Book 2 - Overview documents: minister's transition book 2021, AAFC

Overview of Agriculture and Agri-Food Canada

AAFC is a federal organization of close to 5,000 employees based across Canada who support our world-leading agriculture and agri-food sector.

AAFC's annual budget is over $3 billion with our main areas of focus being science and innovation, trade and market growth, risk mitigation and management, and COVID-19 response measures.

AAFC is at the centre of the Agriculture and Agri-Food Portfolio which includes the Canadian Dairy Commission, the Canadian Grain Commission, the Farm Products Council of Canada, Farm Credit Canada, and the Canadian Agricultural Review Tribunal. We also work closely with the Canadian Food Inspection Agency.

To achieve our mandate, we must collaborate with partners and stakeholders:

Other federal departments;
Provinces and territories;
Indigenous communities and organizations;
International organizations;
Academia;
Organizations representing:
- Producers;
- Processors;
- Consumers; and
- Civil Society.

AAFC'S national and international presence

4,961 total employees
Over 2,400 employees based in research centres across the country
Over 2,200 at headquarters in Ottawa
Over 300 working at headquarters in Winnipeg
AAFC has 30 locally engaged staff and 10 Canada-based staff abroad in Canadian embassies/consulates/missions internationally through an agreement with Global Affairs Canada.
AAFC's strong regional and international presence allows for high quality intelligence, analysis and engagement on regional agricultural conditions, key issues, and supply capacity.
To learn more about the science and research activities conducted at each location: Facilities | Directory of scientists and professionals (science.gc.ca)

Core areas of responsibility and spending

AAFC's annual budget is over $3 billion – a mix of voted and statutory funds.

AAFC tracks plans and results in three core areas of responsibility: Market Growth, Science and Innovation and Risk Mitigation.
More than three-quarters of the budget is dedicated to grants and contributions programs, which provide direct support to the sector.
Business risk management (BRM) programs fall under sector risk (e.g., AgriStability, AgriInvest), and CAP programming, which spans all areas of responsibility, are a significant expenditure.
COVID-19 spending in 2021-22 (e.g., Mandatory Isolation Support for Temporary Foreign Workers Program and food security measures) falls under market growth and risk mitigation. Total AAFC funding allocated to COVID-19 programming since 2019-20 is $753 million.

**Amounts are from Supplementary Estimates (A) 2021-22: Supplementary Estimates – 2021-22 Estimates – Canada.ca**
Core areas of responsibility	2021-22 spending ($)
Market growth Trade negotiations Market access facilitation Promotion of Canadian products Trade shows and missions	903,901,500
Science and innovation Improving productivity, attributes, and environmental performance Supporting innovation and technology transfer and adoption Improving pest management	631,943,450
Risk mitigation BRM programs Disaster mitigation/response	1,602,434,249
Subtotal	3,138,279,199
Internal services HR, IT, Finance, audit, legal, communications, etc.	162,636,695
Total	3,300,915,894

AAFC branches and leadership team

To view the full Leadership Team: Organizational Structure

Deputy Minister (Chris Forbes) and Deputy Minister's Office

Position of Associate Deputy Minister is currently vacant

DM is main advisor to Minister and DMO is main liaison with Minister's Office

Corporate Secretariat provides support in the areas of parliamentary affairs, portfolio coordination, appointments, correspondence, governance and administration

Strategic Policy

Natasha Kim

Economic and environmental research and analysis, strategic planning, policy development, intergovernmental affairs, Cabinet affairs.

Public Affairs

Mary Dila

Strategic communications, media relations, marketing, social media, public opinion research, translation and other services.

Programs

Paul Samson

Design and delivery of a full range of grants and contribution and other programs.

Information Systems

Vidya Shankarnarayan

Information technology and information management support for internal and external programs and services.

Science and Technology

Gilles Saindon and Elizabeth Foster

Wide range of agriculture and agri-food research, development and technology transfer activities at 20 research centres and sites.

Corporate Management

Marie-Claude Guerard

Finance, planning and reporting, security, assets, and other corporate services.

Market and Industry Services

Tom Rosser

Trade negotiations, market information and analysis, sector engagement, regional intelligence, and emergency management.

Human Resources

Andrew Goldstein

Workforce wellness, accommodations, HR policy and planning, staffing and recruiting.

International Affairs

Kathleen Donohue

Market development, implementation of trade agreements, addressing market access and regulatory trade issues.

Branch has both AAFC and CFIA employees.

Office of Audit and Evaluation

Kimberly Saunders

Audits and evaluations.

Legal Services

Kristine Allen

Shared between AAFC and CFIA.

The broader agriculture portfolio

The Canadian Agriculture and Agri-Food Portfolio includes AAFC and five other organizations:

Canadian Dairy Commission
Canadian Grain Commission
Farm Products Council of Canada
Farm Credit Canada
Canadian Agricultural Review Tribunal

Each organization provides important services to support the sector and Canadians, through legislative/regulatory functions, financial services and broader industry engagement.

The Heads of Portfolio organizations report directly to the Minister, but the Deputy Minister and AAFC provide coordination support.

Ultimately, the Minister is responsible to report to Parliament and Canadians on the activities of the department and portfolio.

The Canadian Food Inspection Agency (CFIA) is not part of the Portfolio but works closely with AAFC. The Minister is responsible for the activities of CFIA that do not relate to food safety.

As part of the Corporate Management Branch, the Canadian Pari-Mutual Agency is a special operating agency/revolving fund within AAFC that regulates and supervises pari-mutuel betting (a unique pool-betting system) in Canada on horse races. This agency ultimately benefits the public interest through ensuring pari-mutuel betting is conducted in a way that is fair to the public.

Portfolio organizations and leadership

Canadian Dairy Commission

Headquartered in Ottawa, on the Central Experimental Farm, the CDC is a Crown Corporation that helps manage Canada's dairy industry, including support prices and quota under the supply management system for dairy.

The CDC has 73 employees and an annual budget of $10.11 million.

Serge Riendeau, CEO
Bob Ingratta, Chair

Canadian Grain Commission

Headquartered in Winnipeg, the CGC regulates grain handling in Canada and establishes and maintains science-based standards of quality for Canadian grain.

The CGC has 450 employees across the country and an annual budget of $66.14 million.

Doug Chorney, Chief Commissioner

Farm Products Council of Canada

Headquartered in Ottawa, on the Central Experimental Farm, FPCC provides oversight of the national supply management agencies for poultry and eggs, as well as supervise national promotion and research agencies for farm products.

The FPCC has 15 employees and annual budget of $2.7 million.

Brian Douglas, Chair

Farm Credit Canada

Headquartered in Regina, FCC is a financially self-sustaining federal Crown Corporation that provides financing to agricultural customers.

FCC has more than 2,100 employees operating from 99 offices across Canada. FCC's current lending portfolio is over $41.5 billion in loans providing funds to over 100,000 customers across Canada.

Mike Hoffort, CEO
Jane Halford, Board Chair

Canadian Agricultural Review Tribunal

Headquartered in Ottawa, CART is an independent tribunal providing impartial review of cases brought by those charged with bringing animal or plant products into the country without permission, or failing to meet standards for humane transport of animals.

CART has 15 employees and an annual budget of $900,000.

Luc Bélanger, Chair

Legislative authorities and shared jurisdiction

AAFC and the Portfolio administer over 30 federal Acts related to agriculture and agri-food.

The Department of Agriculture and Agri-Food Act says the Minister is responsible for: “agriculture and products derived from agriculture; research related to agriculture; and the operation of experimental farm stations”. The Act enables the department to support the sector from the farm through all phases of producing, process and marketing of agriculture products to consumers in Canada and in global markets.
Some other key Acts include the: Farm Income Protection Act; Canadian Agricultural Loans Act; Agricultural Products Marketing Act; Safe Food for Canadians Act. These allow AAFC to deliver agricultural financial programs, marketing statues, standards and regulations that ultimately contribute to the sector's performance and safety.

Section 95 of the Constitution identifies agriculture as a shared jurisdiction in Canada. A high level of engagement is required between the department and the provincial and territorial governments in order to develop and deliver policies and programs that effectively support the sector across Canada.

Five-year federal-provincial-territorial (FPT) policy frameworks define the manner, purpose, and context in which governments work together on agricultural issues. Much of AAFC's work and spending falls under the framework.

AAFC's response to COVID-19

COVID-19 exposed structural challenges in our food system and required the department to adapt its thinking and support which will influence departmental priorities and approaches into the future.

Challenges

Strong interdependencies of our supply chain/food system; concerns for domestic food security; need for better data and analytics and intergovernmental collaboration; disproportional impacts on underrepresented and marginalized groups; need for strong IT systems.

New actions

Support to food processors for PPE.
Addressing food surplus issues and increasing lending capacity.
Supports to vulnerable populations to address food insecurity.
Support to assist employers of temporary foreign workers.
Support for the supply chain (e.g. hiring of inspectors and vets, guidance to abattoirs and processing plants).
Regulatory agility (e.g. revised food labelling directive and FPT agreements for inspector training).
Facilitating internal trade (e.g. easing trucking rules in SK, trucks exempt from weight limits in QC).

The COVID-19 pandemic impacted how the department works both internally and with our key partners, including:

Successful shift to virtual, largely work-from-home model based around Microsoft Teams. Priority has been to resume lab and field work safely.
More frequent FPT, industry and other partner engagement.
Adjusting our activities to work in a virtual mode (e.g. market development, virtual trade shows.)

Looking ahead: key departmental priorities

Next Policy Framework

Sets the foundation for supporting the sector to 2028.
Negotiations typically take two years to complete.

Environment and Climate Change

Supporting the efforts of farmers to reduce emissions, build resilience in the fight against climate change, and enhance sustainable agriculture.

Drought response and recovery

Complete delivery of announced Agri-Recovery supports and continue to monitor impacts.

Labour

In collaboration with partners, identify strategies to improve the sector's access to labour, including preparations for arrivals of temporary foreign workers.

Canada's food systems

Leveraging lessons from COVID-19, seek improvements to Canada's food systems, including retailer-supplier relationships, food loss and waste, and food security concerns.
Submit Canada's National Pathways for transforming its food system to the United Nations, further to the UN Food Systems Summit.

Business Risk Management

Continue work with PTs to review risk management programs, to identify improvements and ensure it still responds to principles and objectives.

African Swine Fever

Continue preparations with industry and PTs for emergency and long-term responses to an outbreak.

Compensation for supply managed sectors

Completing compensation for supply-managed sectors to address the impacts of various trade agreements (i.e., CETA, CPTPP and CUSMA).

Market access and diversification

Respond to export barriers against Canadian agriculture and provide faster short-term support for industry when required.
Continue to help Canada's agricultural and agri-food businesses export their products and diversify into global markets.

Enhancing diversity and inclusion

Building Gender Based Analysis Plus capacity.
Measures to enhance diversity and inclusion within AAFC, for portfolio appointments, and within the sector more broadly.

The Canadian agriculture and agri-food system

Current state and future potential

The agriculture and agri-food system touches all Canadians and communities in Canada.

Key players in this system

Producers (primary agriculture)
Processing
Food retailers and wholesalers
Foodservice providers

It is part of a broader supply chain, which includes:

Input and service suppliers
Transportation
Consumers, at home and abroad

**The agriculture and agri-food system, GDP and employment, 2020**
	GDP ($ billion)	Percentage of total GDP	Employment
Primary agriculture	39.8	2.1	269,300
Food and beverage processing	33.2	1.8	288,800
Food retail and wholesale	32.7	1.7	637,200
Foodservice	21.1	1.1	809,100

Primary agriculture

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Top 10 Canadian commodities by average farm cash receipts in 2016 to 2020

Canola: $9 billion
Cattle and calves: $9 billion
Milk: $7 billion
Wheat: $5 billion
Hogs: $4 billion
Vegetables: $3 billion
Poultry: $3 billion
Soybeans: $3 billion
Corn: $2 billion
Floriculture and nursery products and sod: $2 billion

Contribution of primary agriculture to provincial gross domestic product (GDP), 2020

Canada has 64.2 million hectares of agricultural land concentrated across the Prairies and Southern Ontario.
Between 2016 and 2020, the prairie provinces represented 54.8% of total cash receipts on average. The prairies represented 61.8% ($22 billion) of average total crop receipts and 43.7% ($11 billion) of average total livestock cash receipts from 2016 to 2020.
Some provinces are more diversified than others, and primary agriculture's contribution to provincial GDP varies across Canada.

Food and beverage processing

The food and beverage processing sector is the largest manufacturing sector in Canada in terms of both GDP and employment. The industry's 8,000 businesses provide direct jobs for over 288,800 Canadians, employing more Canadians than the entire transportation equipment manufacturing sector.

The processing sector uses 42% of Canada's primary production and supplies 70% of all processed food and beverage products in Canada.

In 2020, 94.5% of food and beverage processing establishments were small operations (0-99 employees) with little variation across sub-industries. Plants are located across the country but primarily located in Ontario, Quebec and British Columbia, which accounts for 76.5% of food manufacturing establishments in the country.

**Canadian Food, Beverage and Tobacco (FBT) Processing Sales and Exports, 1996-2020**

**Distribution of Food and Beverage Processing Shipments by Sub-Industry, 2020**

**Distribution of Food and Beverage Processing Shipments by Sub-Industry in 2020**
Food and Beverage Processing	Distribution of Food and Beverage Processing Shipments by Sub-Industry in 2020 (%)
Other food manufacturing	10.4
Sugar and confectionery product manufacturing	3.2
Seafood product preparation and packaging	4.3
Animal food manufacturing	6.8
Fruit and vegetable preserving	7.2
Grain and oilseed milling	8.3
Bakeries and tortilla manufacturing	10.2
Beverage Manufacturing	10.5
Dairy product manufacturing	14.1
Meat product manufacturing	25.0
Notes 1. Includes snack food, coffee and tea, flavored syrup and concentrates, seasoning and dressings and all other food manufacturing. 2. And specialty food manufacturing. Source: Statistics Canada and AAFC calculations. Consulted May 7, 2021.

Wholesalers, food retail and foodservice

Wholesale is divided into farm products and food, beverage and tobacco products

In 2020, sales of farm products at wholesale reached $10 billion* while food, beverage and tobacco products at wholesale reached $148 billion in sales, both up on a year-over-year basis.

The Canadian food retail sector is concentrated

The top three traditional food retailers (Loblaw, Sobeys and Metro) and the top two general merchandise retailers (Walmart and Costco) accounted for about 80% of total food sales in 2020.

Large chains dominate in each region of Canada

Independents (e.g., co operatives and single stores) are more pronounced in Western Canada and Ontario.

Smaller retailers tend to serve remote and northern communities (e.g., co-ops).

In 2020, total foodservice sales reached $55 billion, down $22 billion or 28% from 2019:

Limited-service eating places accounted for the largest share (52%) of sales, representing $29 billion.
Sales at full-serve restaurants followed at $22 billion or 39% of total sales.
Special food services, which includes caterers and mobile food services, had sales of $3 billion, while drinking places had $1 billion in sales.

Most Canadian producers have seen solid growth over the past decade

Farm market receipts have grown 5.3% on average annually and reached a record high of $68.7 billion in 2020. 2020 was also a record year for Canadian agri-food and seafood exports, with a 10.4% increase amounting to nearly $74 billion.

The largest growth came from grains and oilseeds, which at $21.5 billion in farm market receipts, accounted for 36.5% of total farm market receipts in 2020.

For primary agriculture, net cash income reached a new record of $18.1 billion in 2020, despite the challenges of COVID-19.

External factors like commodity prices, disease and weather, such as the current drought in the prairies, could impact net cash income or result in variability between commodities.

Overall, the system felt the impacts of the COVID-19 pandemic…

But still ensured Canadians had reliable access to food.

COVID-19 had a significant impact on the system and highlighted a number of structural and systemic issues, including:

The strong interdependencies between all players of the agriculture and agri-food system;
Concerns for the self-sufficiency of Canada's domestic agriculture and agri-food food system;
The need for better data and analytics and importance of intergovernmental collaboration.

	(%)
Total economy	−6.7
Crop production	9.1
Animal production	0.5
Food processing	−1.5
Beverage processing	0.1
Farm wholesale	9.9
Food wholesale	1.2
Food stores	5.0
Food service	−36.4

Some agriculture and agri-food sub-sectors were more adversely impacted by the pandemic with declines in demand for dairy, edible horticulture, potatoes and seafood, price declines for poultry and disruptions in cattle and hog processing. Impacts can be attributed to multiple factors including restaurant and school closures and difficulty securing labour.

Drought conditions had devastating impacts for western producers this summer

A variety of Agriculture and Agri-Food Canada (AAFC) programs are responding to the current drought; however, negative impacts on farm income are expected.

Dry conditions began in 2020 and persisted through the winter. The hottest and driest part of the season occurred during critical crop development stages, which amplified the impact. The situation in July/August 2021 represented the largest and most severe drought conditions in the last 70 years.

As of August 31, 2021, the drought has covered an estimated 94% of the agricultural land in Western Canada; impacted 45.9 million acres of crop land; 52.6 million acres of pasture and over 2 million cattle.

Prices have been very strong this year and are expected to offset production declines caused by the drought. Early estimates indicate that grain receipts are expected to increase in 2021 by 10.5% compared to 2020, and to see an additional 1% increase in 2022. Producers also face greater risk of financial contract penalties with grain buyers due to yield losses.

The widespread feed and water shortages is increasing the price of feed and prompting producers to reduce livestock herds. The increase in livestock sales may pressure cattle prices and this, coupled with higher feed prices, could negatively impact producers' profitability.

Continued growth will require overcoming challenges and seizing opportunities

Challenges include:

Effects of climate change with severe weather events (e.g., drought) impacting production (refer to “2021 Drought” for more information)
Volatility in global trade (refer to “Trade and Market Access” for more information)
Challenges securing labour (refer to “Labour and Temporary Foreign Workers” for more information)
Risk management (refer to “Business Risk Management Programs” for more information)
Taking greater efforts towards sustainability, including climate change mitigation and adaptation (refer to “Environment and Climate Change” for more information)
Need for sustained investment in agricultural research, combined with adoption of emerging technology (refer to “AAFC Science, Technology, and Research Activities” for more information)
Strained retailer-supplier relationship (refer to “Canadian Retail Fees” for more information)

Opportunities include:

Taking advantage of free trade agreements and expanding into new markets
Regulatory agility to help the sector realize its growth potential
Development of safe new products and sustainable production systems can lead to competitive advantages (e.g., seed varieties, plant-based proteins, vertical farming systems, biomaterials)
Increased demand/price for Canadian products by meeting consumer expectations for sustainability
Extracting more value from our primary agriculture production and support food processing in pursuing new or emerging opportunities to diversify their operations
Developing a retail code of conduct to bring greater predictability and fair dealing to the supply chain

Canada remains a competitive global force – strong and growing

From 2011 to 2020, exports of Canadian agriculture, agri-food and seafood products increased by 67%.

Canada was a top exporter of agriculture, agri-food and seafood products in 2020.

Exports of agricultural and agri-food commodities are projected to continue experiencing steady growth over the next decade.

The total value of agriculture and agri-food exports, including fish and seafood, is projected to reach $88.6 billion by 2030.

Positioning the system for sustainable economic growth

Canada has some key advantages that can help make it a leader in food production and processing:

abundant land and water resources;
access to international markets;
strong research and development capacity;
strong global reputation as a trusted supplier of safe, top-quality food; and
strong stewards of the land.

Targeted action moving forward can help the system continue to capitalize on opportunities well into the next decade.

There is an opportunity to draw on lessons learned from the pandemic and capitalize on the strengths of the Canadian agriculture and agri-food system that were recognized before and still remain:
2017 Barton Report: potential for Canada to become the world's second largest exporter, with the primary and processing sectors being critical for new economic growth.
Canada's Economic Strategy Tables and the Royal Bank of Canada's Farmer 4.0: agriculture could add as much as $11 billion to Canada's GDP by 2030.

The agriculture and agri-food system holds great promise and potential

Agriculture and agri-food is one of the sectors with the highest economic growth potential in Canada.

Canada's key advantages can make us a leader in sustainable food production and processing.

Demand is growing for the kinds of food that Canadian producers and processors can deliver.

Canada's reputation for environmental stewardship can lead to increased demand and price for its products.

Canada has the opportunity to be a key contributor to addressing climate change concerns.

Taking advantage of these key opportunities will ensure the system is competitive, sustainable, resilient and prosperous well into the future.

A closer look at Canadian farms

Canadian agriculture is a growing and prosperous sector

As a whole, the agriculture and agri-food sector is a driver of economic growth.

From 2011–2020, revenues have steadily increased, reaching record levels in 2020.
However, the sector has evolved significantly over time, and there is a wide variance in farm operations across Canada.

Farm market receipts by major commodity group, 2011 to 2020

Farms are becoming larger and fewer

There are half the number of farms today compared to 50 years ago, while Canada's total farmland area has remained fairly constant, at about 6% of all land.

New technologies and production practices continually increase farmers' productivity and encourage farms to become larger and more efficient.

**Number and size of farms in Canada, 1941 to 2016**

Despite consolidation, many smaller farms remain

Almost half of all farms counted in farm data are small operations, many of which are hobby farms, which represent only a small share of total agricultural production or income.

At the same time, the largest 10% of farms generate about two thirds of all agricultural revenues.

The largest 1% of farms, alone, generate more than one quarter of revenues.

**Share of farms and share of total revenues by revenue class, 2019**

Revenue class ($)	Share of farms (%)	Share of total gross revenue (%)
10,000 to 24,999	16	1
25,000 to 49,999	15	1
50,000 to 99,999	16	2
$100,000 to $249,999	19	6
$250,000 to $499,999	13	9
$500,000 to $999,999	11	15
$1,000,000 to $1,999,999	6	17
$2,000,000 or more	4	48

Farm size	Revenue range
Small	$10,000 to $249,999
Medium-size	$250,000 to $1,999,999
Large	$2,000,000 and more

Revenue is used as proxy for farm size, given a wide range of farm types (e.g., crop production, animal production, mixed farm) and that some farms do not rely on significant land base (acreage) for production.

Farm size differs depending on farm type

**Share of farms by revenue class and by farm type, 2019**

	Share of revenue $10,000 to $249,999 (%)	Share of revenue $250,000 to $1,999,999 (%)	Share of revenue $2,000,000 (%)
Grains and oilseeds	12	58	30
Vegetables	7	32	60
Potato	1	22	77
Fruit	16	46	37
Greenhouse	4	16	80
Beef	14	24	62
Dairy	2	67	31
Hog	1	17	82
Poultry and egg	1	38	61
All farms	10	42	48

Potato, hog and supply-managed (dairy and poultry) farms tend to be primarily medium- and large-sized commercial operations.
In contrast, other farm types (e.g. fruit and cattle farms) tend to be smaller since their production, more than other commodities, lend itself to part-time farming.

Many farm families combine farm and non-farm income

Families with small farming operations rely heavily on non-farm income sources — the farm provides in-kind benefits and some tax advantages.

Equity in farm assets can assist producers in managing financial risks (e.g. credit options, access to loans).

**Average income of farm families and all Canadian families, 2018**

Variety of agricultural production and farms

Producers have to make daily production and financial decisions to manage the various risks they face and remain profitable.

There are significant differences in the challenges that individual producers face, depending on:

the commodities they produce;
the size of their operation; and
regional differences.

Together, farms of all sizes contribute to Canada's productive agriculture sector, to local and global food, as well as to land stewardship and regional vitality.

To reflect the reality of producers on their farms, the next slides profile the different types of farms in Canada.

Grain and oilseed producers

60,000 farms
Sales totalled $25.1 billion, or 37% of all 2020 market receipts
Record high sales prices have fueled significant growth over the last decade

Grain and oilseed (G&O) farms are found in all regions of the country:

However, the Prairies constitute 80% of grain, oilseed and pulse production; the most important crop is canola, followed by wheat and barley,
Corn and soybeans dominate in Ontario and Quebec.

G&O farms range widely in size, from small part -time farmers to very large businesses with sales of $6.5 million and more.

The Prairies have seen significant recent investment projection in canola crushing capacity, in part in response to biofuel demand.

**Example farm** - Grain and oilseed producers
	Grain and oilseed (Prairie)	Corn (Quebec)
Sales ($)	6,500,000	500,000
Productive capacity (acres)	15,000	640
Asset and debt ($ millions)	Assets, 25; debt, 5	Assets, 5; debt, 1
Major expenses ($, approximately)	Fertilizer, 800,000 Labour, 460,000 Seed, 320,000	Seeds, 76,000 Labour, 55,000 Fertilizer, 33,000

Main risks, challenges

Impacts of 2021 drought
Ensuring good transportation conditions to export markets throughout the fall, winter, and spring
Exposure to global markets and price fluctuations

Cattle producers

38,000 farms
Sales totalled $9 billion, or 13% of all 2020 market receipts
The largest 1% of cattle farms account for almost half of the sector's total production

Cattle farms are found in all provinces; however, 62% of Canada's $15 billion revenue is reported in Alberta.

Cattle farms differ in size and type of production.

Cow-calf farms tend to be medium-sized family operations that keep beef cows on pastures and sell calves that will move through the production system to backgrounding lots and feedlots.

About one third of Canadian beef production is exported, with the majority of exports destined for the U.S.

95% of beef slaughter capacity in Canada resides with four companies.

**Example farm** - Cattle producers
	Cow-calf (Prairie)	Feedlot (Ontario)
Sales ($)	200,000	7,000,000
Productive capacity	200 calves	3,700 cattle
Assets and debt ($)	Assets, 2.4 million; debt, 250,000	Assets, 12 million; debt, 5 million
Major expenses ($, approximately)	Feed, 21,000 Fuel, 160,000 Labour, 10,000	Feed, 2.1 million Interest, 410,000 Labour, 190,000

Main risks/challenges

Impacts of 2021 drought (water and feed availability)
Efforts to increase sustainability of production, and traceability of products
Slaughter capacity

Hog producers

2,300 farms
Sales totalled $4.7 billion, or 7% of all 2020 market receipts.
More than one third of hogs are produced on processor-owned farms

Most of Canada's hog farms are in Quebec, Ontario and Manitoba.

Hog production includes both independent producers and production owned by processing companies. The largest 1% of hog farms account for 31% of total production, with average sales of $45 million.

Some hog producers are specialized, i.e. keeping sows to produce piglets (wieners) or raising piglets to market weight.

Other hog farms are “farrow to-finish,” i.e. they operate the full cycle of raising sows, producing piglets, and raising them to slaughter hogs.

The largest four companies represent 72% of slaughter capacity in Canada.

**Example farm** - Hog producers
	Farrow-Finish (Manitoba/Ontario)	Farrow/Feeder (Quebec)
Sales ($)	12.0 million	1.8
Productive capacity	3,000 sows, 70,000 market hogs	28,000 weaner pigs, 18,000 feeder pigs
Assets and debt ($)	Assets, 22 million; debt, 9 million	Assets, 2.3 million; debt, 1.1 million
Major expenses ($, approximately)	Feed, 4.5 million Labour, 690,000 Interest, 250,000	Feed, 430,000 Labour, 61,000 Interest, 38,000

Main risks/challenges

Risk of African swine fever
Sufficient processing capacity and access to foreign markets
Issues with public trust (e.g., animal welfare, antibiotic use)

Dairy producers

9,700 farms
Milk sales totalled $7.1 billion, or 10% of all market receipts
Dairy farms in Quebec and Ontario account for 72% of all dairy production with revenues of $6 billion

Approximately half of Canada's dairy farms are in Quebec, another third in Ontario.

The total asset value of dairy farms varies with farm size.

Quebec dairy farms are on average smaller, with a herd size of around 66 cows and can have assets of approximately $3 million.

Ontario farms have an average herd of 85, with dairy farms in British Columbia. and Alberta averaging 144 cows and assets of up to $12 million.

With or without robotic milkers, dairy farming requires a significant amount of daily, year-round labour, and most dairy farmers are full-time operators.

Dairy farms operate under the supply management system, with milk prices set based on cost of production, generally resulting in no price fluctuations.

**Example farm** - Dairy producers
	Dairy (Quebec)	Dairy (British Columbia)
Sales ($)	500,000	1.6 million
Productive capacity	63 cows	200 cows
Assets and debt ($)	Assets, 3.4 million; debt, 1.3 million	Assets, 15 million; debt, 5 million
Major expenses ($, approximately)	Feed, 73,000 Labour, 45,000 Interest, 37,000	Feed, 420,000 Labour, 180,000 Interest, 150,000

Main risks/challenges

Challenges with market access provided under new trade agreements (CETA, CUSMA)
Potential declines in domestic demand for dairy products from increasing competition from plant-based protein products

Poultry and egg producers

4,400 farms
Poultry and egg sales totalled $4.5 billion, or 7% of all market receipts
Quota represents on average 50% of the farm assets of poultry and egg farms.

Ontario, Quebec and British Columbia account for more than three quarters of all poultry and egg farms and their total production.

Poultry and egg farms are usually specialized and produce only one of the following: broilers (meat chicken), turkeys, pullets (young hens), eggs, or hatching eggs.

Raising broilers takes 6 to 8 weeks and is highly automated.

Egg production requires daily collection and sorting, even if partly automated.

The largest 1% of poultry and egg farms account for 23% of total production, with average sales of $23 million.

Production is under supply management, except for raising of pullets.

**Example farm** - Poultry and egg producers
	Broiler (Ontario)
Sales ($)	2.5 million
Productive capacity	660,000 chickens
Assets and debt ($)	Assets, 16.0 million; debt, 2.7 million
Major expenses ($, approximately)	Feed, 760,000 Labour, 145,000 Interest, 76,000

Main risks/challenges

Challenges with market access provided under new trade agreements (CETA, CUSMA)
Imports of spent fowl (old laying hens) which impacts domestic supply
Addressing anti-microbial resistance and pathogen reduction
Issues with public trust (e.g., animal welfare associated with production methods)

Fruit and vegetable farms

7,600 farms
Fruit and vegetable sales totaled $3 billion, or 4% of all market receipts
Fruit and vegetable farms are one of the main agricultural employers

Ontario farms are responsible for one third of the sector's $3.3 billion in revenues, with Quebec and British Columbia farms being big contributors.

The largest 1% of fruit and vegetable farms are responsible for 28% of the sector's revenues, with average sales of $5.7 million.

Fruit and vegetable farming is seasonal and labour intensive; horticulture accounts for 45% of all paid employees in primary agriculture and 85% of seasonal agricultural temporary foreign workers in Canada.

**Example farm** - Fruit and vegetable farms
	Apple (Ontario)
Sales ($)	500,000
Productive capacity	75 acres
Assets and debt ($)	Assets, 1.6 million; debt, 440,000
Major expenses ($, approximately)	Labour, 73,000 Seed, 25,000 Chemicals, 12,000

Main risks/challenges

Challenges securing seasonal labour and reliance on temporary foreign workers
Strong competition for exports (two-thirds of production), as well as from imports
Impacts of adverse weather and price fluctuations

Potato farms

800 farms
Potato sales totalled $1.4 billion, or 2% of all market receipts
Farms are reliant on demand from processors and the food service industry, as seen during COVID-19

Prince Edward Island potato farms are responsible for about one third of potato sales in Canada, followed, not far behind, by Manitoba and Alberta farms.

About 65% of potatoes are grown for processing, another 20% are table potatoes, and 15% are seed.

Potato farms in the Atlantic provinces tend to be smaller than those in the Prairies.

The largest 1% of potato farms generate about 12% of the sector's total production, with average sales of $15 million and an average asset value of $51 million, largely in land and equipment.

**Example farm** - Potato farms
	Potato (Prince Edward Island)
Sales ($)	3 million
Productive capacity	900 acres
Assets and debt ($)	Assets, 10.0 million; debt, 2.9 million
Major expenses ($, approximately)	Labour, 440,000 Fertilizer, 430,000 Seed, 250,000

Main risks/challenges

Public trust associated with environmental impacts
Utilizing innovation in production management to reduce pesticide use
New variety development required

Greenhouse operations

2,200 farms
Greenhouse sales totalled $1.8 billion, or 3% of all market receipts
Greenhouse production the fastest-growing sector of Canadian agriculture

The majority of greenhouse farms are in southern Ontario; the remaining third operate in British Columbia and Quebec.

Production is focused on peppers, tomatoes and cucumbers.

While a number of small greenhouse farms exist, the majority of production happens on farms with $5 million in revenues or more.

The largest 1% of farms generated 32% of total production, with average sales of $20 million and assets of $28 million.

Greenhouse farms do not require a large land base, with the most significant investment being in greenhouse technology.

**Example farm** - Greenhouse operations
	Greenhouse (Quebec)
Sales ($)	6 million
Assets and debt ($)	Assets, 16 million; debt, 6 million
Major expenses ($, approximately)	Labour, 1.6 million Seed, 720,000 Seed, 390,000

Main risks/challenges

Challenges securing seasonal labour and reliance on temporary foreign workers
Ability to innovate and refine production management to reduce pesticide use, energy use, and increase automation

Evolving farm demographics

The share of farm operators 65 years or older continues to increase; as farmers tend to retire later than other Canadians.

However, the number of operators under 35 years of age increased in 2016, the first time since 1991.

Women, Indigenous persons, visible minorities and persons with disabilities are underrepresented among farm operators.

The share has increased marginally over the past thirty years.

Consideration for renewal is growing.

Access for new entrants
Facilitating intergenerational transfers
Need for diversity, including recognition of Indigenous practices

**Number of farm operators, by age category, Canada, 1991 to 2016**

**Number of farm operators, by age category, Canada, 1991 to 2016**
	1991	1996	2001	2006	2011	2016
Under 35	77,810	62,295	40,595	29,800	24,060	24,845
35 to 64	263,720	272,805	252,795	238,920	205,780	180,925
65 and older	49,185	52,450	52,815	58,335	62,955	66,165

Demographic characteristic	Share among farm operators (%)	Share in the Canadian population (%)
Women	33.5	48.3
Indigenous persons	2.5	3.9
Visible minority persons	8.3	20.8
Persons with disabilities	17	16

Overview of the sector
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2020 data

Agriculture and agri-food is a major contributor to the Canadian economy

Primary agriculture

An economic driver highly diversified across the country
- 193,492 farms
- farms cover 64.2 million hectares or 6.4% of Canada's land area
- concentrated across the Prairies, Quebec and Southern Ontario
- Average farm size doubled over the last 50 years due to increased consolidation and technological advances
Farm market receipts in billions of dollars

A record high $ 68.7 billion

4.5% average annual growth

Largest 10% of farms of farms generate two-thirds of all revenues

AAFC is mandated to support primary agriculture and food and beverage processing, but the sector reaches into the broader agri-food system which influence other service sectors across the food supply-chain.

The agriculture and agri-food system

Primary agriculture

(GDP, $ 39.8 billion, 2.1%, employment 269,300)

Food and beverage processing

(GDP, $ 33.2 billion, 1.8%, employs 288,800 people) and

Food retail and wholesale

(GDP, $ 32.7 billion, 1.7%, employs 637,200 people)

Primary agriculture, food retail and wholesale, and food and beverage processing also serve foodservice
(GDP, $21.2 billion, 1.1%, employs 809,100 people)

In 2020, the whole agriculture and food and beverage processing sectors
- Employed 558,100 people
- accounted for 3.8% of Canada's GDP
- provided 1 in 32 jobs in Canada
Food and beverage processing

Largest manufacturing industry in Canada
- 18% of all manufacturing GDP
- 17.3% of manufacturing employment
- Facilities across the country but most in Ontario and Quebec
- Food and beverage processing sales totalled $122.1 billion in 2020
Main industries
- meat, sales were $ 30,789,518 or 25.2%;
- dairy, sales were $ 15,900,627 or 13%;
- beverage, sales were $ 13,029,916 or 10%;
- bakeries and tortilla processing, sales were $12,433,606 or 10%

Sector commodity breakdown

Sector diversity
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As an economic department, AAFC views equal opportunity as a core element to sector growth and prosperity. Supporting diversity will generate benefits for Canadian communities.

Underrepresented or marginalized groups in the agriculture and agri-food sector

Indigenous
- Canadian population 3.9%
- Food retail 4.7%
- Primary Agriculture 3.5%
Women
- Canadian population 48.3%
- Food retail 54.4%
- Primary Agriculture 33.5%
LGBTQ+
- Canadian population 4%
- Food retail not available
- Primary Agriculture not available
Youth (15-35)
- Canadian population 35.3%
- Food retail 51.8%
- Primary Agriculture 28.1%
People of Colour
- Canadian population 20.8%
- Food retail 21.4%
- Primary Agriculture 8.3%
Persons with Disabilities
- Canadian population 16%
- Food retail not available
- Primary Agriculture 17%
Language Minorities
- Canadian population 22.4%
- Food retail 26%
- Primary Agriculture 19.6%
The intersection of these and other identity factors can amplify challenges.

Farm operations owned by these diverse groups tend to be smaller with on average lower gross farm receipts and lower net operating income.

These diverse groups are consistently over-represented in food retail compared to the Canadian population.

Sectoral challenges and barriers may be amplified for underrepresented or marginalized groups, such as
- Lack of access to capital and lands
- Limited context-specific expertise and training
- Limited networks and mentorship with similar experiences
- Funding providers may view novel or cultural operations as high risk
- Systemic stigma or harmful assumptions
AAFC collaborates across government and jurisdictions to support diverse groups entering the sector.
Enhanced diversity, inclusion and accessibility contribute to:
- Reconciliation and Indigenous self-determination
- Labour challenges
- Rural vitality
- Propelling innovation
- Increasing public trust
- Open new market opportunities
- COVID-19 Economic Recovery
Mainstreaming diversity, inclusion and accessibility at AAFC

Sector Engagement Tables is a fora for sector-government engagement, including with underrepresented groups to advance inclusive sector growth and competiveness.

Canadian Agricultural Youth Council is a consultative body of 25 young Canadians from across the country engaging and sharing perspectives and advice on the sector.

Next AAFC is exploring flexible cost-shared ratios, and other mechanisms, for groups facing systemic barriers in their business and social ventures.

GBA+ is a tool used at AAFC that assesses how diverse Canadians may experience policies, programs and initiatives. Designed to help us challenge assumptions and identify potential impacts, considering diversity and systemic inequalities.

Indigenous pathfinder service provides personalized assistance to help indigenous organizations/ individuals navigate aafc's programs and services.

Some of AAFC's targeted efforts

Indigenous Agriculture and Food Systems Initiative allocates $8.5 million to help increase economic development opportunities for Indigenous Peoples and communities.

AgriDiversity allocates $5 million to fund initiatives to help underrepresented and marginalized groups to participate in the sector.

Youth Employment and Skills Program allocates $10.3 million to fund agricultural work internships for youth and youth facing barriers.

Inter-departmental collaboration

Strategic Partnerships Initiative Helps Indigenous communities participate in complex economic opportunities

The 50/30 Challenge asks Canadian organizations to increase diverse representation in leadership and on corporate boards/senior management, specifically gender parity (the '50') and proportional representation of other groups (the '30')

Women's Entrepreneur Strategy allocates $6 billion in funding aiming to increase women-owned businesses' access to the financing, talent, networks and expertise they need to start up, scale up and access new markets.

Farm Credit Canada's Diversity Programs provides lending, enhance events and create resources specifically for women or youth entrepreneurs to start or grow their agricultural businesses.
Trade and market access

State of Canada's agri-food trade

Despite initial disruptions from COVID-19 on agriculture and agri-food supply chains, trade continued to flow and saw gains – reaching almost $74B in exports in 2020, a +10.3% increase from 2019.

The bulk of Canada's agriculture and agri-food exports are to the United States (51.9%).
- Canada and the United States have a strong, interconnected agricultural partnership totaling $67.6B in two-way trade of agri-food and seafood in 2020, supporting food security as well as business on both sides of the border. Agricultural exports are often processed (or used as ingredients) and then imported back to a Canada.
China has been Canada's second leading agri-food and seafood export market since 2012 – our exports have increased by 72% since.

Canadian exporters have recently diversified exports, increasing sales to Asia and Europe.

Canada's main export products: Oilseeds, grains, live animals, red meat and their products.

Canada's agri-food and seafood trade

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Canada's agri-food and seafood trade

Seafood exports and imports in billions of dollars from 2010 to 2020. The chart shows exports and imports have steadily been increasing since 2010, with exports consistently higher than imports.

Canada's top agri-food and seafood export destinations, 2020

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Canada's top agri-food and seafood export destinations, 2020

A pie chart showing the percentage of seafood exports going to various countries. United States is the largest at 52%; followed by Other, 13%; China, 13%; Japan, 6.6%; EU (excluding UK), 6%; and Mexico, 2%.

Canada's key markets and trade issues

Globally, Canada is the fifth-largest exporter of agri-food and seafood in the world, exporting to over 200 countries in 2020. With half of the value of Canada's total production exported, sector growth relies on predictable trade. Yet we face strong competition from the EU27, the US, Brazil and others.

With the growth in non-tariff barriers to trade and shifts in trade policy, Canada faces a number of market access issues and trade policy challenges, including in key markets:
- United States – supply chain, country of origin labelling (COOL), Agri-environment
- China – Canola seed, new food safety regulations (Decrees 248/249), COVID-related import measures
- European Union – Animal Health Law, Agri-environment
World's leading agri-food and seafood exporters, 2020

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World's leading agri-food and seafood exporters, 2020

World's leading agri-food and seafood exporters, 2020: EU, 13.5%; US, 9.5%; Brazil, 5.5%; China, 4.7%; Canada, 3.4%; Other, 63.4%

Global trading environment

The global trading system has witnessed significant changes and disruptions over the past five to ten years, with the emergence of digital technologies, the proliferation of non-tariff barriers and a new wave of protectionist policies threatening the multilateral trading system. Key challenges include:
- Global shift away from science / risk-based decision making,
- Trade disputes (i.e. Canola seed to China at the World Trade Organization [WTO)],
- Increased pressure for governments and industry to respond to consumer demands for transparency, traceability and sustainability assurances,
- Agri-environmental pressures, incentives and regulations are challenges that Canada will need to navigate to remain competitive,
- Animal and plant diseases (i.e. African Swine Fever [ASF]) and pests.
AAFC chairs a number of working groups with industry, to advance the resolution of market access and trade challenges (e.g. China Meat Group and EU Grains and Oilseeds Working Group).

AAFC's trade toolbox

AAFC uses several tools to advance Canada's objectives to support the rules-based trading system, gain preferential access, overcome trade barriers, and reach buyers in key markets.

Trade agreements and negotiations
- Establishing Canada as a preferred global supplier and establishing regulatory partnerships.
- World Trade Organization (WTO) agreements (Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), Agriculture) and negotiations
- Existing Free Trade Agreements (FTAs) and new regional/bilateral trade negotiations.
- Dispute settlement.
Collaboration with trading partners, international institutions and industry
- Bilateral engagement with long-standing partners (i.e. US, Mexico, EU, Japan) to address trade issues and collaborate in areas of common interests (e.g. science, environment).
- Engagement in multilateral fora (i.e. International Standard Setting Bodies [ISSBs]; Food and Agriculture Organization [FAO]; Organisation for Economic Co-operation and Development [OECD]).
Market access and advocacy
- Policy and technical work to advance and resolve market access issues.
- Advocacy to position Canada as a reliable supplier of safe products to positively influence decision-makers
Market development
- Targeted initiatives to support Small-to-Medium-Sized Enterprises (SMEs) seize global opportunities.
- Canada Brand tools and resources to promote Canada as a supplier of choice.
Supporting the multilateral rules-based trading system

AAFC engages with trading partners to support rules-based trade

WTO agriculture negotiations

Ongoing negotiations to continue trade reform in agriculture to reduce distorting subsidies

Ottawa Group on WTO reform

Forum to share ideas on WTO reform

WTO dispute settlement body
- Multi-Party Interim Appeal-Arbitration Arrangement
- Canada's request for panel review of China's canola seed measures
WTO Statement on COVID-19 Measures
- Targeted, temporary and transparent
AAFC works with CFIA to advocate for science and risk-based measures that enable trade
- Monitor for trends and market access issues
- Engage multilaterally and bilaterally on the importance of trade for food security, economic growth, environmental sustainability, and open, science-based trade (e.g., G20, FAO, Ag5, WTO)
- Leverage FTA implementation mechanisms to advance ambitious commitments that seek to prevent the implementation of unjustified and/or unnecessary measures
- CFIA is engaged in international standard setting bodies (OIE, CODEX, IPPC) to influence the development of policy and promote the adoption of science-based standards, guidelines and recommendations to facilitate trade.
Critical to success: Canada's free trade agreements (FTAs) provide preferential access to key growth markets

Canada has 15 bilateral and regional FTAs covering 51 countries, giving Canadian exporters a competitive edge in two-thirds of the global economy.

In 2020, 73% of Canada's agri-food and seafood exports were destined to FTA countries.

Leveraging FTAs can be an important part of Canada's post COVID-19 economic recovery plan:
- FTAs help Canada preserve and secure open, rules-based trade; diversified supply chains; and, predictable and secure market access for Canadian agricultural goods.
Ongoing and current negotiations

United Kingdom Bilateral FTA, Mercosur, India, Indonesia, Pacific Alliance, Potential CPTPP Accessions, Exploratory FTA Discussions with ASEAN, EFTA Modernization

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Map of the world showing Canada's FTAs and potential FTAs under ongoing negotiation.

This world map shows where existing Free Trade Agreements are established with Canada as well as where ongoing negotiations are occurring.

FTAs: In force

FTAs: Ongoing negotiations

Market diversification: leveraging export opportunities and navigating increased risk

Canada's agriculture, agri-food and seafood exports are concentrated by market and product. Market diversification efforts aim to diversify where Canada exports to, who exports and what is exported.

Increase market share
- Diversify range of exports and increase market share in established markets.
- Target markets: US, EU, Japan.
Seek new opportunities
- Pursue high growth, emerging markets.
- Target market: Indo-Pacific.
Defend interests and manage risk
- Defend interests and consider alternative markets for overexposed exports.
- Target market: China.
Market development

With a shared FPT mandate, market development leverages gains from market access and FTA negotiations to support Canadian companies seize global opportunities. It includes the following initiatives:
- Market information and intelligence resources (i.e. reports on export market opportunities)
- Targeted in-market activities (i.e. Retail and foodservice promotions; virtual and in-person Business-to-Business (B2B) programs, etc.)
- Trade shows and conferences, both in-person through flagship Canada Pavilion trade shows, as well as virtually
- Exporter preparedness activities and materials
- In-market expertise through the Trade Commissioner Service
- Canada Brand promotional tools and resources
In FY 2020-21 and in coordination with FPT partners, 50 market development initiatives were delivered, leveraging roughly $1 million in shared funding and supporting 1,200 Canadian participants to promote their products.

Working with federal partners

Global Affairs Canada

AAFC has 40 FTEs embedded into GAC's Trade Commissioner Service, collaborating on:
- Market intelligence and information
- Trade promotion, policy and negotiations
- Investment, science and innovation, and market access and trade policy
Canadian Food Inspection Agency
- Competent authority in Canada for food safety, animal and plant health
- Helps advance the export growth agenda by increasing market access abroad
- Negotiates and certifies commodities for export
Other departments
- Department of Fisheries and Oceans
- Department of Finance
- Canadian Grain Commission
- Regional development agencies, such as ACOA, PrairiesCan
- Canada Border Services Agency
- Health Canada
Looking forward – key decisions and issues for the minister

Key topics
- Approaches to advance issues and opportunities in Asia
- United States Country of Origin Labelling (US COOL)
- European Union Animal Health Law
Immediate engagement opportunities
- International Borlaug Dialogue (October 21, 2021)
- The Borlaug Dialogue, an annual international food systems conference, will take place in Iowa.
- Opportunity for Minister to meet US and Mexican counterparts in person or virtually.
12th WTO Ministerial conference (MC12) (November 30 to December 3, 2021)
- The conference, attended by trade ministers and senior officials, meets every 2 years and is the organization's highest decision-making body.
Global Forum for Food and Agriculture (GFFA), Berlin, Germany (January 24-28, 2022)
- Opportunity for senior level engagement (Minister, Deputy Minister) and for bilateral meetings with EU counterparts (European Commission as well as representatives from EU Member States) and other country representatives in attendance
Annex A: Supporting trade — programs and services

AgriMarketing Program

To increase and diversify exports internationally, seize domestic opportunities, and leverage Canada's reputation for high-quality and safe food.

Agri-Food and Trade Commissioner Service

To prepare for international markets, assess target market potential, find contacts, and resolve foreign market business problems and deliver promotional initiatives.

Agri-Food Market Intelligence Service

To identify market, sector and product trends, obtain trend forecasts and customized analysis, and analyze distribution channels

Canada Brand

To leverage Canada's global image to increase sales of Canadian food and agricultural products and services.

Canada Pavilion Program

To facilitate trade show participation for Canadian companies, helping them leverage opportunities arising from market access gains.

CanExport Program

Financial support for small and medium-sized enterprises to develop new export opportunities (GAC program).

Agri-Assurance Program

Supports industry in developing and adopting systems, standards and tools to support quality attributes, and health and safety claims.

Single Window

This service offers a single point of contact with the goal of helping the Canadian food industry and businesses reach international markets.

Annex B: Ongoing and current negotiations

Canada–U.K. Bilateral FTA

The Canada-U.K. Trade Continuity Agreement entered into force April 1 2021. The TCA is an interim agreement that will apply until a Canada-U.K. Bilateral FTA can be negotiated. Negotiations are expected to be launched in early 2022.

Canada–Mercosur FTA (Brazil, Argentina, Uruguay, Paraguay)

Canada–Mercosur FTA negotiations were launched on March 9, 2018. Seven rounds of negotiations have been held to date, the most recent in person round occurred in July 2019. No new rounds have been scheduled; however, virtual discussions are underway on a number of non-sensitive areas.

Canada–India CEPA Negotiations

Canada–India CEPA (Comprehensive Economic Partnership Agreement) negotiations launched on November 15, 2010. Canada remains engaged with India and is currently exploring possibilities for an early harvest outcome.

Canada–Indonesia CEPA

Canada and Indonesia launched CEPA negotiations on June 20, 2021. A first round of negotiations is anticipated to take place in late 2021.

Pacific Alliance (Chile, Colombia, Peru, Mexico)

Canada received an invitation to become an Associated State in the Pacific Alliance in June 2017. Eight negotiating rounds have been held, most recently in November 2019.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam)

Canada is currently working with other CPTPP Parties to evaluate the U.K.'s application for CPTPP accession. Canada is also monitoring other potential accession candidates who have indicated interest, including Thailand, Taiwan, South Korea, China and the Philippines.

Canada-ASEAN FTA (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam)

Exploratory discussions for a possible Canada–ASEAN (Association of South East Asian Nations) FTA concluded in 2019. Canada continues to engage with ASEAN towards launching potential negotiations.

Canada-EFTA FTA Modernization (excluding Switzerland)

Canada–EFTA (European Free Trade Association) FTA entered into force in July 2009. Canada and EFTA Member States (minus Switzerland) are currently exploring the potential modernization of the FTA.
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Agriculture and Agri-Food Canada, agricultural trade 2020

Trade at a glance

AAFC works to open new markets, capitalize on trade opportunities and promote science-based trade rules.

The agriculture and agri-food system generated $ 139.3 billion (7.4%) of national GDP.

Exports totalled $74 billion

5th largest exporter of agriculture and agri-food products (after the EU-27, the United States, Brazil and China)

3.4% of total world export value

5th largest importer of agri-food and seafood products.

Top exports, in billions of dollars
- Wheat, 8.4
- Canola seed, 6.8
- Grain products, 6.4
- Pork products, 5.1
- Canola oil, 3.8
- Animal and pet food, 3.8
- Beef and products, 3.3
- Soybeans, 2.6
Canada's position in the world: Top five export markets and their share of Canada's agri-food and seafood exports
Exports share (%)
- United States, 38.4 billion dollars, which is 51.9% of export share
- Mexico, 1.7 billion dollars, which is 2.3% of export share
- European Union, 4.6 billion dollars, which is 6.3% of export share
- China, 9.4billion dollars, which is 12.7% of export share
- Japan, 4.9 billion dollars, which is 6.6% of export share
Supporting trade

Agriculture trade commissioners and technical specialists provide on-the-ground intelligence and practical advice on foreign markets.

International trade missions, trade shows and the Canada Brand help exporters promote their products in key markets.

International trade missions, trade shows, e-commerce and the Canada Brand facilitate new business connections for exporters in key markets.

AgriMarketing is a $121-million 5-year AAFC program supporting industry-led promotional activities to expand Canadian exports and seize domestic market opportunities.

AAFC is active at the World Trade Organization and other multilateral fora to advance and defend Canada's agricultural trade policy interests, including advocating for science based regulations, negotiating new trade rules and monitoring the implementation of commitments by Canada's trading partners to maintain open and predictable trade.

Free trade agreements

Canada has 15 trade agreements covering 51 countries, giving Canadian farmers a competitive edge in two-thirds of the global economy.

Examples of multilateral FTAs
- The Canada-United States-Mexico Agreement
- The Comprehensive and Progressive Agreement for Trans-Pacific Partnership
- The Canada-European Union Comprehensive Economic and Trade Agreement
Examples of bilateral FTAs include agreements with these markets
- Chile
- Colombia
- Costa Rica
- European Union
- Honduras
- Israel
- Japan
- Korea
- Mexico
- Panama
- Peru
- United States
- United Kingdom
In 2020, nearly three quarters of Canada's agricultural agri-food and seafood exports were destined for countries where Canada has a trade agreement in place.

**Top three crop and livestock commodities, by average farm cash receipts, 2016 to 2020**
Newfoundland	Prince Edward Island	Nova Scotia	New Brunswick	Quebec
Milk $47,523	Potatoes $242,123	Others and Miscellaneous livestock $146,563	Cannabis $223,395	Milk $2,407,344
Others and miscellaneous livestock $43,737	Milk $86,550	Milk $144,335	Potatoes $157,889	Hogs $1,337,398
Eggs $18,723	Cattle and calves $31,636	Total fresh fruit $60,283	Milk $112,602	Poultry $781,254

Ontario	Manitoba	Saskatchewan	Alberta	British Columbia
Milk $2,142,251	Canola $1,400,322	Canola $ 5,287,278	Cattle and calves $4,930,078	Milk $646,116
Total fresh vegetables $1,862,490	Wheat $1,068,919	Wheat $2,082,664	Canola $2,727,129	Total fresh vegetables $592,853
Soybeans $1,658,600	Hogs $1,039,792	Cattle and calves $1,453,206	Wheat $1,835,042	Floriculture and nursery products, and sod $487,597

Agriculture and Agri-Food Canada: Programs overview

Purpose

To provide an overview of programs at AAFC

AAFC programs overview

AAFC-delivered programs provide a direct benefit to the sector through supporting productivity, innovation, research and/or sustainability.

These programs help the sector adopt new technologies, manage market conditions and strengthen environmental sustainability.

Canadian Agricultural Partnership Programs
Supply Managed Sector Programs
Environment and Climate Change Programs
Other Programs
COVID-19 Emergency Support Programs
Food Policy Programs
Business Risk Management Programs

AAFC programs provide support during emergencies and natural disasters such as COVID-19.

Program details are in the annexes.

Transfer payments are a key tool in program delivery at AAFC

AAFC support to the sector through transfer payments represents approximately $2.6 billion (Fiscal year 2021-22).

Includes grants, contributions and other transfer payments and must adhere to Government of Canada reporting and accountability requirements:

Governed by Treasury Board’s Policy on Transfer Payments, Financial Administration Act, Policy on Internal Audit, Privacy Act;
Reported in Public Accounts of Canada;
Subject to periodic spending reviews, ensuring alignment with federal priorities and services.

Type of transfer payments

Statutory transfer payment: Program is mandatory as it is named in an Act of Parliament (e.g., Business Risk Management Programs, some COVID-19 emergency funds);
Voted transfer payment: program (e.g., grants and contributions) requires Cabinet and Treasury Board approval (e.g., non-Business Risk Management Programs).

Business Risk Management programs

Business Risk Management (BRM) programs provide agricultural producers with protection against income and production losses, helping producers manage risks that threaten the viability of their farms.

Department’s largest funding envelope;
Cost-shared 60:40 with provinces and territories;
Statutory programs under the Federal Income Protection Act;
Demand-driven to provide support directly to producers;
Delivered either by Federal or Provincial Government, or partner agency.

BRM programs represent 56% of programming, and include AgriInsurance, AgriStability, AgriInvest, and AgriRecovery.

Canadian Agricultural Partnership: Cost-shared initiatives

Program parameters and priorities are jointly defined by federal, provincial and territorial governments for a combined $2-billion investment over 5 years.

Cost shared, with the federal government contributing 60% of the costs of the program and the provincial/territorial government contributing 40%.

The programs are developed and delivered by the provinces and territories to meet regional needs.

Provides a broad range of support to the sector (e.g., economic and business development, environmental extension services, productivity improvements).

AAFC is responsible for:

Developing and negotiating the Multilateral Framework Agreement and individual Bilateral Agreements with each Province and Territory to establish program parameters; and
Approving cost shared programming capital cost requests over $500,000.

Canadian Agricultural Partnership federal-only programs

Federal programs that represent $1 billion in investment over 5 years, with a focus on:

Growing trade and expanding markets to seize opportunities and address emerging needs (Agri-Marketing and Agri-Competitiveness);
Advancing science and innovation, with an emphasis on sustainable growth (Agri-Innovate and Agri-Science); and
Better reflecting the diversity of our communities, enhanced collaboration and secure public trust (Agri-Assurance and Agri-Diversity).

Delivered by AAFC to directly benefit producers and processors, and addresses priorities identified by the agricultural sector.

Additional AAFC programming

AAFC directly offers a broad range of programs to meet different objectives and respond to specific needs.

Environmental

Support adoption of clean technology and sustainable practices on farm.

Innovation

Invest in innovative opportunities and ideas that will support the sector.

Supply management

Compensation programs following recent trade agreements.

Inclusion

Supporting Indigenous agriculture and the participation of youth in agriculture.

Food Policy

Building local food infrastructure and reducing food loss and waste.

COVID-19 response

Suite of rapid response programs to support arrival of temporary foreign workers and respond to food insecurity.

Federally designed with different delivery models and partners. Often time-limited. Current and new programming is key to supporting the sector and achieving federal priorities.

Establishing a new transfer payment program

Policy authority

Sought through a Memorandum to Cabinet (MC), submitted by the Minister, when seeking a Cabinet decision on new policy or funding requests

Program and funding authority, terms and conditions

Sought through a Treasury Board, submitted by the Minister, to seek approval of terms and conditions, including program elements (e.g., objectives, design, costs, delivery).

Program guidelines

Approved by ADM, Programs Branch, provides specific program and funding criteria for program applicants while respecting the terms and conditions

AAFC’s Minister is responsible for direction on programming, including:

Approving minor amendments, continuation or termination of Ts&Cs;
Seeking Treasury Board approval for major amendments; and
Setting the strategic direction for risk tolerance for transfer payment programs

Standard project approval process

Application
Preliminary assessment to confirm eligibility
Full assessment (includes consultations with AAFC subject matter experts --MISB, STB, SPB)
Project Recommendation Form (PRF)
DG Review Committee
Project Approval (as per the Delegation of Authority)
Signature of a funding agreement

Final project approval is provided by the Minister or their delegated authority, as per the Financial Administration Act.

Client service improvements

AAFC continuously looks to improve client experience in order to make programs more accessible and to improve its client service experience.

The Department is offering online service delivery as an option and is looking for ways to facilitate smooth online delivery of programs. For example:

The My AAFC Account Portal allows clients easy online access to program and service information and is available for users of AgriInvest and AgriStability.
AAFC is investing in e-service delivery in order to offer clients more options to self-serve from application to project completion.

Client insights are gathered to enhance service delivery of programs, such as client satisfaction/impact surveys, client journey mapping, and usability testing.

AAFC has also improved the accessibility of its program offerings (e.g., for underrepresented groups and new entrants who are facing challenges).

Looking ahead: upcoming program considerations

Short-term decisions related to next steps for on-going programs or upcoming program launches.

FPT governments continue to work towards enhancements to Business Risk Management (BRM) programs; options for program changes will be provided for advancing discussions with provinces and territories.

As part of the development of the Next Policy Framework (NPF), examine opportunities to enhance and improve current Canadian Agricultural Partnership programming while ensuring a smooth transition to a new Framework.

Development of options for programming that can respond to new priorities (e.g., government commitments) and pressures (e.g., African Swine Fever).

Annex 1: Canadian Agricultural Partnership

Purpose

The Canadian Agricultural Partnership (CAP) is a 5-year (2018 to 2023), $3-billion investment by federal, provincial and territorial governments to strengthen the agriculture, agri-food, and agri-based products sector and increase its competitiveness, prosperity and sustainability.

Of the 5-year $3-billion investment, $2 billion is invested in cost-shared programming with the provinces and territories. The federal government is also investing over $1 billion in federal-only programming under the Partnership to strengthen the sector by ensuring continued innovation, growth and prosperity.

Background

Since 2003, FPT partners have worked collaboratively to negotiate the priorities and principles of 5-year agricultural policy frameworks that support initiatives with common objectives and reduce redundancy and inequities in programming.

The Partnership is the most current framework and launched April 1, 2018; it commits FPT partners to support initiatives within six priority areas.

Science, research and innovation
Markets and trade
Environmental sustainability and climate change
Value-added agriculture and agri-food processing
Public trust
Risk management

Funding 2018 to 2023

The Partnership programs and services were developed based on extensive consultations with producers, processors, Indigenous communities, women, youth, and small and emerging sectors to address the changing needs of the agricultural sector. Federal Strategic Initiatives (Fed-only) programming under the Partnership focuses on three key areas:

Growing trade and expanding markets ($297 million) – providing core industry services, such as timely market information and sector expertise to help improve the sector’s competitiveness, growth and adaptability. Advancing and defending international trade interests, as well as improving market development and market access activities, namely:
- AgriMarketing – focuses on helping increase and diversify exports through industry-led promotion activities; and
- AgriCompetitiveness – assists industry-led efforts to provide producers with the information they need to build capacity and support the sector’s development.
Innovative and sustainable growth of the sector ($690 million) – enhancing the competitiveness of the sector through research, science and innovation, and adoption of innovative products and practices, with an emphasis on the environment and clean growth, namely:
- AgriInnovate – aims to help applicants get their innovation projects that increase competitiveness and sustainability to market; and
- AgriScience – commercialization activities and investing in cutting-edge research.
Supporting diversity and a dynamic, evolving sector ($166.5 million) – strengthening the sector by better reflecting the diversity of Canadian communities, enhancing collaboration across different jurisdictions through a new Regional Collaborative Partnerships Program, securing and supporting public trust in the sector, and improving client services, namely:
- AgriAssurance – supports industry in meeting consumer needs for Canada’s high-quality products; and
- AgriDiversity – strengthens the sector by helping diverse groups build skills and take on leadership roles.

Annex 2: Cost-shared programming 2018 to 2023

Cost-Shared Program – federal, provincial and territorial governments are investing $2 billion for cost-shared programming

This investment is shared 60% ($1.2 billion) by the federal government and 40% ($800 million) by provincial and territorial governments.

Through 2 years of the Partnership (2018-19 and 2019-20), performance indicators are on track to achieve framework outcomes, and approximately $718.8M has been spent on FPT cost-shared strategic initiatives.

Bilateral Agreements are signed with all provinces and territories (PTs) with terms and conditions of Canada’s financial contributions to provinces and territories and include general provisions on spending and the flow of Canada’s contributions to all designated programs delivered by or through a province/territory.

Provinces and territories design and deliver most cost-shared programming, and project applications are submitted directly to them. An investment analysis is underway that further defines the investment under each priority area, at a project level.

Each year, PTs report on performance, providing details on results achieved. Performance reports are provided to the annual ministers’ meetings each July.

Regional Collaborative Partnerships Program – $3-million program provides an additional federal contribution to provincial and territorial governments that collaborate on projects that address shared challenges and/or priorities.

The objective is to further encourage regional collaboration under the CAP based on the six priority areas.

An example of an approved project: the Nova Scotia Department of Agriculture is collaborating with the Departments of Agriculture in New Brunswick and Prince Edward Island to carry out collaborative research addressing specific challenges with pollination in Atlantic Canada and maximizing benefits for the honeybee and blueberry sectors.

As of September 2021, the Program has received10 applications; eight projects were approved, totaling $1.0M. Applications will be accepted until September 30, 2022, or until all funding has been fully committed.

Annex 3: Business risk management suite of programs 2018 to 2023

AgriRisk Initiatives: $55 million supports activities research, development and implementation of new risk management tools and practices.

Research and Development (R&D) – $26 million supports industry-led development of new financial tools.
- As of Aug. 18, 2021, 18 R&D projects approved, totalling $7.9 million.
Microgrants – $3 million for grant funding supports academic research on business risk management in the Canadian agriculture sector.
- As of Aug. 18, 2021, 21 applications approved, totaling $1.2 million
Administrative Capacity Building (ACB) – $26 million to provide support to pilot the administration and test the viability of new risk-management tools, such as insurance products, when R&D is complete.
- To date, nine applications approved totalling $15.3 million

AgriInvest: A self-managed government-matched savings account that helps producers manage small income declines and make on-farm investments

A producer’s AgriInvest account builds as they make annual deposits based on a percentage of their Allowable Net Sales (to a maximum of $1 million) and receives matching contributions on the first 1% from governments. Based on this limit, the maximum annual government deposit is $10,000 per year.
Government contributions and costs to administer AgriInvest are shared between the federal and provincial/territorial governments on a 60:40 basis. AgriInvest is delivered by AAFC for the Yukon and all provinces, except Quebec, where it is delivered provincially. Between 2014 and 2018 (the last 5 years of complete program data), AgriInvest provided an average of $277 million annually in government contributions.
AgriInvest has the highest participation rate of all BRM programs. Approximately 80% of producers, accounting for 94% of market revenues, participate in AgriInvest.
Producers can withdraw accrued funds from their accounts at any time and currently have access to a total over $2.4 billion in their AgriInvest accounts, with an average of approximately $27,800 per account. Since the program’s inception in 2007, producers have withdrawn over $5.7 billion of combined producer/government funds.

AgriStability: provides individualized support when producers experience large margin declines relative to their historical average

Uses a producer’s individual “margin” to calculate program payments and accounts for impacts on both revenues and variable costs directly related to production. A producer receives an AgriStability payment if their current year margin drops by more than 30% relative to their historical margins and is compensated at 70% of the total margin decline. Margins are calculated on a whole-farm basis, responding to a variety of risks, including production or price declines, rising input costs, and market losses due to reduced sales or border closures.
Is the second largest program in the BRM s AgriStability: provides individualized support when producers experience large margin declines relative to their historical average
Uses a producer’s individual “margin” to calculate program payments and accounts for impacts on both revenues and variable costs directly related to production. A producer receives an AgriStability payment if their current year margin drops by more than 30% relative to their historical margins and is compensated at 70% of the total margin decline. Margins are calculated on a whole-farm basis, responding to a variety of risks, including production or price declines, rising input costs, and market losses due to reduced sales or border closures.
Is the second largest program in the BRM suite, after AgriInsurance. From 2014 to 2018, program payments have averaged approximately $345 million per year.
Program payments and costs are shared between the federal and provincial/territorial governments on a 60:40 basis, and the Program is delivered by AAFC in Manitoba, Newfoundland and Labrador, Nova Scotia, New Brunswick and Yukon. The program is delivered provincially in all other jurisdictions.

AgriInsurance: provides subsidized insurance coverage to minimize the financial impacts of production losses caused by uncontrollable natural perils, such as flood, drought and disease.

Is the largest of the BRM programs, comprising about two-thirds of the allocated funds. In 2019-20, government premium contributions were approximately $1 billion; has been relatively stable since the inception of Growing Forward 2 (2013 to 2017). The premium charged to producers accounts for 60% of government costs for the program.
Federal and provincial governments and program participants cost-share premiums to ensure affordability of coverage for producers (generally, 36% federal, 24% provincial and 40% producer). Governments also fully cost-share the administrative costs of the program (60:40 federal-provincial).
Producers must proactively buy insurance before an agricultural product is planted or before any damage is possible. When a producer’s production falls below their insured coverage level, they are compensated.
Each province maintains an insurance fund account (funded by premiums) to pay indemnities to insured producers and to pay the premiums for any private reinsurance agreements.

AgriRecovery: provides a coordinated process for federal, provincial and territorial governments to assess the impacts of natural disasters (such as extreme weather, diseases and pests) on producers, and, where required, to respond with targeted financial assistance.

Provide support for the extraordinary costs of actions producers must take to resume production as quickly as possible and/or mitigate the impacts following a disaster. AgriRecovery is intended to complement, but not duplicate, support available under other BRM programs.
Since 2010, 50 initiatives have paid out over $1.0 billion (federal-provincial) to assist producers in recovering from a variety of disease- and weather-related disasters. Nine of these initiatives, representing $37 million (federal-provincial) were launched under Growing Forward 2 (2013 to 2017).
In 2020–21, up to $125 million in federal support was available to help producers with extraordinary costs incurred as a result of the COVID-19 pandemic. This support included $100 million in federal assistance for livestock producers. Total federal spending for COVID-19 initiatives is projected to be over $38 million.
Federal funding for an AgriRecovery initiative is drawn from an annual federal funding allocation of $125 million.

Annex 4: Supply managed sectors

Dairy Direct Program

Up to $1.75 billion over 4 years to cow milk producers to help transition to new market realities due to recent international trade agreements

The Dairy Direct Payment Program is being delivered in cooperation with the Canadian Dairy Commission.

There are no applications. However, producers are required to register every year, by March 31, for the Program and indicate acceptance of the payment. Producers have the ability to register through an online portal, and by mail or fax.

Payments are proportional to each dairy producer’s share of dairy quota and help dairy producers adapt to CPTPP and CETA market conditions by replacing foregone income, increase producer confidence in the future of the supply management system, and provide producers with the opportunity to make investments in their operations.

For example, the owner of a farm with 80 dairy cows will be awarded compensation in the form of a direct payment of $38,000.

Dairy Farm Investment Program

A 6-year (beginning 2017-2018) $250-million program to assist Canadian cow milk producers to improve productivity through upgrades to their equipment and assist in adapting to recent international trade agreements

The program is divided into two phases: Phase 1 ($129 million) is closed and ran from 2017-18 to 2019-20, and Phase 2 ($98 million) runs from 2020-21 to 2022-23.

As of December 2018, for Phase 1 of the Program, 1,903 projects have been approved, valued at $130.9 million.

As of August 13, 2021, for Phase 2 of the Program, 1,527 projects have been approved, for up to $98.8 million.

Dairy Processors Investment Fund

A 4-year (2017 to 2021), $100-million program to increase the efficiency, productivity, and competitiveness of Canadian dairy agri-food processors and mitigate the impacts of recent international trade agreements.

The program was extended by 1 year (to March 31, 2022) to allow recipients impacted by COVID-19 to complete their projects.

As of August 10, 2021, the Dairy Processing Investment Fund received 288 project proposals; approved 105 projects, with a total commitment of $87.3 million. All available funding under the program has been committed.

Market Development Program for Turkey and Chicken

$44 million over 10 years to increase domestic demand and consumption of Canadian turkey and chicken products
$19.23 million for the Turkey Farmers of Canada and $25 million for the Chicken Farmers of Canada

Funding supports activities such as promotion and advertising campaigns in partnership with the retail sector, or market research and product development to meet emerging consumer demands.

Funding will be distributed over a 10-year period to improve the sector’s market position. Organizations will submit multi-year strategies to AAFC for approval. Intake of applications was launched on April 13, 2021.

As the Program was recently launched, industry is currently developing their funding proposals and applications are expected soon.

Poultry and Egg On-Farm Investment Program

$647 million over 10 years to help supply-managed poultry and egg producers adapt to market changes resulting from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
$347.3 million for chicken producers; $76.9 million for turkey producers; $134 million for egg producers; and $88.6 million for broiler hatching egg producers

The Poultry and Egg On-Farm Investment Program increases efficiency or productivity; improves on-farm food safety and biosecurity; improves environmental sustainability; and responds to consumer preferences (improve animal welfare, adopt alternative housing systems, transition to organic production, etc.)

As of August 13, 2021, the Poultry and Egg On-Farm Investment Program received 309 applications, for a total of $36.6 million. Applications are currently under review.

Annex 5: Food Policy Programs

Food Waste Reduction Challenge: a $20-million initiative to support new innovations and solutions that can help address the problem of food waste and loss across the food supply chain, thereby reducing the associated economic, environmental, and social costs of food waste

The Food Waste Reduction Challenge is comprised of four streams:

Stream A: Business models that prevent food waste;
Stream B: Business models that divert food waste
Stream C: Technologies that extend the life of food;
Stream D: Technologies that transform food waste, surplus food or food by-products into new food or other products

A three-staged approach to funding is being used. At each stage, different financial and non-financial incentives will be available to successful participants. At every stage, solutions will be reviewed against the assessment criteria, and selected winners will be invited to move to the following stage.

Streams A and B

Stage 1 - Concept Application: Up to 24 Prizes of $100,000
Stage 2 - Market Demonstration Results: Up to 12 Prizes of $400,000
Stage 3 - Product Ready and Testing: Up to 2 Grand Prizes of $1.5 million

Streams C and D

Stage 1 - Concept Application: Up to 18 Prizes of $100,000
Stage 2 - Prototype: Up to 6 Prizes of $450,000
Stage 3 - Grow and Scale in the Market: Up to 2 Grand Prizes of $1.0 million

Local Food Infrastructure Fund (LFIF): a 5-year, $60-million initiative that aims to strengthen food systems and to facilitate access to safe and nutritious food, with a focus on Canadians at risk of food insecurity

Initial intake took place from August 15, 2019, to November 8, 2019, (LFIF-1) and was aimed at small community-based organizations to improve their infrastructure and purchase equipment directly related to the accessibility of healthy, nutritious and, ideally, local foods within their community; 362 projects were approved, with over $6.6 million in AAFC funding.

The second intake of LFIF was from June 9, 2020, to February 12, 2021, (LFIF-2) and, along with simpler infrastructure requests noted above, it included more complex, multi-year projects that strengthened local food systems. The second call received 488 applications for funding, and approval was sought for 281 projects, representing over $21 million in AAFC funding.

The third intake of LFIF (LFIF-3) opened on July 12, 2021, and closes on September 3, 2021. This intake mobilizes the additional $10 million announced in Budget 2021 to provide rapid-response grants to help prevent hunger through investments in infrastructure needs. The impact must be targeted and immediate and must be directly related to addressing food insecurities and increasing the accessibility of healthy, nutritious and local foods within their communities (over 400 applications have been received and are under review).

A fourth and final intake of LFIF (LFIF-4) is currently under development, with an anticipated launch in early 2022. Options and recommendations for a refreshed strategic focus, based on experience delivering the program since 2019, are expected in fall 2021.

Annex 6: Environment and climate change programs

Agricultural Climate Solutions Program Living Labs

$185-million, 10-year program part of the Government of Canada’s Agricultural Climate Solutions initiative, under the $4-billion Natural Climate Solutions Fund, a program managed by Natural Resources Canada, Environment and Climate Change Canada, and AAFC

The program will proceed in two phases:

Phase 1: Grant funding (April 1 to June 15, 2021) – Proposals accepted for grants of up to $100,000 from eligible organizations to develop a network of participants, based on the living labs approach, to develop and submit project proposals for contribution funding; 26 proposals were received, 10 were approved.
Phase 2: Contribution funding (fall 2021) – Application process for funding support of up to $8 million per project, including research and development support if requested, is slated to open in fall 2021. It is expected that approved projects will start in spring 2022.

A second intake of grant applications and contribution funding applications for additional Agricultural Climate Solutions projects will begin in spring 2022.

Agricultural Climate Solutions Program On-Farm Climate Action Fund

$200 million over 3 years to accelerate co-development, testing, adoption, dissemination and monitoring of technologies and practices, including beneficial management practices (BMPs), that sequester carbon and/or mitigate greenhouse gas (GHG) emissions in:

nitrogen management;
cover cropping; and
rotational grazing practices

These practices provide other environmental benefits, e.g., improved biodiversity and soil health.

Starting August 12, 2021, the OFCAF is seeking proposals from potential delivery partners that include:

not-for-profit organizations, including producer groups, commodity organizations and non-governmental organizations;
Indigenous groups;
for-profit organizations; and
provincial or territorial Crown corporations.

Applications must be submitted by September 26, 2021.

Annex 7: Environment and Climate Change Canada programs

Agricultural Clean Technology Program, 2018 to 2021 (Program closed)

Was a 3-year (2018-21), non-repayable, $25-million program to help the agricultural sector reduce greenhouse gas emissions by prioritizing projects that invest in or promote two key areas of clean technology for the sector: agri-based bioproducts and precision agriculture.

Formed part of the Government of Canada’s suite of clean technology programs and initiatives to support clean technology projects for the agriculture sector that support activities across the innovation continuum, which ranges from research and development, to technology and knowledge transfer, to commercialization and adoption.

Agricultural Clean Technology received 31 applications; 16 projects were approved, totalling $8.6 million. The Agricultural Clean Technology application period ended on March 31, 2021, and the program is now closed.

The new Agricultural Clean Technology Program (ACT 2.0)

The $165.7-million ACT 2.0 Program supports research, development and adoption of clean technologies.

$150 million total funding over 7 years divided into two streams:

Adoption Stream (2021 to 2026) supports non-repayable activities for adoption of technologies that are proven to reduce greenhouse gas emissions.
As of August 18, 2021, ACT-Adoption received 442 Project Summary forms, and 184 full applications, requesting $58.65M
Research and Innovation Stream (2021 to 2028) supports non-repayable and/or repayable activities for pre-market innovation, including research, development, commercialization, demonstration and scale-up.
As of August 18, 2021, ACT–Research and Innovation received 53 Project summary forms, with estimated total requests of $37.89 million.

Budget 2021 outlined $50 million for purchasing more efficient grain dryers for farmers and $10 million over 2021–2023 towards powering farms with clean energy to move off diesel.

Annex 8: Other programs and services

Farm Debt Mediation Service

Statutory program provides free, confidential services to those who farm commercially and are having difficulties meeting their financial obligations.

Supports bringing producers and their creditor(s) together with a mediator in a neutral forum to reach a mutually acceptable solution related to farm debt and financial obligations. The Service has proven to be an effective and economical alternative to resolving financial disputes in court.

To access the Service, applicants must farm commercially and have stopped making or no longer be able to make payments on time; or if their farm was sold, the value of the property is not sufficient to cover their debt.

Once an application is deemed complete, a qualified financial consultant is assigned to work with the applicant throughout the mediation process. The consultant works with the farmer to assess their financial situation and to develop a financial recovery plan. Once the plan is developed, a mediation meeting is arranged for the producer and creditor(s) to come to a mutually acceptable solution.
During the mediation, the mediator ensures a fair and unbiased mediation process. If an arrangement is reached, the arrangement is signed and circulated among the parties.

International Collaboration Program

Supports a range of international memberships and projects aimed at advancing AAFC’s International Strategy.

Provides AAFC with the opportunities to leverage and influence policy decisions in international fora and to enhance international cooperation.

An internal program that advances AAFC’s international priorities through two types of international grant payments:

ongoing payments to support Canada’s memberships in key agricultural international organizations/treaties (e.g., the International Grains Council); and,
targeted payments to advance specific international priorities or projects (e.g., Inter-American Institute for Cooperation on Agriculture – Professional Surveillance Training for African Swine Fever in the Caribbean).

An annual budget of approximately $1.2 million per year, drawn from an ongoing authority and from the Canadian Agricultural Partnership, but can increase when additional funding is available within the Department and in response to greater demand to advance key international priorities.

In 2021-22, the Program approved six ongoing projects worth approximately $887,000 and 10 targeted payments worth a little over $1.0 million.

Youth Employment and Skills Program

AAFC is one of 12 federal departments participating in Employment and Social Development Canada’s Youth Employment and Skills Strategy (YESS).

At AAFC, the Youth Employment and Skills Program (YESP) helps organizations create agricultural internships that give employees agriculture career-related work experiences in Canada and/or skills acquisition through mentoring and coaching.

Provides young Canadians an opportunity to gain critical work experience, knowledge and skills through projects that employ youth and youth facing barriers to fully participate in the workforce (e.g., physical or mental disabilities, coming from remote or rural locations with limited opportunities).

Funding is comprised of different sources: Budget 2019, budget proposal 2020-21 (to secure COVID-19 funding), Budget 2021, a transfer from Employment and Social Development Canada, and ongoing program funding.

YESP, which replaced former agricultural internship programs, launched on June 3, 2019, with $3.7 million in funding in 2019-20.
In response to COVID-19, the Government of Canada approved an additional $9.2 million in 2020-2021 and up to $21.4 million for 2021-22. This additional money helped to fund over 1,100 new positions (in 2020-2021) for youth in the sector and to assist with labour shortages brought on by COVID-19 and is expected to fund close to 2,200 more (in 2021-22).

Annex 9: Other programs and services — Act programs

Agricultural Marketing Programs Act: Advance Payments Program

The Agricultural Marketing Programs Act provides statutory authority for two federal-only loan and price guarantee programs, the Advance Payments Program and the Price Pooling Program.

The Advance Payments Program allows Canadian farmers to obtain low-interest cash advances on the expected value of their commodities. This cash flow provides marketing flexibility for producers to market their products at the best time and price. Farmers can obtain an advance through 31 third-party Advance Payments Program administrators (mostly industry associations) across Canada. On average, approximately $2.5 billion in advances are issued to over 21,000 producers per program year.

Farmers can obtain advances of up to 50% of the expected market value of eligible agricultural products they will produce or already have in storage. The maximum advance is $1.0 million per program year, with the Government of Canada paying the interest on the first $100,000. For 2019 advances on canola only, the interest-free portion was increased to $500,000 to help farmers impacted by reduced marketing opportunities on Canadian canola.

Agricultural Marketing Programs Act: Price Pooling Program

The Agricultural Marketing Programs Act provides statutory authority for two federal-only loan and price guarantee programs, the Advance Payments Program and the Price Pooling Program.

The Price Pooling Program facilitates the cooperative marketing of agricultural products by guaranteeing the price of products sold through marketing agencies. If the average price received by the marketing agency for the sale of products delivered to the pool falls below the guaranteed price, a payment is triggered, and the Government of Canada makes up the difference. This guarantee allows marketing agencies to arrange financing and provide payments to producers upon delivery of products to the marketing pool.

The Price Pooling Program is designed to only trigger government payments in the case of severe price declines (35% relative to the average wholesale price). As such, the Price Pooling Program has not triggered a government payment since 1997.

The Canadian Agricultural Loans Act

The Canadian Agricultural Loans Act Program (the Program) is designed to increase the availability of credit for the establishment, improvement and development of farms. Agricultural co-operatives are also eligible for loans under the Program to process, distribute, or market the products of farming.

The Program is delivered by eligible lending institutions (e.g., chartered banks, credit unions, Caisse Populaires, and Alberta Treasury Branches). The lender exercises its due diligence to determine that both the applicant and the purpose of the loan qualify under the program. The lender pays a registration fee of 0.85% of the amount of the loan to the Receiver General for Canada. The government guarantee covers up to 95% of any net loss incurred on eligible loans registered under the program.

The overall loan limit for each applicant is $500,000. Loans are limited to a maximum of: $500,000 for real property and/or up to $350,000 for other eligible purposes (for example, to purchase equipment, breeding livestock, etc.). For example, if a farmer gets a CALA loan for $300,000 for a tractor, they can still access up to $200,000 for land purchase or building repair, or $50,000 for another implement and $150,000 for land purchase or building repair. Agricultural co-operatives are eligible for $3 million under the program, with approval of the Minister.

Annex 10: Other programs and services – innovation programs

Canadian Agricultural Strategic Priorities Program

Provides non-repayable contributions for industry-led projects, with the objective of helping the sector seize opportunities, respond to emerging issues, and pilot solutions to adapt and remain competitive.

$50.3 million over 5 years providing up to $10 million per year to fund projects that are national or sectoral in scope and support industry to develop a new idea, product, niche, or market opportunity; address issues that were unknown or not a concern before; and investigate and test new ways of dealing with sector issues.

Focuses on the following priority areas:

adaptation to new technology
environmental sustainability
strategic planning and capacity building;
emerging issues

Launched February 2019 and as of August 2021 received 91 pre-screening summaries and 36 full proposals; 22 projects have been approved, for a total commitment of $14.8 million.

Innovative Solutions Canada

Innovative Solutions Canada is a ISED-led program with over $100 million annually supporting scale up and growth of Canada’s SME innovation capacity towards federal government-based projects and developing solutions to sector-based challenges. AAFC has an annual commitment of $3.9 million towards this program.

Supports partnerships between departments and agencies and Canadian innovators in development of early stage, pre-commercial innovations with the ultimate goal of promoting growth of Canada’s small businesses.

Launched in December 2017 with the participation of 20 departments and agencies.

Phase 1 projects are awarded up to $150,000 (Proof of Concept); Phase 2 projects (Prototype Development) are awarded up to $1 million; and Phase 3 (Pathways to Commercialization) offer various amounts determined by each Department.

As of August 2021, AAFC has posted five challenges:

Improved Compostability of Bioplastics. A joint challenge issued by AAFC and Natural Resources Canada; part of Canada’s larger commitment to reduce plastic waste while growing the economy and creating good jobs. EcoEnviro Labs and Titan Clean Energy Projects Corp. were awarded Phase 2 Funding.
Scaling Down Precision Agriculture. Troo Corp. and Expert Systems Inc. were awarded Phase 2 funding.
Canadian Meat Processing Automation. Exonetik, mode40 and POSS Design were awarded Phase 1 funding.
Controlled Environment Agriculture Farming. Approval processes are currently underway for Phase 1 funding.
Efficient Soil Sampling Techniques. Recipients were selected, and the contracting process is underway.

Annex 11: Other programs and services – Indigenous programs and services

Indigenous Agriculture and Food Systems Initiative

A 5-year (2018-23), $8.5-million initiative that aims to increase economic development opportunities for Indigenous peoples and communities by building their capacity to better participate in the agriculture and agri-food sector.

The IAFSI is implemented with support from Indigenous Services Canada with a $6-million contribution through the Government of Canada’s Strategic Partnership Initiative, and $2.5 million from AAFC. Projects must clearly generate an economic development opportunity for Indigenous peoples and communities in Canada and benefit the agriculture and agri-food sector.
AAFC may contribute funding for up to 90% of the project’s total eligible costs. The maximum AAFC contribution to a project will normally not exceed $500,000 per project per year, or a maximum of $2.5 million over 5 years.
As of September 2021, 109 applications were received; 18 were approved, totalling $6.2 million. In early fiscal year 2021-22, a defined intake approach was implemented, and additional AAFC funds were allocated to support the remaining 2 years. Due to high demand, the application intake has been suspended. The program is currently assessing 72 applications.

The Indigenous Pathfinder Service

Was established in 2018 and provides one-on-one client support to Indigenous peoples who would like to enter the Agriculture and Agri-Food sector or are looking to expand their operations.

The primary role of the Indigenous Pathfinder Service is to:

Listen to client’s project ideas;
Offer advice on project ideas and help Indigenous clients align their projects to AAFC program eligibility;
Identify programs and services available to Indigenous peoples;
Guide Indigenous peoples through application processes for AAFC programs and services;
Facilitate meetings between program managers and Indigenous peoples; and
Participate in various departmental, federal, provincial and regional working groups or industry groups.
The Service also collaborates with other federal departments, provincial and regional officials to find programs and services that benefit Indigenous peoples that are not offered by AAFC (Program Gap Analysis).
The Service frequently meets with industry organizations and Indigenous peoples to promote AAFC programs and services.

Annex 12 COVID-19 emergency support programs

Emergency Food Security Fund

$300 million to ensure continued access to food for Canadians experiencing food insecurity due to the pandemic.

Initially launched April 2020 as an emergency stream of the Local Food Infrastructure Fund (LFIF).

$30 million has been transferred to Indigenous Services Canada towards their Indigenous Community Support Fund to support food security initiatives.

$140 million of additional food security funding was announced in Budget 2021; $100 million was allocated to the Emergency Food Security Fund for this fiscal year; $10 million was allocated to the LFIF, and $30 million remains unallocated for potential strategic initiatives.

Funding has been provided or is in process, to Food Banks Canada ██████████ ████, Second Harvest ██████████ ████, Breakfast Club of Canada ██████████ ████, Community Food Centres Canada ██████████ ████, Salvation Army ██████████ ████, and La Tablée des chefs ██████████ ███. As of August 2021, these organizations have redistributed the funds through more than 4,700 initiatives supporting communities at risk of food insecurity across Canada.

Emergency Processing Fund (fully subscribed; program closed)

Supports food processors to implement measures to protect the health and safety of workers and their families in response to the pandemic. The Emergency Processing Fund also supports facility upgrades to help strengthen Canada’s food supply.

Launched with initial investment of $77.5 million; an additional $10 million of internal funds was allocated, totaling $87.5 million.

Provides up to $5 million per recipient in non-repayable funding for emergency COVID-19 response activities (Objective 1) and repayable funding for strategic investments (Objective 2).

As part of the total funding envelope, four regional delivery organizations across the country received $5 million each, totalling $20 million, to support smaller projects less than $100,000.

At the national level, approved 171 Objective 1 projects for companies to make facility changes (e.g., purchasing reusable personal protective equipment, etc.); Supported 15 strategic investment projects (Objective 2) to assist companies to improve, automate, and modernize facilities needed to increase Canada’s food supply; and the four regional delivery organizations funded 373 projects.

Mandatory Isolation Support for Temporary Foreign Workers Program

$142 million to address impacts of COVID-19 on the food supply in Canada by assisting the farming, fish harvesting, and food production and processing sectors.

Assists Canadian employers of temporary foreign workers (TFWs) with some of the incremental costs associated with the mandatory 14-day isolation period and costs associated with the 3-day hotel quarantine imposed under the Quarantine Act on TFWs upon entering Canada.

The federal government provided employers with support for:

14-Day Isolation Period Stream: up to $1,500 per TFW arriving between March 26, 2020, and June 15, 2021, and $750 for each TFW arriving between June 16, 2021, and August 31, 2021, to help offset some of the incremental costs associated with the mandatory 14-day isolation period imposed under the Quarantine Act.
3-Day Hotel Quarantine Stream: up to $2,000 per TFW required to quarantine at a government-authorized facility upon entry into Canada is available for arrivals between March 21, 2021, and August 8, 2021. Funding is conditional on employers not being found in violation of the mandatory 14-day isolation quarantine requirements.

As of August 13, 2021, the Program approved 5,178 projects for $92 million.

Surplus Food Rescue Program (fully subscribed; program closed)

$50 million to support Canada’s food system, food processors, food producers, and distributors to ensure food availability for all Canadians.

Allowed the purchase, processing, transportation and redistribution of surplus food.

Aimed at rescuing surplus commodities otherwise going to waste, fairly compensating agricultural producers and agri-food harvesters and processors, and ensuring the food reached vulnerable populations in Canada.

Designed to address urgent, high volume, highly perishable surplus products falling under horticulture, meat and fish and seafood.

Contributions were awarded to nine organizations that leveraged existing food redistribution and recovery networks and agencies bringing food to every region in the country.

Helped rescue and distribute 8 million kilograms of surplus food to food banks and community food organizations across Canada.

Budget distribution

Yearly allocation, based on Fiscal Year 2021-2022, as of September 14, 2021

Agriculture and Agri-Food Canada Programs: Canadian Agricultural Partnership Programming from 2018 to 2023
Description of the above image
The Canadian Agricultural Partnership is a $3-billion investment including
- $1 billion in federal programs and activities
- $2 billion in cost-shared programs and activities by federal, provincial and territorial governments
Federal only programs $1 billion over 5 years

Growing trade and expanding markets
- AgriMarketing allocates $121 million over 5 years, which helps the industry increase and diversify exports
- AgriCompetitiveness allocates $20.5 million over 5 years, which assists industry to build capacity through information-sharing activities
Innovative and sustainable growth of the sector
- AgriInnovate allocates $128 million over 5 years which supports the commercialization, adoption, and/or demonstration of innovative agri-based products, technologies, processes or services
- AgriScience allocates $338 million over 5 years which supports leading-edge innovation and discovery/applied science
- AgriScience Projects support to short-term projects
- AgriScience Clusters partnerships to address priorities that are national in scope
Supporting diversity and a dynamic, evolving sector
- AgriDiversity allocates $5 million over 5 years which helps underrepresented groups, e.g., Indigenous Peoples, youth, women, persons with disabilities, participate in the sector
- AgriAssurance allocates $74 million over 5 years which supports industry systems, standards and tools related to the health and safety of Canadian agri-food products, and how they are produced
FPT cost-shared programs $2 billion over 5 years

Programs designed and delivered by provinces and territories tailored to meet region-specific needs.

Costs are shared 60% about $1.2 billion by the federal government and 40% about $800 million by provincial/territorial governments

Regional Collaborative Partnerships Program allocates $3 million over 5 years supports, enables and encourages provinces and territories to address shared challenges and/or priorities, and further encourages regional collaboration based on the six priority areas.

Business Risk Management Programs

In addition to $3 billion under CAP, BRM programs provide agricultural producers with protection against income and production losses, helping to manage risks.

AgriRisk allocates $55 million over 5 years Supports the development of new risk management tools

Funding of the following programs fluctuates with an annual average of $1.6 billion in payments
- AgriInvest offers cash flow to help producers manage income declines
- AgriInsurance offers cost-shared insurance against natural hazards to reduce the financial impact of production or asset losses
- AgriRecovery Framework delivers disaster recovery relief following natural disaster events
- AgriStability provides support when producers experience a large margin decline
Suite of programs to address business, environmental and emerging risks, and drive innovation and growth

Description of above image
Non-CAP risk management

Canadian Agricultural Loans Act allocates $100 million (annual average) which provides easier access to credit to establish, improve and develop farms, and loans to process, distribute or market the products of farming.

Advance Payment Program allocates $2.3 million (annual average) which provides easier access to credit through cash advances to support flexible marketing decisions.

Environmental

Agricultural Clean Technology Program allocates $165.7 million over 7 years which supports research, development and adoption of clean technologies.

Agriculture Climate Solutions – Living Labs Program allocates $185 million over 10 years which convenes stakeholders to facilitate development and application of on-farm practices with environmental benefits.

Agricultural Climate Solutions – Farm Climate Action Fund allocates $200M over 3 years which supports adoption of GHG reduction practices on-farm.

Innovation

Innovative Solutions Canada allocates $3.9 million per year to AAFC where federal projects to support growth of SME innovations and solutions to sector challenges [part of ISED-led +$100 million per year program.

Canadian Agriculture Strategic Priorities Program allocates $50.3 million over 5 years which supports sector to seize opportunities, respond to emerging issues, and pilot solutions to adapt and remain competitive.

Supply management

Poultry and Egg On-Farm Investment Program allocates $647 million over 10 years which helps supply-managed poultry and egg producers adapt to market changes resulting from the Trans-Pacific Partnership.

Market Development Program for Turkey and Chicken allocates $44 million over 10 years which helps increase domestic demand and consumption of Canadian poultry products.

Dairy Direct Payment Program allocates $1.75 billion over 4 years where payments to help cow milk producers transition to new market realities from international trade agreements.

Dairy Processing Investment Fund allocates $100 million over 4 years which provides funding to improve productivity/competitiveness in the dairy processing sector.

Dairy Farm Investment Program allocates $250 million over 6 years which assists Canadian cow milk producers to improve productivity through upgrades to their equipment.

Food Policy

Food Waste Reduction Challenge allocates $20 million over 4 years which contributes to reducing food production and processing waste, and to lowering greenhouse gas emissions.

Local Food Infrastructure Fund allocates $60 million over 5 years which aims to strengthen food systems and facilitate access to safe/nutritious food for communities.

Other

Indigenous Agriculture Food Systems Initiative allocates $8.5 million over 5 years which builds capacity for Indigenous Peoples to participate in the agriculture and agri-food sector.

Youth Employment and Skills Program allocates $1.1 million annually which funds agricultural work internships for youth and youth facing barriers. Received incremental funding of $9.2 million in 2020-21 and $21.4 million in 2021-22.

COVID-19 response programming

Emergency On-Farm Support Fund allocated $40.3 million, which ended March 31, 2021. Helped farmers cover some of the additional costs of keeping farm workers safe from COVID-19

Emergency Processing Fund allocated $87.5 million, which ended Spring 2021. Helped companies implement changes to protect workers due to the COVID-19 pandemic and make investments needed to increase Canada’s food supply capacity

Mandatory Isolation Support for Temporary Foreign Workers (TFW) Program allocated $142 million, which is ending Fall 2021.

14-Day Isolation Support assisted with some costs associated with TFW mandatory isolation under the Quarantine Act.

3-Day Hotel Quarantine Support assisted with some of the costs associated with TFW 3-day hotel quarantine imposed under the Quarantine Act.

Surplus Food Rescue Program allocated $50 million, which ended March 31, 2021, helped organizations distribute otherwise destroyed surplus food to populations in need.

Emergency Food Security Fund allocated $300 million, which is ending March 31, 2022, supports access to food for food insecure Canadians due to the COVID-19 pandemic.

AgriRecovery Framework (under CAP) allocated $125 million, which provides assistance to help farmers with the extraordinary costs incurred as a result of the pandemic.

	($)	(%)
Business Relationship Management	1,434,034,348	56
Cost-shared	206,480,000	8
Canadian Agricultural Partnership Federal	102,705,069	4
Other	818,047,344	32

Agriculture and Agri-Food Canada science, technology and research activities

AAFC’s science strategic objectives

AAFC is the largest agricultural science research organization in Canada with activities and investments guided by four strategic objectives:

Increasing agricultural productivity

Breeding new crop varieties
Improving input efficiency
Finding uses for marginal land
Increasing livestock productivity through feed efficiency, breeding, etc.

Improving attributes for food and non-food uses

Enhancing food processing, packaging, and shelf life
Improving marketable traits and characteristics
Developing alternatives to antimicrobials
Maximizing the health potential of cereals

Addressing threats to the value chain

Ensuring food safety in agricultural production and food-processing systems
Mitigating impact of external effects like weather, pests, diseases, etc.

Enhancing environmental performance

Maintain/enhance water and air quality, soil productivity and health
Protecting biodiversity
Mitigating greenhouse gas production
Low-risk pest control options

The four strategic objectives are pursued through research into crop and livestock production systems, agri-food, bio-resources and the dynamics between agriculture and the environment.

Agriculture research continuum

The agriculture research continuum: AAFC focuses largely on foundational, long-term, higher-risk research with wide public benefits, such as variety development, environmental performance, agro-climate monitoring and modeling, maintaining biological collections, addressing emerging pest, and disease threats to agriculture. Private sector focus tends to be strongest for downstream near-market activities.

Notable areas of research

Plant breeding

Using new breeding tools and gene studies to find traits for crops that are more productive, nutritious, and/or adaptable to stressors like disease, weather, and pests.

Livestock health

Investigating how we raise, feed and care for livestock, while improving their health, welfare and productivity.

Crop inputs/agronomy

Improving how we fertilize our crops while reducing waste and run off, and determining new and enhanced methods to address pests and diseases (for example, beneficial organisms, biopesticides and precision agriculture.

Environmental research

Improving water, soil and air quality, enhancing biodiversity, and improving sustainability of agricultural practices while reducing agriculture’s environmental footprint.

Climate change science

Helping farmers adapt to climate change by developing water management innovations and new crop varieties resilient to changing conditions, mitigating greenhouse gas emissions from inputs (fertilizers, manure), enhancing soil carbon sequestration, and investigating low-methane producing livestock feed.

AAFC’s Climate Change Roadmap will mobilize departmental experts and scientists to identify the most appropriate policy and program interventions to maximize sector contribution to greenhouse gas mitigation targets.

AAFC science and innovation successes

Adoption of zero tillage in Western Canada – perhaps the most important agricultural innovation of the past fifty years

AAFC was key in developing technologies encouraging the high rate of zero tillage adoption in Western Canada. Farmers increased their cropping intensity, diversity, and yields, while reducing fuel and labour requirements, leading to significant manufacturing industry development (for example, seeding equipment).

Protecting water quality in the “bread basket" of Canada

AAFC scientists pioneered research in nutrient management and provided the scientific foundation for the 4Rs of applying fertilizer on cropland: right place, right time, right source, and right rate. This concept now guides nutrient management decisions and research across Canada, which helps protect our water quality.

Canadian oat discovery reaching new heights

Discovered by AAFC, avenanthramides are naturally occurring oat compounds that soothe itchy skin and reduce redness and inflammation. AAFC developed a malting technology that increases avenanthramides concentration in oats. Canada’s Ceapro Inc. is the only licensed company in the world commercializing avenanthramides for cosmetics, nutraceuticals, etc.

Intellectual property development

AAFC maintains patents and ownership of plant genetics, technologies, concepts, and other scientific outputs developed by staff while they work at the Department and/or those who use the facilities, equipment, or financial aid provided by the Government of Canada.

The ownership of these assets allows AAFC to share its valuable outcomes to the benefit of Canadians through:

The public release of this knowledge for application; or
Licensing opportunities to generate funding for more research.

By owning this information, AAFC can also enhance existing value by using these patents as a building block in developing new innovation or knowledge.

**AAFC’s intellectual property and commercialization (2020–2021)**
162	Active patents in 32 countries
470	AAFC plant varieties currently grown
686	Active licenses
462	Collaborative agreements executed with external parties in 2020–2021

Communicating our science

AAFC scientific breakthroughs are shared to help the agriculture sector to:

Build resilience in the fight against climate change
Provide safe and sustainable crop protection
Provide food security in northern and Indigenous communities
Ensure access to healthy food
Reduce food waste
Keep our water safe and clean

AAFC transfers this information to stakeholders via

Collaborative research agreements where partners pass knowledge to stakeholders
Licenses for technologies/plant varieties are made available for Canadian commercialization
Open house and field day events where AAFC innovation is exhibited
Science publications: approximately 1,500 a year (peer reviewed and not peer reviewed)
Digital platforms like videos, podcasts, and AAFC online content, like annual reports

Innovative co-development model for better applicability and adoption

The Living Laboratories Initiative is an innovative research approach that focuses on bringing farmers, scientists, government, Indigenous groups and other partners together to co-develop, test and implement relevant science-based management practices and technologies, in a “real life” context. Outcomes are regionally specific and encourages more widespread adoption by farmers in those areas.

Science partners and partnerships

AAFC works with partners to conduct collaborative research, and transfer knowledge that meets the sector’s needs and advances innovation in science. Partners include:

Other federal government departments

academia
provinces and territories
industry
Indigenous Peoples
international partners

AAFC is building stronger relationships with Indigenous peoples and advancing reconciliation by supporting Indigenous-led agricultural research and increasing Indigenous representation in AAFC’s science community, for example:

AAFC hosts the Interdepartmental Indigenous STEM Cluster, which informs federal efforts towards Indigenous land-based research and environmental stewardship.

AAFC international science engagement

AAFC enhances agricultural science and knowledge exchange through international engagement to modernize the Canadian agricultural sector and promote its competitiveness.

International AAFC science: Scientific collaboration and joint research with priority countries/organizations to leverage AAFC science capacity and investments for mutual beneficial outcomes.

Emerging priorities: Anticipates and responds quickly to national and international emerging priorities, with factual science-based information.

Influences the international agricultural research agenda: Reinforces Canadian science leadership and ensures that international norms are science-based and support the sector.

Market access: Supports market access through science diplomacy.

AAFC science supports international bodies

G20
Food and Agriculture Organization of the United Nations
Organisation for Economic Co-operation and Development
Global Research Alliance on Agricultural Greenhouse Gases

Looking forward

Continue to advance AAFC scientific expertise and target program spending to areas of emerging opportunities (for example, digital technologies and automation).
Focus research efforts to address key issues and emerging threats (for example, climate change).
Strengthen partnerships with industry, other government departments, Indigenous groups and the science community.
Work with provincial and territorial counterparts to enhance science and innovation efforts through the next agricultural policy framework.
Finalize the Strategic Plan for Science at AAFC, which will include a long-term vision for research and framework for departmental investment and identify high-priority areas of agricultural research (for example, sector sustainability, economic growth and sector resilience).

Agriculture and Agri-Food Canada science and research
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Science and innovation is central to the mandate of AAFC and key to positioning the sector for growth, competitiveness and resilience.

A strong regional and national science and innovation capacity at AAFC there are 436 scientists, 1,149 scientific support staff, 20 research and development centres, 30 satellite research locations and 717 active research and development projects.

Science strategic objectives
- Increase agricultural productivity e.g. breeding new crop varieties
- Improve attributes for food and non-food uses e.g. enhancing food processing, packaging and shelf life
- Address threats to the value chain e.g. Mitigating impact of external effects like weather, pests, diseases, etc.
- Enhance environmental performance e.g. mitigating and building resilience to climate change
Supporting Indigenous-led agricultural research

AAFC is building stronger relationships with Indigenous peoples and advancing reconciliation by supporting Indigenous-led agricultural research and increasing Indigenous representation in AAFC’s science community

Some scientific accomplishments
- As part of an international team, AAFC scientists are using the latest satellite and Earth observation technology to enhance agricultural monitoring systems to help increase market transparency and improve food security.
- AAFC researchers found a new sustainable and economical way to help producers protect their greenhouse vegetables from pests by encouraging the right predatory insects to do the work for them in exchange for a well-balanced diet.
- In co-operation with industry, AAFC scientists developed a new web-based decision support tool to help producers get optimal quality and yield from their forages by providing farmers with current and accessible weather information.
Three key considerations for research and the efforts underway to address them

Balancing discovery and commercialization

Canadian Agricultural Partnership from 2018 to 2023. Science and research account for a significant proportion of CAP activities that support the innovative and sustainable growth of the sector.

Under CAP there are two sub-programs that focus on science and research.
- The AgriScience Program allocates $338 million, supports collaborative pre-commercial science activities and cutting-edge research with industry, government and academia on priority themes and horizontal issues that are national in scope
- AgriInnovate Program allcoates $128 million to support short-term projects to help small and emerging sectors overcome challenges and/or fiscal barriers to commercialize and adopt innovative products or processes
CAP also contributes to the following key considerations.

Rapidly advancing science and technology
- Agricultural Climate Solutions allocates $185 million towards the development of a Canada-wide collaborative network to tackle climate change using a Living Laboratory model, it is part of the $4-billion Natural Climate Solution Fund.
- Advance research in agricultural genomics allocates $30 million to support DNA analysis and digital recording of AAFC biological collections.
The following programs also contribute to rapidly advancing science and technology.

Support inclusive engagement

Includes the Advance Agricultural Discovery Science and Innovation by allocating 70 million dollars towards the following three sub-programs.
- The Interdepartmental Research Initiative in Agriculture allocates 8.6 million dollars to support federal-sector collaborative projects advancing cutting edge technologies and environmental resiliency
- The Accelerated Staffing Initiative allocates 44 million dollars to hire scientists in new and emerging areas while improving the diversity in the department
- Living Laboratories Initiative allocates 17.4 million dollars convening on-farm producers, scientists, Indigenous Peoples, and other stakeholders to co-develop and apply practices that provide environmental co-benefits
Federal-provincial-territorial relations

Agriculture is an area of shared jurisdiction

Section 95 of the Constitution Act (1867) establishes that jurisdiction over primary agriculture is concurrent for federal and provincial and territorial (FPT) governments.
- While both orders of government can create their own agricultural programming, some areas of jurisdiction are clear:
- Section 91(2) gives the federal government jurisdiction over international and inter-provincial trade and commerce.
- Provinces have responsibility for intra-provincial trade and commerce under Section 92(13).
- The federal spending power also enables the advancement of national priorities.
Overall, the FPT relationship in agriculture is strong and characterized by close collaboration in order to maximize benefits and investments for a competitive and sustainable agriculture and agri-food sector.

FPT collaboration occurs on many levels

Ministers engage multilaterally through the FPT Ministers of Agriculture table to set FPT policy direction in key areas such as the environment, discuss programming enhancements such as recent changes to the AgriStability program, and to address emerging challenges and threats (for example, COVID and African Swine Fever).

The bilateral relationship complements the multilateral effort, and speaks to the varied local and regional agricultural landscape across Canada. Engagement occurs on issues including, but not limited to, PT tailored AgriRecovery responses to circumstances such as the drought, and research and science partnerships to address the needs of the jurisdiction.

And, separate federal and provincial/territorial action also occurs – the federal government has the discretion to create federal-only policies/programs (for example, agricultural clean technology), as do the provinces and territories (for example, domestic market development).

Agriculture is an area of shared jurisdiction

Section 95 of the Constitution Act (1867) establishes that jurisdiction over primary agriculture is concurrent for federal and provincial and territorial governments.

While both orders of government can create their own agricultural programming, some areas of jurisdiction are clear:
- Section 91(2) gives the federal government jurisdiction over international and inter-provincial trade and commerce.
- Provinces have responsibility for intra-provincial trade and commerce under section 92(13).
- The federal spending power also enables the advancement of national priorities.
Overall, the FPT relationship in agriculture is strong and characterized by close collaboration in order to maximize benefits and investments for a competitive and sustainable agriculture and agri-food sector.

FPT collaboration occurs on many levels

Ministers engage multilaterally through the FPT Ministers of Agriculture table to set FPT policy direction in key areas such as the environment, discuss programming enhancements such as recent changes to the AgriStability program, and to address emerging challenges and threats (e.g. COVID and African Swine Fever).

The bilateral relationship complements the multilateral effort, and speaks to the varied local and regional agricultural landscape across Canada. Engagement occurs on issues including, but not limited to, PT tailored AgriRecovery responses to circumstances such as the drought, and research and science partnerships to address the needs of the jurisdiction.

And, separate federal and provincial/territorial action also occurs – the federal government has the discretion to create federal-only policies/programs (for example, agricultural clean technology), as do the provinces and territories (for example, domestic market development).

The FPT model is strengthened through agricultural policy frameworks

The Canadian Agricultural Partnership (CAP), the fourth in a series of multilateral framework agreements dating to 2003, formalizes the relationship among governments and defines how partners work together.

CAP sets out a common vison and priorities for a five-year $3-billion investment by FPT governments to strengthen and grow Canada's agriculture and agri-food sector.

CAP includes an additional $1.6 billion annually (on average) for Business Risk Management programs.

When the current agreement expires, it will be replaced by the next policy framework (NPF) (name to be determined) that will likely run from 2023 to 2028.

Through the Partnership:
- Cost-shared program details are defined in bilateral agreements between the federal government and each province and/or territory at a 60:40 funding ratio.
- Provinces and territories deliver the cost-shared programming in their jurisdictions.
- Federal-only programs are delivered by Agriculture and Agri-Food Canada (AAFC).
Strengths of the framework approach

National outcomes with regional adaptability

Common policy priorities bring greater consistency and clarity for the sector wherever they live in Canada, with flexibility based on commodities, conditions, local delivery and administration.

Maximizing investments

Leveraging FPT resources (60:40 F:PT cost share), while ensuring predictable supports through a common vision and priorities.

Minimizing trade risks

Ensuring that supports given to producers are compliant with our current trade obligations.

Coordination to overcome barriers and collaboration on cross-cutting issues

Arrangements exist between AAFC portfolio agencies and PT governments on issues relating to regulatory matters such as: food, animal health and plant protection, supply management and grain handling.

AAFC and PTs work together, for example, with their respective departments of labour and skills development to advance efforts in recruitment, skills and training.

Key AAFC roles

National policy development, such as:
- Working to access and develop new markets for the benefit of the entire sector;
- Ensuring producers and processors have access to the best science and innovation; and
- Achieving national coherence in priority areas, such as addressing environment and climate change.
Ensuring complementarity of actions and accountability for investments.
- Seeking multilateral action in certain cases while also pursuing federal-only action in others; balancing national outcomes with regional flexibilities;
- Support the collection of data and reporting of results achieved through CAP initiatives.
Facilitating relationships with other federal departments and agencies and provinces and territories on items that intersect with their mandates.
- Labour and Temporary Foreign Workers (Immigration, Refugees and Citizenship Canada and Employment and Social Development Canada), Trade (Global Affairs Canada), Regulations (Canada Food Inspection Agency), Aquaculture (Fisheries and Oceans Canada), Movement of goods (Transport Canada).
Annual conference

An Annual Conference of FPT Agriculture Ministers traditionally occurs in person every July to help set policy direction and foster collaboration on common issues.
- The Conference also offers opportunities for sector engagement and to showcase regional agriculture in the host location.
- Due to COVID-19 and the federal election, the 2021 Annual Conference has not occurred. Ministers have met virtually on a frequent basis to address the pandemic and other issues.
The federal minister chairs the FPT table, with a provincial or territorial co-chair that rotates on an annual basis.
- Ontario has served as the provincial co-chair since July 2019, extending its tenure due to the COVID-19 pandemic.
- At the end of the 2021 Annual Conference, the provincial co-chair will pass to Saskatchewan.
Ontario is tentatively set to host the 2021 Annual Conference on November 8 to 10, 2021, in Guelph, subject to federal confirmation.

Current and ongoing FPT priorities

The FPT table has been seized with a number of topics, which are expected to be discussed at upcoming engagements:

A vision and priorities for the next policy framework (NPF) to replace CAP
- Typically, a Policy Statement for the NPF would be issued as part of the 2021 Annual Conference
Examining approaches to enhancing Business Risk Management (BRM) Programs

Drought conditions in Western and Central Canada

Trade and market access issues

Agri-environment issues and climate change

Retail fees and the supplier-retailer relationship

Labour shortages and access to temporary foreign workers

Preparing for a case of African swine fever (ASF)

Regulatory priorities, including to facilitate interprovincial trade

Next steps

Determine timing, nature and content of upcoming FPT Ministerial Annual Conference.

Establish priorities for the next policy framework, and review the draft policy statement.

Annex — PT landscape: British Columbia

The British Columbia primary agriculture sector produced $3.9 billion in 2020 farm cash receipts, with agriculture and agri-food representing 3% of provincial GDP.

Third largest employer of temporary foreign workers (TFWs) and ███████████████████████████████████████████████████████████████████████████████████████████

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Annex — PT landscape: Alberta

The Alberta primary agriculture sector produced $15.5 billion in 2020 farm cash receipts, with agriculture and agri-food representing 3% of provincial GDP.

AB is Canada’s largest beef-producing province, with the largest beef processing facilities. ██████████████████████████████████████████████████

Has been experiencing major drought.

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Annex — PT landscape: Saskatchewan

Saskatchewan is the largest agriculture producing province, it is the top producer of wheat, canola, oats, flax, dry peas, lentils, and chickpeas, and has large beef and hog sectors.

Saskatchewan’s primary agriculture sector produced $16.6 billion in 2020 farm cash receipts, with agriculture and agri-food representing 10% of provincial GDP.

Has been experiencing major drought.

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Annex — PT landscape: Manitoba

The Manitoba primary agriculture sector produced $7 billion in 2020 farm cash receipts, with agriculture and agri-food representing 8% of provincial GDP.

Manitoba’s is the national leader in developing emerging sectors, including plant-based technology and value-added processing.

Manitoba is the one of the top hog producing ██████████████████████████████████████████████████████████████

Has been experiencing major drought.

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Annex — PT landscape: Ontario

Ontario’s primary agriculture sector produced $16.1 billion in 2020 farm cash receipts, with agriculture and agri-food representing 3% of provincial GDP.

Has been experiencing major drought in northwestern Ontario.

Largest employer of Temporary Foreign Workers (TFW) and ███████████████████████████████████████████████████████████████████████████████████

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Annex — PT landscape: Quebec

The Quebec primary agriculture sector produced $10.3 billion in 2020 farm cash receipts, with agriculture and agri-food representing 4% of provincial GDP.

Quebec Minister Lamontagne is the co-chair of the FPT Retail Fees Working Group which is working to support industry develop a retail code of conduct.

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Annex — PT landscape: Atlantic Canada

Agriculture is a major economic driver in the Atlantic region, with a diverse sector including primary producers, processors, and aquaculture production. The Atlantic agriculture sector is small compared to the rest of the country but still accounts for a sizable percentage of provincial GDP. ████████████████████████████████████████████████████████████████████

New Brunswick: $878 million in 2020 farm cash receipts, with 4% of New Brunswick GDP (agriculture and agri-food only).

Nova Scotia: $598 million in 2020 farm cash receipts, representing 2% of Nova Scotia GDP (agriculture and agri-food only).

Prince Edward Island: $605 million in 2020 farm cash receipts, representing 9% of Prince Edward Island GDP agriculture and agri-food only).

Newfoundland and Labrador: $130 million in 2020 farm cash receipts, representing 2% of Newfoundland and Labrador GDP (agriculture and agri-food only).

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Note: Nova Scotia recently elected a new government, which may affect their positioning

Annex — PT landscape: Territories

The three territories have a small, but growing agriculture sector.

Primary agriculture represents less than 1% of GDP in each of the Territories.

There is minimal participation of the territories in BRM programming.

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Stakeholder engagement in the agriculture and agri-food sector

Overview of sector stakeholders

The agriculture portfolio has one of the most expansive and active networks of stakeholders, representing the diversity of the sector, the interests of their members and the breadth of the food system (see Annex A). They include:
- Cross sector associations (for example, Canadian Federation of Agriculture);
- National sector associations (for example, Canadian Cattlemen’s Association);
- Regional sector associations (for example, Saskatchewan Pulse Growers);
- Value chain associations (for example, Canola Council of Canada); and
- Others involved in the food system (for example, 4H Canada, Farmers for Climate Solutions, food security organizations, academia, innovation accelerators).
Stakeholder associations perform a variety of functions for their members such as promotion and marketing, collaborating with other organizations to advance interests, and regularly engaging with governments on priorities.

Importance of sector engagement

Engagement with stakeholders is critical to AAFC’s work and supports many objectives:
- Provides the department with producer and processor perspectives to inform policy and program development;
- Builds trust and regional intelligence to enable quick responses, particularly in times of emergency (for example, drought and COVID-19 programming);
- Offers a means to communicate with, mobilize and consult a broad membership within the agricultural sector;
- Enables the department to partner with the sector in the delivery of specialized programming (for example, science and research); and
- Offers specialized knowledge to the department through organizational reports and data collection (for example, information on labour shortages).
Certain stakeholders also perform public functions, such as discharging legislative responsibilities and setting standards for members (for example, the Dairy Farmers of Canada).

How AAFC engages

Extensive engagement, consultation, and collaboration with stakeholders are built into many aspects of the Department’s work in order to ensure policies, programs, and activities are designed and delivered effectively.

AAFC has a number of existing formal and informal mechanisms to engage with the sector. These include:
- National consultations on major policies (for example, the national engagement sessions on the next policy framework);
- Forming government-industry working groups on key issues (for example, supply management compensation);
- The creation of bodies through ministerial appointment to advise on issues (for example, National Program Advisory Committee, Canadian Agricultural Youth Council, Canadian Food Policy Advisory Council); and
- Working with stakeholders bilaterally and at the local level through regional offices on emerging issues (for example, labour disruptions, drought conditions).
Sector engagement tables

Sector engagement tables build upon the success of value chain roundtables to create a more strategic dialogue amongst government and industry in order to collectively advance sector growth and competitiveness.

Thematic Engagement Tables (all are launched)

Focus on systemic, cross-cutting issues that affect the sector as a whole
- Agile regulations
- Sustainability
- Consumer demand and market trends
- Skills development
Sector Advancement Tables (launch of these tables is pending)

Five tables that focus on implementing solutions to systemic issues in context of their sub-sectors.
- Animal protein
- Field crops
- Horticulture
- Seafood (pending discussion with Fisheries and Oceans Canada)
- Food processing
AAFC also collaborates across the federal government to bring sector perspectives to horizontal initiatives

Environment and clean technology

Environment and Climate Change Canada (ECCC), Natural Resources Canada (NRCan)

Market development and trade

Global Affairs Canada (GAC)

Food security

Crown-Indigenous Relations and Northern Affairs Canada, Health Canada, Employment and Social Development Canada (ESDC), and ECCC

Labour

ESDC, Immigration, Refugees and Citizenship Canada (IRCC)

Policy and financial issues, tax policy

Privy Council Office, Finance and Treasury Board Secretariat

Data development and analysis

Statistics Canada

Supply chains

Transport Canada, Innovation Science and Economic Development (ISED)

Innovation and growth

ISED, Regional Development Agencies

Seafood and aquaculture

Fisheries and Oceans Canada

Examples of recent strategic engagement

During the COVID 19 pandemic, the department engaged extensively through sector virtual meetings with hundreds of stakeholders and smaller targeted virtual meetings on specific issues of concern. This provided the department with input on COVID’s impact on the sector and helped in the development of the Government’s response to these issues.

Challenges associated with the availability of labour, in particular temporary foreign workers (TFW), were heightened during the pandemic. The department significantly increased its engagement with stakeholders and federal partners responsible for the TFW program (ESDC, IRCC, Service Canada, etc.) to identify issues and find solutions to logistical challenges with the safe arrival of TFWs in Canada.

On international trade, the department has an established group of stakeholders that it consults with on an ongoing basis. This engagement intensifies when trade negotiations are active or when a trade irritant is identified.

Launched in June 2021, consultations with stakeholders on the next policy framework will inform priorities and programming for the future. Four national engagement sessions and one Indigenous-specific session have been held so far. Engagement will continue throughout 2022 and will make special considerations to include the perspectives of women, youth and minority groups.

Annex

Cross-sectoral associations

The Canadian Federation of Agriculture is a national umbrella organization representing producers, composed of provincial general farm organizations and national and interprovincial commodity groups. The Union des producteurs agricoles is the largest and most active of the provincial organizations.

The Canadian Organic Growers is a national organization representing organic producers with emphasis on extension services for organic and transitioning producers. The Organic Federation of Canada is the national lead on organics standards development.

Animal production

Livestock and poultry
Supply management groups
Fish, seafood and aquaculture
Processing and others

Processing
Others
Food security

Food policy
Indigenous rightsholders

Indigenous
Trade organizations

Trade
- Canadian Agri-Food Trade Alliance
- Canada Beef Inc
- Canada Pork International
- Canadian Organic Trade Association
- Agriculture Trade Negotiations Consultations Group
- Other consultations (such as supply management
Field crops and horticulture

Field crops
Horticulture
COVID-19

Impacts on the sector and government response

Context

The COVID-19 pandemic created substantial disruptions and challenges for the entire agriculture and agri food value chain. Issues were wide-ranging and included: lost markets for many products when initial closures occurred, increased operating costs resulting from new health and safety requirements and from supply-chain disruptions, temporary processing backlogs due to plant outbreaks, and labour shortages. Supply chain disruptions also created challenges of surplus food for some products, while at the same time contributing to concerns about increased food insecurity for vulnerable populations. While these challenges were difficult to navigate, the sector largely adapted and governments acted to provide support throughout the pandemic.

Background

The Minister of Agriculture is responsible for identifying and preparing for risks related to the agriculture and agri-food sector. Throughout the pandemic, stakeholders requested various kinds of support from Agriculture and Agri‑Food Canada (AAFC) and the Government of Canada, including:
- financial support (e.g. direct payments to producers and processors to compensate for increased costs, support to emergency foodservice organizations, etc.);
- assistance in meeting new health and safety requirements (e.g. access to personal protective equipment, targeted public health guidance and communication);
- flexibility in regulatory compliance (e.g. flexible labelling requirements not related to food safety to allow surplus food labelled for the food service sector to be sold at retail);
- enhancements under existing agricultural programming (e.g. increasing the eligibility and reach of AAFC’s suite of Business Risk Management Programs).
In response to some of the issues facing the sector and Canadians, the Government of Canada created a number of new programs and adapted existing programs to respond to the needs of the agriculture and agri‑food sector, complementing other pandemic measures of general application (e.g. the wage subsidy for businesses).

Economic pressures

The pandemic resulted in significant economic pressures, such as increased operating costs and lost sales, in some parts of the sector. A number of initiatives were put in place to help the sector manage these challenges, including:

AAFC issued Stays of Default under the Advance Payments Program (APP) to ensure that farmers have the flexibility they need to manage their cash flow when facing lower prices or reduced marketing opportunities. As well, eligible farmers who still had interest-free loans outstanding had the opportunity to apply for an additional $100,000 interest-free portion for 2020–21, if their total APP advances remain under the $1-million cap. There is some flexibility for the Government to provide a Stay of Default for outstanding loans, if the administrators make a request and a payment default is pending.

In 2020, Farm Credit Canada (FCC) received an enhancement to its capital base that allowed for an additional $5 billion in lending capacity to support producers, agribusinesses and food processors. This enhanced capital remains in place.

Agriculture and Food Business Solutions Fund — a $100-million FCC venture capital fund to provide companies with the stability and flexibility they need to rebuild their business models.

Labour and worker safety

Labour remained a critical issue throughout the pandemic. Border closures and travel restrictions created concerns about access to temporary foreign workers (TFWs) and skilled technicians, particularly in the context of the spring planting season. An exemption allowing TFWs to continue to travel to Canada for work in the agriculture and processing sectors early in 2020 recognized the essential nature of this labour. Evolving entry and public health requirements (e.g. quarantine) nonetheless introduced challenges for TFWs and their employers. Collaboration between governments and sector stakeholders resulted in the arrival of 85% of expected TFWs for the 2020 season and a record number of arrivals for 2021.

The following programs were introduced to support the safe arrival of TFWs, to further protect worker safety and help address labour shortages:
- Mandatory Isolation Support for Temporary Foreign Workers (Closed) — AAFC-led, the program included two streams, the 14-Day Isolation Period Stream and the 3-Day Hotel Quarantine Stream. Further to the $84.4 million allocated in 2020–21 to assist with the cost of the mandatory isolation of temporary foreign workers, an additional $57.6 million was announced in Budget 2021 to help offset the costs associated with isolation requirements upon entering Canada and to create a second stream of the program to provide support of up to $2,000 per TFW for those who are required to quarantine in government-approved accommodations, before proceeding to their final destination. As of September 10, 2021, the 14-Day Isolation Period Stream had received 2,757 applications representing over $47.67 million in funding asks; 1,299 applications had been approved, representing over $24.14 million in federal funding. As of September 10, 2021, the 3-Day Hotel Quarantine Stream had received 147 applications, representing over $2.05 million in funding asks; 89 applications had been approved, representing over $1.37 million in federal funding.
- Emergency Processing Fund (Closed) – AAFC-led, one-time federal investment of up to $77.5 million to help companies implement changes to safeguard the health and safety of workers and their families due to the impacts of the COVID-19 pandemic. The program received an additional $10 million of unallocated internal funds, for a total of $87.5 million in funding. The program also provided funding for companies to improve, automate and modernize facilities needed to increase Canada’s food supply capacity during COVID-19. The program approved its last project in spring 2021. The program supported a total of 562 projects (national and third-party delivery) with a priority to fund projects related to worker health and safety and those in the meat processing sector.
- Emergency On-Farm Support Fund (Closed) – AAFC-led, $41 million to boost protections for domestic and TFWs and address COVID-19 outbreaks on farms. The program received a total of 1,780 applications (through both provincial and federal components), and approved 1,471.
- Youth Employment and Skills Program – AAFC-led, increased funding to existing program, adding $9.2 million in additional funding for 2020–21 to help cover the costs of hiring youth for agricultural jobs, providing additional labour support during the pandemic. As of September 10, 2021, 2,823 applications requesting approximately $27.2 million had been received with 1,948 projects approved, for a total commitment amount of approximately $19.2 million.
Supporting processing and managing backlogs

The pandemic also had impacts on the processing sector, where outbreaks led to temporary closures or reduced operational capacity. AAFC and the Canadian Food Inspection Agency (CFIA) worked closely with industry stakeholders and provincial/territorial governments throughout the pandemic to ensure the safe supply of food and trade in agricultural goods. Programs and supports included:
- AgriRecovery – AAFC-led, $125 million to launch national AgriRecovery initiatives to help producers faced with extraordinary costs incurred as a result of COVID-19, including set-asides for cattle- and hog-management programs, to manage livestock backed-up on farms due to the temporary closure of food-processing plants.
- In addition to providing temporary compliance flexibility and special provisions, CFIA activities included:
  - prioritizing critical activities, such as meat inspection, food safety investigations and recalls, animal-disease investigations, laboratory testing and export certification;
  - establishing resource-sharing agreements with provinces to ensure that there was enough staff to deliver critical inspection services in federal and provincial establishments;
  - providing frontline staff with the flexibility to adjust service delivery as needed to align with the COVID-19 situation at a given time and place.
  - actively engaging in research on novel coronavirus susceptibility of food animals (such as chicken, turkeys and pigs), as well as monitoring global Coronavirus research to determine the risk of COVID-19 transmission through food to ensure confidence in food supply and maintain trade in food products.
  - providing expertise to intergovernmental organizations, such as World Organisation for Animal Health (OIE), to better understand the virus causing COVID-19 and to develop guidance to countries for safe trade of animals and animal products.
- In 2020–21, CFIA also received a $20-million investment to respond to emerging vulnerabilities in inspection capacity for food, plant, and animal products in light of COVID-19 and to ensure an adequate, reliable food supply for Canadians. The $20 million investment was then renewed in 2021-22 to maintain required inspection capacity in meat slaughter and processing facilities due to the COVID-19 resurgence.
Food surpluses and food insecurity

Food surplus and availability was another challenge during the pandemic, with a mix of surpluses in some areas and shortages in other areas. For example, in some jurisdictions, public-health restrictions at times required full and partial closures of businesses, including those in the foodservice sector, which immediately decreased the demand for restaurant food. This reduced market demand for some products resulted in a surplus of some types of food, such as potatoes generally used in making french fries. At the same time, millions of Canadians were experiencing job losses or reduced work hours, resulting in increased financial pressures and food insecurity. The following programs responded to issues of food surpluses and food insecurity:
- Emergency Food Security Fund (Closed) (Local Food Infrastructure Fund) – AAFC-led, $300 million (three rounds of funding of $100 million each) to support Canadian food banks and other national food‑rescue organizations to help improve access to food for people experiencing food insecurity in Canada due to the COVID-19 pandemic. Indigenous Services Canada was provided with $30 million from this funding to bolster its Indigenous Community Support Fund. As of August 4, 2021, under the first two rounds of funding, the Fund had supported more than 4,800 local food initiatives across Canada, including over 1,080 directly supporting Indigenous organizations and communities. Of the additional $140 million in emergency funding announced in Budget 2021, $100 million has been allocated to the Emergency Food Security Fund (round 3 of funding), $10 million has been allocated to the Local Food Infrastructure Fund and $30 million has been set in reserve for future considerations. This additional funding needs to be fully distributed by March 31, 2022.
- Surplus Food Rescue Program (Closed) – AAFC-led, $50-million investment for a time-limited program to help manage and redirect existing surpluses to organizations addressing food insecurity and to avoid food waste. The program received 38 applications, and approved 9.
- Additional borrowing capacity of $200 million for the Canadian Dairy Commission to increase its purchases of cheese and butter, and to help producers avoid wasting food.
- In 2020, CFIA temporarily exercised enforcement flexibility for non-food safety labelling requirements for foodservice packaged products in order to help support the economy, alleviate supply disruptions in Canadian grocery stores, and avoid food waste.
Considerations and next steps

Despite significant challenges resulting from the pandemic, the sector performed relatively well throughout 2020 and into 2021, ensuring a continued supply of food products for Canadians. Programming supports from AAFC, CFIA and other Government of Canada emergency programs helped the sector to remain resilient in the face of the pandemic.

In addition to the risks and challenges traditionally facing the sector (e.g. production, markets, weather), the COVID-19 pandemic exacerbated known challenges, such as labour availability and vulnerability to supply chain disruptions, as well as required action by AAFC in new areas, such as in the distribution of food to vulnerable groups in response to food insecurity concerns. While most emergency programming has closed or has expiring funding, the pandemic has brought more attention to Canada’s food supply and self-sufficiency, and food-security challenges at both the national and local levels, as well as greater attention to the resilience of the food supply chain.

Lessons from the pandemic continue to inform AAFC policy priorities, including improving access to labour for the sector, enhancing Canada’s food systems as part of the Food Policy of Canada and Canada’s submission to the United Nations for the UN Food Systems Summit, as well as federal-provincial-territorial priorities for sector investments under the next policy framework.
Canada Food Supply Chain and COVID-19
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Agriculture and Agri-Food Canada food supply chain and COVID-19

Canada’s food supply chain continued to provide Canadians with reliable access to food and maintained healthy economic growth despite significant challenges

Canada’s food supply chain
- Input and service providers
- Primary producers
- Wholesale distributors, who import and export
- Food and beverage processing
- Food retailers, and foodservice
- Consumers
Challenges during pandemic underscored pre-existing vulnerabilities and dependencies

Limited access to labour and travel restrictions created challenges and highlighted the essential nature of food workers

Border closures, shifting demand and transportation disruptions caused challenges for just in time delivery of exports and imports

Demand fluctuations, business closures and outbreaks caused production back-ups and created food surplus in some areas and shortages in others

Existing food supply vulnerabilities were amplified due to income loss and limited transportation in rural and remote Indigenous communities

Despite challenges in 2020 from the COVID-19 pandemic, the supply chain demonstrated resiliency…

For primary producers…
- Modified practices to meet new health and safety directives on-farm.
- Record Net Cash Income of $18.1B in 2020.
- Farm Cash Receipts up 12% for the first 6 months of 2021 at $38.2B.
- 1.3% increase in operating expenses in 2020, below the 3.7% average.
For food and beverage processing…
- Shifted client-base from foodservice to retail.
- Modified in-plant practices to reflect COVID-19 realties.
- Despite a 1.5% decline in real sales, revenues increased by 2.1% to $122.2B in 2020.
- Saw a 5% increase in real sales for the first 6 months of 2021.
For food retailers and foodservice…
- Pivoted how food was provided to consumers to meet their evolving needs and preferences.
- After a 60.3% decline in sales in 2020, food service sales increased significantly in first quarter of 2021, but still 16.4% below pre-pandemic levels.
- Food retail sales increased by 10% in 2020.
- 298% rise in food retail e-commerce sales between 2019 and 2021.
Persistent food supply chain challenges:
- Labour shortages continue in multiple areas of the supply chain
- Drought is expected to reduce grain production by 30%, but strong prices mean unclear impacts on farm income
- Food access and costs remain a challenge for vulnerable groups as the Consumer Price Index for food is forecast to rise between 3% to 5%, influencing food prices and costs of production
- Supplier-retailer relations need strengthening in relation to retail fees

Book 2 - Overview documents: minister's transition book 2021, AAFC

Table of Contents

Overview of Agriculture and Agri-Food Canada

AAFC'S national and international presence

Core areas of responsibility and spending

AAFC branches and leadership team

Deputy Minister (Chris Forbes) and Deputy Minister's Office

Strategic Policy

Natasha Kim

Public Affairs

Mary Dila

Programs

Paul Samson

Information Systems

Vidya Shankarnarayan

Science and Technology

Gilles Saindon and Elizabeth Foster

Corporate Management

Marie-Claude Guerard

Market and Industry Services

Tom Rosser

Human Resources

Andrew Goldstein

International Affairs

Kathleen Donohue

Office of Audit and Evaluation

Kimberly Saunders

Legal Services

Kristine Allen

The broader agriculture portfolio

Portfolio organizations and leadership

Canadian Dairy Commission

Canadian Grain Commission

Farm Products Council of Canada

Farm Credit Canada

Canadian Agricultural Review Tribunal

Legislative authorities and shared jurisdiction

AAFC's response to COVID-19

Challenges

New actions

Looking ahead: key departmental priorities

Next Policy Framework

Environment and Climate Change

Drought response and recovery

Labour

Canada's food systems

Business Risk Management

African Swine Fever

Compensation for supply managed sectors

Market access and diversification

Enhancing diversity and inclusion

Agriculture and Agri-Food Canada: Department

AAFC research and development centres and regional offices

Domestic and international markets

Science and innovation

Sector risk

Portfolio partners

Improving food systems through the Food Policy For Canada

The Canadian agriculture and agri-food system

Current state and future potential

Key players in this system

It is part of a broader supply chain, which includes:

Primary agriculture

Contribution of primary agriculture to provincial gross domestic product (GDP), 2020

Food and beverage processing

Wholesalers, food retail and foodservice

Wholesale is divided into farm products and food, beverage and tobacco products

The Canadian food retail sector is concentrated

Most Canadian producers have seen solid growth over the past decade

Overall, the system felt the impacts of the COVID-19 pandemic…

But still ensured Canadians had reliable access to food.

Drought conditions had devastating impacts for western producers this summer

Continued growth will require overcoming challenges and seizing opportunities

Challenges include:

Opportunities include:

Canada remains a competitive global force – strong and growing

Positioning the system for sustainable economic growth

The agriculture and agri-food system holds great promise and potential

A closer look at Canadian farms

Canadian agriculture is a growing and prosperous sector