The world wants Canadian food

Part 1: Mapping a $12-billion trade diversification opportunity

Global demand is creating new possibilities for Canadian agriculture and food businesses, particularly in Europe and Asia.

The latest Canada-U.S. tariff dispute is another reminder that even our closest trade relationships can face disruption. 78% of Canada food and beverage exports are destined for the U.S. Therefore, trade disruptions have big consequences for the sector. Our proximity, integrated supply chains and long history of mutually beneficial trade make Canada’s trade relationship with the United States difficult to replicate. But a strong relationship with one customer does not prevent Canada from building more relationships elsewhere. In fact, doing both is one of the best ways to support long-term growth in the face of uncertainty and create a resilient value chain.

The federal government's new National Food Security Strategy recognizes the importance of building a more resilient, competitive and sustainable Canadian food system. Expanding access to international markets can help strengthen the sector's long-term growth while supporting Canada's role as a reliable supplier of food to the world.

Canada enters this moment with considerable strength. Agriculture and food exports reached approximately $100 billion in 2025. Canada has 15 free trade agreements covering 51 countries and 61% of global GDP, giving Canadian businesses preferential access to many of the world’s largest markets and fastest growing economies. And demand for Canadian products is growing. Between 2018 and 2023, Canadian export growth exceeded total global export growth for a variety of food products, particularly animal products and processed foods (Figure 1).

Figure 1: Commodity groups with Canadian export growth exceeding total global export growth, 2018 to 2023

Sources: UN ComTrade and FCC calculations

The $12-billion opportunity

FCC’s earlier trade diversification analysis identified the $12-billion opportunity to diversify Canadian food and beverage trade beyond the U.S. Approximately $2.6 billion could be redirected toward Canadian demand through stronger interprovincial trade, and the remaining $9.4 billion representing an opportunity to expand exports to markets outside the United States.

Our updated analysis shows that the largest opportunities are concentrated in two regions – Europe and Asia, each representing between four and five billion opportunities. This opportunity doesn’t imply an automatic shift in exports to these markets, but rather identifies these regions as markets where growing demand, Canadian export capabilities and existing trade relationships combine to create room for growth.

Europe’s appetite for value-added products

Europe represents the largest regional opportunity, and Canada has a strong foundation in the region through the Canada-European Union Comprehensive Economic and Trade Agreement and its trade agreements with the United Kingdom and European Free Trade Association countries. There is strong potential growth in European markets for prepared foods, vegetable oils, sugar and confectionery, processed fruits and vegetables, and alcoholic and non-alcoholic beverages. Prepared foods alone account for an estimated $1.2 billion of the European opportunity (approximately 25%), followed by vegetable oils at $1.1 billion and sugar and confectionery at $870 million.

There are encouraging signs that Canadian products already resonate with European buyers. Canadian agri-food exports to the European Union and UK reached approximately $7 billion in 2025, and grew by 43% in the five-year period between 2020 and 2025. The Netherlands stands out as a particularly strong market opportunity. Between 2018 and 2023, Canadian prepared-food exports to the Netherlands grew 165%, compared with 38% growth in the Netherlands’ total prepared-food imports. The Netherlands is also a major European distribution hub, so some trade growth may reflect products moving onward to other European markets.

Asia offers rapid growth opportunity

Asia represents an estimated $4.3-billion opportunity, in commodity categories beef, mutton and other livestock meat ($890 million); seafood ($839 million); prepared foods ($755 million); and vegetable oils ($674 million).

Some markets demonstrate how quickly Canadian suppliers have been gaining ground. Between 2018 and 2023, Canadian exports of beef, mutton and other livestock meat to Korea grew 419%, compared with 37% total growth in Korea’s imports of that commodity category. Canadian prepared-food exports to China grew 137%, while Chinese imports in that category grew 32% overall.

New agreements can expand the opportunity further, particularly in ASEAN countries as the Canada-ASEAN Free Trade Agreement is in negotiations. In 2025, Canadian agriculture and food exports to ASEAN countries totalled only $3.1 billion. Indonesia alone – currently Canada’s largest ASEAN export market, accounting for 38% of 2025 ASEAN exports – imported $39 billion in agri-food and seafood products in 2024 and represents a significant opportunity for export growth. This opportunity is bolstered by the signing of the Canada-Indonesia Comprehensive Economic Partnership Agreement, which when it comes into force will gradually give Canadian exporters duty-free access to Indonesian markets for products like beef, canola, and prepared foods.

The export opportunity is clear. Capturing it is the challenge.

Around the world, customers are increasingly choosing Canadian agriculture and food products due to our reputation for high-quality, safe, sustainably produced goods. The opportunity is therefore larger than responding to the current tariff dispute. Canada’s agriculture and food sector faces a broader opportunity to form durable customer relationships, introduce more Canadian products to global consumers and build a trade portfolio that can keep growing through changing economic conditions.

In many markets, the door is already open. The task now is to build the capacity, connections and confidence to walk through it. In part 2, we will examine what Canada must build at home to capture on this opportunity.

Explore FCC’s original analysis, The $12-billion trade shift: Canada’s opportunity to diversify food exports beyond the U.S., to see how specific products and markets could contribute to a more diversified Canadian food economy.

Article by: Bethany Lipka (Senior Economist) and Isaac Kwarteng (Senior Economist)