which is highly competitive and attractive, whether that be for Canadian investment or foreign investment. We also do not have payroll taxes. Specifically, we also have programs like the Saskatchewan Value-added Agriculture Incentive, which is a tax rebate on capital expenditures. We have a Saskatchewan Lean Improvements in Manufacturing program, which provides funding assistance for adoption of best practices and new technologies. We have a Product2Market program that promotes the development and expansion of businesses. We also have the Agriculture Development Fund, which invests in research. There is a Saskatchewan Manufacturing and Processing Investment Tax Credit that is in place, which would be for foreign investment coming in. We have the Saskatchewan Commercial Innovation Incentive, a patent box which lowers the corporate income tax rate to 6% for income earned from commercialization of new patents, and we also have a 10% refundable tax credit for research and development expenditures. All of these are very much focused on investment whether that be Canadian investment or foreign investment. That overall climate of being open for business that Saskatchewan has set out means that we are an attractive place for investment. Invest in Canada is also very helpful for foreign direct investment. All of this in partnership with federal or provincial government programs is really going to make a difference in attracting investment into Saskatchewan.