Food: feeding some needed manufacturing growth to Canada’s economy

Canada’s agriculture and agri-food sectors continue to lead manufacturing growth in the Canadian economy.

And there’s even more promise of great things to come according to a report from the Advisory Council on Economic Growth. With the world’s food consumption expected to increase roughly 60% by 2050, the global supply must respond. And who better to do that than Canada, with its world-leading production, and export history based on a storied reputation as a producer of safe, high-quality food?

Food and beverage manufacturing a consistent bright spot

Canada’s food and beverage exports have nearly doubled over the past 10 years. In 2016, they reached $33.5 billion, up from their $18.4 billion total in 2007. And over the past 20 years, food and beverage manufacturing grew over 40%. That’s four times the rate by which Canada’s overall manufacturing sector grew in that same period.

Not even the financial crisis impacted Canada’s agfood sectors to the same extent it hurt other manufacturing sectors. The strong loonie and softening export markets at this time hit the overall Canadian manufacturing sector particularly hard, but made a much smaller dent in food manufacturing:

On the basis of its ability to weather the storm, food and beverage manufacturing grew as an overall proportion of Canadian manufacturing. Between 1997 and 2007, it accounted for nearly 13% of the manufacturing economy. Since 2008, the sector has increased to comprise 16% of Canada’s total manufacturing economy.

Annual growth in food and beverage manufacturing has averaged 1.9%, more than twice that of all manufacturing at 0.7% over the past 20 years (1997 to 2016).

Importance of food and beverage manufacturing consistent across all provinces

Neither does it matter where in Canada the sector is at work. Food and beverage manufacturing is an important contributor to each provincial economy.

In 2015, food and beverage manufacturing accounted for 1 to 5% of each province’s overall economic growth. It also accounted for no less than 14.6% of the total manufacturing GDP in Ontario and Quebec – and a whopping 53.1% of PEI’s total manufacturing GDP.

The world needs more food, and as global growth makes it possible for more people to increase their calories and to diversify their menus, the opportunity for Canada is one well within our grasp. We’re already a global leader as both producer and exporter of ag-food. It’s not a stretch to imagine that leadership responding to the growing demand for safe, high-quality food with an even larger presence in world markets.

Craig Klemmer
Principal Agricultural Economist

Craig joined FCC in 2009 as an Agricultural Economist, specializing in monitoring and analyzing the macroeconomic environment, modelling industry health, and providing industry risk analysis. Prior to FCC, he worked in the livestock branch of the Saskatchewan Ministry of Agriculture. Craig holds a Master of Agricultural Economics degree from the University of Saskatchewan.