Supercharging productivity growth in Canadian agriculture equipment manufacturing

This is the second of two posts looking at productivity in the Canadian agriculture equipment manufacturing sector.

In a previous blog post, we outlined how Productivity growth has stagnated in Canadian agriculture equipment manufacturing, and why Canada’s farm equipment manufacturing sector matters for Canada. With labour productivity growth in the sector largely stagnating in recent years and new pressures from trade uncertainty, tight farm margins, labour shortages, and rapid technological change, “business as usual” is getting harder to sustain. This second post shifts from diagnosing the challenge to focusing on solutions: the key strategies that can help Canadian farm equipment manufacturers increase productivity, strengthen resilience, and stay globally competitive.

FCC Thought Leadership has identified three practical opportunities to advance productivity in Canada’s farm equipment manufacturing sector: (1) invest in innovation and commercialization, (2) accelerate adoption of automation and advanced technologies, and (3) build enabling infrastructure. For manufacturers, each opportunity translates into concrete moves that can be started now.

Figure 1: Key strategies for advancing Canadian agriculture equipment productivity

Source: FCC Thought Leadership

Strategy 1: Invest in innovation and commercialization

Innovation is one of the most reliable paths to productivity growth, especially when it results in equipment that helps farms do more with fewer inputs. Strengthening the innovation pipeline from targeted R&D to commercialization – in areas such as autonomous machinery, robotics, electrification, and artificial intelligence - is key. Programs like Agriculture and Agri-Food Canada grants and the Scientific Research and Experimental Development (SR&ED) tax credit, can help stimulate innovation across the sector.

Collaborative R&D clusters that bring together manufacturers, farmers, startups, and research institutions can shorten development cycles and improve product–market fit. Demonstration and test environments help de-risk prototypes, strengthen the business case for customers, and accelerate market readiness.

Strategy 2: Accelerate adoption of automation and advanced technologies

Innovation amplifies productivity only when it is scaled. Accelerating adoption of automation and advanced technologies inside manufacturing operations will allow plants to increase throughput, improve quality, and reduce unit costs while supporting faster product updates.

Technology adoption also depends on people and processes. Workforce development, such as training in robotics, controls, data analytics, and maintenance, can help ensure new systems deliver consistent gains rather than creating new bottlenecks. Done well, modernization supports productivity, strengthens resilience to labour constraints, and makes firms more attractive to specialized talent.

Strategy 3: Build enabling infrastructure for productivity growth

Innovation and adoption are easier and less expensive when enabling infrastructure keeps pace. There is a need to bolster the conditions and ecosystem that allow manufacturers to build, ship, and support equipment efficiently. This includes meeting both physical and digital infrastructure needs, so that manufacturers have reliable access to the foundations that support modern, technology-intensive production.

On the physical side, this includes efficient transportation networks that support the movement of large equipment, components, and finished products across Canada and into export markets. Digitally, competitiveness increasingly depends on high‑quality broadband connectivity, secure data systems, and interoperable digital platforms that enable advanced manufacturing, supply‑chain coordination, and logistics.

When infrastructure keeps pace with technological change, manufacturers face lower operating friction, can scale innovation more quickly, and are better positioned to integrate automation and data‑driven tools across their operations.

A call to action for a prosperous future for Canadian agriculture equipment manufacturing

Canadian agriculture equipment manufacturers are well-positioned to help advance productivity growth across the sector. Progress will come from practical execution: investing in innovation that reaches the market, modernizing manufacturing operations so new technologies can scale, and strengthening the conditions that reduce friction — from connectivity to logistics. Together, these strategies can boost competitiveness, support resilience, and reinforce Canada’s role in a more productive, sustainable global food system.

Article by: Isaac Kwarteng, Senior Economist