Book 3 — Key policies, programs and issues in the agriculture and agri-food sector: Minister's transition book 2025, AAFC

The Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a 3.5-billion investment, including:

• $1 billion in federal programs and activities
• $2.5 billion in cost-shared programs and activities funded by federal, provincial and territorial (FPT) governments, 60:40 (federal/PT)

Federal-only programs ($1 billion over 5 years)

Science, research and innovation

• AgriScience^{Note 1} ($325 million over 5 years) – Supports leading-edge innovation and applied science. The program has 2 components:
  • AgriScience Projects (support to short-term projects)
  • AgriScience Clusters (partnerships to address priorities that are national in scope)
• AgriInnovate^{Note 1} ($77.7 million over 5 years) – Supports the commercialization, adoption and/or demonstration of commercial-ready innovative agri-based technologies and processes.

Market development and trade

• AgriMarketing^{Note 1} ($129.97 million over 5 years) – Helps industry grow and diversify exports to international markets and seize domestic market opportunities.

Resiliency and public trust

• AgriAssurance^{Note 1} ($64.05 million over 5 years) – Supports industry to develop and adopt systems, standards and tools related to the health and safety of Canadian agri-food products, and how they are produced.

Building sector capacity, growth and competitiveness

• AgriCompetitiveness^{Note 1} ($25.7 million over 5 years) – Assists industry to build capacity and enhance sector development through information-sharing activities.
• AgriDiversity^{Note 1} ($5 million over 5 years) – Helps underrepresented and marginalized groups participate in the sector.

FPT cost-shared programs ($2.5 billion over 5 years)

Programs and services designed and delivered by provinces and territories are tailored to meet region-specific needs. Costs are shared 60% ($1.5 billion) by the federal government and 40% ($1 billion) by provincial/territorial governments.

• Strategic Initiatives ($2.25 billion over 5 years) – Programs are developed to meet Sustainable CAP priorities across science, research and innovation; climate change and environment; building sector capacity, growth and competitiveness; market development and trade; and resiliency and public trust.
• Resilient Agricultural Landscape Program ($250 million over 5 years) – Supports the adoption of on-farm land use and management practices that prioritize climate resilience.
• Regional Collaborative Partnerships Program ($3 million over 5 years) – Supports, enables and encourages provinces and territories to work together in addressing shared challenges and/or priorities, and further encourages regional collaboration based on the 5 priority areas.

Business risk management programs

BRM programs are statutory and funding fluctuates with an annual average of $1.98 billion in payments, from 2018 to 2022. In addition to $3.5 billion under Sustainable CAP, BRM programs provide agricultural producers with protection against income and production losses, helping to manage risks. Cost-shared BRM programs include:

• AgriInvest – Self-managed producer-government savings account designed to help producers manage income declines.
• AgriRecovery Framework – Delivers disaster recovery relief following natural disaster events.
• AgriInsurance – Offers cost-shared insurance against natural hazards to reduce the financial impact of production or asset losses.
• AgriStability – Provides support when producers experience a large margin decline.

There is a suite of AAFC programs outside Sustainable CAP programming to address business, environmental and emerging risks and to drive innovation and growth.

Risk management programs (outside Sustainable CAP programming)

• Advance Payments Program ($3.17 billion in existing loans; ongoing advance program) – Provides easier access to credit through repayable cash advances to support flexible marketing decisions.
• Canadian Agricultural Loans Act Program ($65 million; ongoing loan program) – Provides easier access to credit to establish, improve and develop farms, as well as loans to process, distribute or market the products of farming.
• Price Pooling Program ($47.4 million; ongoing price guarantee program) – Provides a price guarantee that protects marketing agencies and producers against unanticipated declines in the market price of their products.
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Innovation programs

• Canadian Agricultural Strategic Priorities Program ($50.3 million; ongoing program renewed every 5 years) – Supports the sector to seize opportunities, respond to emerging issues, and pilot solutions to adapt and remain competitive.
• Innovative Solutions Canada ($3.9 million; annual program) – Federal projects to support the growth of small and medium-sized enterprise (SME) innovations and solutions to sector challenges. The Challenge Stream ends March 31, 2026.

Food programs

• Local Food Infrastructure Fund ($42.7 million; 3-year program, ends March 31, 2027) – Supports, through the purchase and installation of infrastructure, locally-driven production-focused projects that increase the availability and accessibility of local, nutritious and culturally-appropriate food for equity-deserving groups, particularly Indigenous and Black communities.
• School Food Infrastructure Fund ($20.2 million; 2-year program, ends March 31, 2026) – Supports not-for-profit organizations to improve infrastructure and equipment for school food programming across Canada.

Supply management programs

• Dairy Direct Payment Program ($2.95 billion; 10-year program, ends March 31, 2029) – Payments to help cow's milk producers adapt to market changes resulting from the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Canada-United States-Mexico Agreement (CUSMA).
• Poultry and Egg On-Farm Investment Program ($759 million; 10-year program, ends March 31, 2031) – Helps supply-managed poultry and egg producers adapt to market changes resulting from CPTPP and CUSMA.
• Supply Management Processing Investment Fund^{Note 1} ($397.5 million; 6-year program, ends March 31, 2028) – Helps processors of supply-managed commodities adapt to market changes resulting from the implementation of CETA, CPTPP and CUSMA.
• Market Development Program for Turkey and Chicken ($44 million; 10-year program, ends March 31, 2031) [REDACTED]

Environment programs

• Agricultural Climate Solutions – On-Farm Climate Action Fund^{Note 1} ($670 million + $34.1 million; 7-year program, ends March 31, 2028) – Supports adoption of greenhouse gas reduction practices on-farm. The allocation of $34.1 million announced in Budget 2023 over 3 years, starting in 2023-2024, supports Eastern Canada nitrogen management beneficial management practices.
• Agricultural Clean Technology Program^{Note 1} ($429.4 million; 7-year program, ends March 31, 2028) – Supports research, development and adoption of clean technologies.
• Agricultural Climate Solutions – Living Labs Program^{Note 1} ($185 million; 10-year program, ends March 31, 2031) – Convenes stakeholders to facilitate development and application of on-farm practices with environmental benefits focused on greenhouse gas sequestration and mitigation.
• Agricultural Methane Reduction Challenge (AMRC; $12 million; 4-year program, ends March 31, 2028) – Supports the development and implementation of solutions which reduce enteric methane emissions in cattle.

Other programs

• Wine Sector Support Program ($343 million; 5-year program, ends March 31, 2027) – Provides support to licensed Canadian wineries to adapt to ongoing and emerging challenges.
• Kosher and Halal Investment Program ($25 million; 2-year program, ends March 31, 2027) – Helps federally regulated red meat slaughter establishments adopt technologies and processing equipment to increase the production of kosher and/or halal certified beef and veal.
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• African Swine Fever Industry Preparedness Program ($23.4 million; 3-year program, ends March 31, 2025) – Helps the pork sector prevent and prepare for potential outbreak of African swine fever.
• Producer Mental Wellbeing Initiative ($3 million; 3-year program, ends March 31, 2028) – Supports community-led collaborations and solutions that employ novel strategies to improve mental wellbeing and address stressors contributing to mental health among producers in Canada.
• International Collaboration Program ($1.643 million; annual program) – Supports a range of international memberships and projects aimed at advancing AAFC's science and trade priorities.
• Youth Employment and Skills Program^{Note 1} ($1.2 million; ongoing program) – Funds agricultural work internships for youth and youth facing barriers. Additional funding of $12.3 million per year for 2023-24, 2024-25 and 2025-26.
• Farm Debt Mediation Service (ongoing program) – Offers free financial counselling and mediation services to farmers who are having difficulties meeting their financial obligations.

A vision to 2028

Canada is recognized as a world leader in sustainable agriculture and agri-food production and drives forward to 2028 from a solid foundation of regional strengths and diversity, as well as the strong leadership of the provinces and territories, in order to rise to the climate change challenge, to expand new markets and trade while meeting the expectations of consumers, and to feed Canadians and a growing global population.

The priorities

• Tackling climate change and environmental protection to support greenhouse gas (GHG) emission reductions and the long-term vitality of the sector while positioning producers and processors to seize economic opportunities from evolving consumer demands
• Continued and targeted investments in science, research and innovation to address key challenges and opportunities
• Supporting sustainable agriculture and economic growth by creating the conditions for Canadian businesses to meet evolving challenges of the interconnected domestic and global marketplace
• Building sector capacity and growth through realizing the potential of value-added agri-food and agri-products
• Enhancing resiliency to anticipate, mitigate and respond to risks, including a robust suite of Business Risk Management programs

Guiding principles

• Lead on ensuring a sustainable agriculture and agri-food sector, by addressing climate risks and creating conditions for industry to succeed and compete globally
• Shared jurisdiction of agriculture and international trade obligations are respected
• Collaboration among stakeholders to leverage innovation, regional strengths and diversity
• Programs respond to the realities of producers and participants, and seek to reduce red tape
• In order to maximize shared investments and contribute to collective outcomes, governments will deliver measurable results, while maintaining flexibility in the design, delivery and management of programs across provinces and territories
• Work to address barriers to participation and consider the needs of underrepresented groups such as youth and women, and strengthen relationships with Indigenous Peoples to better support sector participation

Priorities and focus areas for the next policy framework

Advancing sustainable agriculture and agri-food

The next policy framework will reflect the principles of sustainable development allowing the agriculture and agri-food sector to meet the needs of today, and grow for tomorrow, without compromising the needs of future generations.

Building sector capacity, growth and competitiveness

• Support new or emerging primary, value-added and processing opportunities
• Improve productivity through the development and adoption of technology, digitization and artificial intelligence
• Enhance labour attraction and retention, training and automation
• Foster the next generation of farmers, considering economic, training and other barriers to entry
• Pursue economic opportunities through efficiency improvements, reducing and recovering food and other wastes, and growing the bioeconomy

Climate change and environment

• Prepare for and respond to a changing climate by supporting beneficial management practices and accelerating technological adoption
• Reduce GHG emissions, and improve carbon sequestration
• Protect and regenerate soil, water and air quality
• Improve biodiversity and protect sensitive habitats

Science, research and innovation

• Address challenges such as climate change and pursue opportunities such as new markets
• Support research in primary agriculture, agronomy and value-added
• Accelerate the development and adoption of new technologies and finding energy efficiencies
• Supporting pre-commercialization and start-ups in such areas as innovative labour solutions and bioproducts
• Enhance data collection, extension activities, performance measures, knowledge exchange and transfer

Market development and trade

• Collaborate to pursue and defend Canadian trade interests and advance science-based trade rules
• Support market diversification and efforts to remove barriers to interprovincial trade
• Support export readiness and identify and pursue market development opportunities abroad and domestically such as buy local
• Meet domestic and international demand for sustainable primary production and processing practices

Resiliency and public trust

• Build the resiliency of the entire food chain
• Provide BRM programs that are timely, equitable and easy to understand
• Encourage and support proactive risk management, including climate risk
• Protect and enhance plant and animal health and animal welfare, through a "One Health" perspective
• Support the sector to develop, adopt, and enhance assurance systems
• Fostering awareness of sector commitment to the sustainable production of safe, high-quality food and building public trust while increasing sector awareness of the expectations of consumers
• Support and empower producers and agri-food workers to take care of their mental health
• Support worker health and safety

Key points

Since 2003, Canada has had 5-year Agricultural Policy Frameworks that helped coordinate federal, provincial and territorial (FPT) support for the sector.

Launched in April 2023, the Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a 5-year, $3.5-billion FPT investment aimed at fostering sustainability, innovation and economic competitiveness in the agriculture and agri-food sector. It also includes the suite of cost-shared Business Risk Management (BRM) programs.

FPT work on the successor to the Sustainable CAP, the Next Policy Framework (NPF) will start in fall 2025, with the objective of having a new framework in place in April 2028.

Current context

The Sustainable CAP is now entering its third year, and federal and FPT cost-shared programming is fully underway.

Multilateral and bilateral committees, working groups and other FPT forums are working to support the implementation and delivery of cost-shared programming and results reporting on the FPT commitments established through Sustainable CAP.

For the NPF, initial work within AAFC has started on the development of federal considerations, priorities and positions. The internal process will be guided by engagement with the Minister to establish key priorities.

Formal engagement with PTs is to start in fall 2025 and AAFC-led engagement with industry in early 2026. This should lead to the announcement of a policy statement, which outlines the vision, priorities and collective outcomes for the NPF, by FPT Ministers in July 2026. This is the first key milestone to establishing a new framework in 2028.

For the remainder of the Sustainable CAP, there will be a continued focus on enhancing data sharing and results reporting, with significant FPT efforts underway to support these objectives.

Background

Policy frameworks include a suite of demand-driven BRM programs, as well as strategic initiatives — $1 billion in federal-only programs and activities and $2.5 billion in FPT cost-shared programs and activities designed and delivered by PT governments.

• Federal-only programs include AgriScience, AgriInnovate, AgriMarketing, AgriCompetitiveness, AgriDiversity, AgriAssurance and the Regional Collaborative Partnership Program.

The frameworks balance coordinated FPT action to achieve national objectives and flexibility for PTs to tailor their cost-shared programming based on the needs in their jurisdiction.

Framework investments are administered according to multilateral and bilateral agreements negotiated among FPT governments every 5 years.

The Sustainable CAP provides $500 million in new FPT funding compared to the previous Canadian Agricultural Partnership (CAP; 2018 to 2023). This includes $250 million in FPT funding for the Resilient Agricultural Landscapes Program, an ecological goods and services program, based on national principles but tailored to regional needs and delivered by PTs.

Programs and activities under the Sustainable CAP fall under the following 5 priority areas:

• Climate Change and the Environment
• Science, Research and Innovation
• Market Development and Trade
• Building Sector Capacity, Growth and Competitiveness
• Resiliency and Public Trust

The Sustainable CAP builds on earlier frameworks, with greater emphasis on achieving environmental, economic and social objectives by:

• Bolstering climate change and environment action across the framework;
• Updating the suite of BRM programs to be simpler, timelier and more predictable, and exploring options to integrate climate risk and readiness;
• Strengthening the approach to performance measurement and results with shared targets complemented by proportionate spending requirements;
• Enhancing focus on encouraging the participation of underrepresented groups in the sector;
• Continuing enhancements to support science and innovation, market development and trade, and increased emphasis in other focus areas (for example, labour, Indigenous participation, mental health); and
• Reflecting a sustainable development approach and competitiveness throughout the framework.

Renewal of the policy frameworks typically takes 2 to 3 years, which allows the necessary time to negotiate with PTs on the Policy Statement, the multilateral framework agreement, and bilateral agreements with each jurisdiction. It also provides sufficient time for consultations with the sector on the objectives of the framework and program design and implementation.

Key points

Business risk management (BRM) programs, many of which are cost-shared between federal, provincial and territorial (FPT) governments, are the tools that provide agricultural producers with protection against income and production losses, helping them manage risks that threaten the viability of their farms.

BRM programs are longstanding, although they have evolved over time. They are a significant element of government support to the sector, with stakeholders, provinces and territories very engaged.

BRM programs are statutory, demand-based programs. They are negotiated as part of the 5-year agricultural policy frameworks but do not automatically expire at the end of the framework due to their statutory funding.

The BRM program suite is designed to provide an array of complementary solutions for farmers to select the approach that best helps them manage their specific risks. Not all programs are suitable for all conditions, but taken together, the suite is expected to respond to most situations.

Current context

The Sustainable Canadian Agricultural Partnership is currently in its third year and FPT governments are considering possible changes to the suite of programs, whether in the short-term through amendments to existing programs, or as part of the Next Policy Framework FPT negotiations. Related analyses are being conducted and discussions with provinces and territories are ongoing.

Background

Producers have access to a full suite of FPT BRM programs that provide them with protection against income and production losses, helping them manage risks that threaten the viability of their farms, including: a short growing season, extreme weather events, disease and pests, as well as vulnerabilities to market volatilities and trade risks.

AAFC continues to work with provinces and territories to make BRM programs more agile, timely and effective for producers to support greater resiliency within the sector.

BRM programs are well established and positioned to provide support to farmers and help them manage these risks. Most are governed by the Farm Income Protection Act and the FPT Multilateral Framework Agreements (MFAs), which are re-negotiated on a 5-year basis.

The current suite of FPT cost-shared BRM programs are as follows:

• AgriInvest is a producer-government savings account that producers can withdraw from at any time to help address small income declines;
• AgriStability is designed to protect Canadian producers against large income losses related to production, costs and market volatility;
• AgriInsurance reduces the financial impacts of primary production declines caused by natural hazards; and
• AgriRecovery is a framework to develop targeted initiatives that help producers recover from natural disasters such as disease outbreaks, pests and weather-related events by covering extraordinary costs when support beyond core BRM programming is needed.

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Additional federal-only BRM programs include: the Advance Payments Program, which provides cash advances to facilitate marketing flexibilities; and the Canadian Agricultural Loans Act, which provides a loan guarantee program to help establish, improve and develop farms.

A number of changes to BRM programs were introduced under the Sustainable CAP (2023-28) which came into force April 1, 2023. These include:

• Increasing the AgriStability compensation rate from 70% to 80% starting in 2023 and offering a new streamlined AgriStability model that aligns with a producer's income tax filing method (starting in 2025 where AAFC delivers and 2026 where PTs deliver).
• Integrating environmental priorities into BRM through an ongoing BRM Climate Review, the requirement for large farms to have an agri-environmental risk assessment to access AgriInvest starting in 2025, and an AgriInsurance pilot to provide premium rebates for farmers who implement environmental beneficial management practices that also reduce production risk.
• Reviewing past AgriRecovery initiatives to determine if other government programs or private sector tools can be used and/or developed to address the impacts of extreme weather and climate events in the future, thus reducing reliance on AgriRecovery.

Key points

Since 2020-21, business risk management (BRM) program spending has risen considerably, due to the impact of weather-related events (drought, floods, wildfires), program changes, market conditions, as well as increasing farm revenues.

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These spending estimates exclude potential tariff impacts and recently announced changes to AgriStability, as well as any changes to the programs that may be agreed to with provinces and territories as part of the Next Policy Framework negotiations.

Current context

In the 2010s, average annual federal spending on BRM programs was $1.1 billion. [REDACTED]

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Typically, changes to BRM programs are negotiated with provinces and territories as part of five-year agricultural policy frameworks. The Next Policy Framework, which will replace the current Sustainable CAP in April 2028, is expected to be negotiated over the next few years.

AAFC is working, in consultation with the provinces and territories, on a review of BRM programs in a climate change context that should, among other things, provide a better understanding of the impact of climate change on the future trajectory of BRM program spending.

Background

BRM programs are demand-based statutory programs that offer agricultural producers protection against loss of income and production and help them manage risks that threaten the viability of their operations. The suite of BRM programs includes AgriStability, AgriInvest, AgriInsurance, AgriRecovery and the Advance Payments Program (APP).

BRM programs, with the exception of the APP, are cost-shared 60:40 with provinces and territories such that any changes must be agreed to by them, representing the majority of program participants.

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Key points

The dairy, poultry and egg production sectors operate under a supply management system, which provides a fair price for farmers, stability for processors and high-quality products for consumers. These sectors are significant contributors to Canada's agricultural sector, generating over $15 billion in farm cash receipts in 2024.

Supply management governs the production and marketing of these agricultural products and is composed of the following 3 "pillars":

• Production control: Quotas limit production to align with domestic demand;
• Pricing mechanisms: Prices are set according to production costs, market conditions, and product type; and,
• Controlled imports: imports are managed through volume-limited tariff rate quotas (TRQs), with prohibitive over-quota tariffs.

Supply management also supports over 100,000 direct jobs in all provinces across Canada. Milk, poultry and egg production and processing activities benefit multiple other industries, all of which help support local economies and rural communities.

All dairy-producing countries employ support measures for their dairy sectors (for example, United States (U.S.) margin protection and other financial supports). However, Canada faces scrutiny from some trading partners regarding its supply management system, particularly for dairy, in part, due to the need to control imports to achieve predictable levels of trade.

Supply management is a key issue under the current trade environment with the U.S., and departmental officials are working with Global Affairs Canada on trade analysis in preparation for the upcoming Canada-United States-Mexico Agreement (CUSMA) reviews of the dairy provisions (2025) and the agreement overall (2026).

Current context

Supply management played a significant role during negotiations with the U.S. on CUSMA. At that time (2018), Canada agreed to: provide volume-limited market access for dairy, poultry and egg products; make changes to domestic milk class pricing; and establish a charge on global exports of select dairy products if exports exceed certain thresholds.

Canada has long faced scrutiny of its supply management system, particularly for dairy, from certain trading partners (including the U.S., New Zealand, the European Union, and Australia) who seek greater access to the Canadian market.

Canada's administration of its TRQs for imports has led to recent dispute settlement proceedings under free trade agreements with the U.S. and New Zealand, respectively. Trading partners have also raised concerns on other issues, such as Canada's milk class pricing system, high over-quota tariffs, Canadian dairy exports and government support to the dairy sector.

In the previous Parliament, Private Member's Bill C-282 was introduced to amend the Department of Foreign Affairs, Trade and Development Act, preventing the Minister of Foreign Affairs from making market access commitments on supply-managed goods. A similar bill (C-216) was introduced during the 43rd Parliament in 2019. Bill C-282 passed third reading in the House and was in the Senate at the end of the 44th Parliament.

Background

There were 9,256 dairy producers in Canada in 2024. The vast majority of these farms are located in Quebec (47%) and Ontario (33%). Those in the Western provinces account for 14%, while the Atlantic region accounts for 6%. Canadian dairy farms have relatively small herds compared to trade partners, averaging 105 cows per farm, with most farms having between 50 and 75 milking cows. The dairy industry generated $8.9 billion in farm cash receipts in 2024, representing 9% of Canada's farm cash receipts.

As of 2024, there were 4,872 supply-managed producers in the poultry and egg sector. Of that amount, there are 2,852 chicken producers, 513 turkey producers, 1,270 egg producers, and 237 broiler hatching egg producers across Canada. The majority of these operations are located in Ontario (41%) and Quebec (21%), with 33% in Western provinces and 5% in the Atlantic provinces. The poultry and egg industry generated $6.8 billion in farm cash receipts in 2024, representing 7% of Canada's farm cash receipts.

Provincial marketing boards or agencies set farm gate prices for supply-managed commodities. While retail food prices are not regulated, this usually avoids dramatic price swings. Certain provinces (for example, Quebec, Manitoba, New Brunswick) apply price floors for retail sales of fluid milk.

In order to accurately plan domestic production, supply management relies on predictable imports, which are controlled through volume-limited TRQs. Imports above these volumes are subject to prohibitive tariffs of up to 298.5%.

Supply management is implemented through interconnected federal and provincial legislation and regulations. Provincial marketing boards are responsible for operational decision-making, often within the framework of federal-provincial agreements, and with support from federal Crown corporations (that is, the Canadian Dairy Commission for dairy and the Farm Products Council of Canada for poultry and eggs).

Recent trade agreements — Comprehensive Economic and Trade Agreement (CETA, 2016), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, 2018), and CUSMA (2019) — provided Canada's key trading partners with additional access to the domestic dairy, poultry and egg market, while keeping the supply management system and its pillars intact. In response to these agreements, the Government of Canada is implementing a suite of compensation programs (up to $4.8 billion — see Annex).

Annex: Compensation programs summary

Up to $3.2 billion for dairy producers:

• $250 million for the Dairy Farm Investment Program to help dairy producers improve productivity through upgrades to their equipment
• $2.95 billion for the Dairy Direct Payment Program to support any eligible dairy producer through direct payments based on their milk quota

Up to $803 million for poultry and egg producers:

• $759 million for the Poultry and Egg On-Farm Investment Program to support poultry and egg producers on-farm investments
• $44 million for the Market Development Program for Turkey and Chicken to increase domestic demand and consumption of Canadian turkey and chicken products

Up to $830.5 million for dairy, poultry, and egg processors:

• $100 million for the Dairy Processing Investment Fund to provide funding for investments that will improve productivity and competitiveness to dairy, poultry and egg processors
• Up to $397.5 million for the Supply Management Processing Investment Fund to support investments in dairy, poultry, and egg processing facilities that improve productivity and/or efficiency through the purchase of new automated equipment and technology
• Up to $333 million for the Dairy Innovation and Investment Fund to help dairy processors invest in innovative solutions that facilitate the processing and utilization of all milk components

Key points

Science, research and innovation are fundamental drivers of productivity, growth and competitiveness in the agriculture and agri-food sector, as well as a tool to help the sector build resilience and address challenges related to changing growing conditions and increases in severity and frequency of extreme weather.

AAFC works collaboratively with industry, including producer groups and food processors, academia, other federal departments, provinces, territories and other stakeholders to stimulate science, research and development (R&D), as well as technology development, adoption and commercialization in the sector.

With internal science capacity consisting of over 2,200 staff (of which over 600 are science researchers and professionals), and a national network of 20 R&D centres, AAFC conducts scientific research, develops new knowledge, practices and technologies, and transfers the results to the sector.

Current context

AAFC supports and conducts science and innovation through a suite of programming, across research centres, and through collaborative partnerships with industry, academia and others in the system. Through its Strategic Plan for Science, AAFC aims to advance knowledge and solutions in alignment with evolving sector needs and government priorities, with a focus on 4 key missions:

• Mitigating and adapting to a changing climate
• Increasing the resiliency of agro-ecosystems
• Advancing the circular economy by developing value-added opportunities
• Accelerating the digital transformation of the agriculture and agri-food sector

Canadian private investment in science and innovation is currently low relative to public funding, with some studies suggesting that the ratio of public spending to private spending is up to 9:1 in Canada; whereas in the United States, the ratio is 1:3.

Analysis from Farm Credit Canada suggests that sector productivity growth has been slowing since 2010, and innovative solutions are imperative to rekindle growth.

The agriculture and agri-food sector has evolved and expanded in the past 5 years with the increase in agtech and foodtech companies as well as with new product areas, such as alternative proteins.

Background

AAFC provides important support for the research, development, demonstration, and adoption of clean technology and beneficial management practices, and industry directed research through:

• The Agricultural Climate Solutions Program (ACS) has 2 streams that help to develop, test and implement farming practices to improve sustainability by tackling climate change and addressing other agri-environmental issues (for example, biodiversity, soil health and water quality):
  • The On-Farm Climate Action Fund (OFCAF), $704.1 million (2021-28) provides support to farmers in adopting proven beneficial management practices that store carbon and reduce GHG emissions.
  • Living Labs, $185 million (2021-31), bring together farmers, scientists, and other sector stakeholders to accelerate the co-development and testing of innovative practices and technologies in real-life on-farm environments to reduce greenhouse gas (GHG) emissions and sequester carbon in real-world conditions.
• The Agricultural Clean Technology Program (ACT), which is a $429.4 million (2021-28) initiative aiming to create an enabling environment for the development and adoption of clean technology that will help drive the changes required to achieve a low-carbon economy and promote sustainable growth in the sector. ACT has 2 streams:
  • the Adoption Stream, supporting the purchase and installation of commercially available clean technologies, and
  • the Research and Innovation Stream, supporting pre-market innovation, including research, development, demonstration and commercialization.

    The recently launched Accelerator Component under the Research and Innovation Stream aims to support early-stage start-ups, as well as late-stage demonstration, to accelerate the development of innovative clean technology in the sector.

• The Agricultural Methane Reduction Challenge is a $12 million (2023-28) initiative aiming to advance innovative, low-cost and scalable solutions that contribute to the reduction of methane emissions from cattle.

Through the Sustainable Canadian Agricultural Partnership (Sustainable CAP), AAFC delivers $402.7 million in federal-only program funding for a 5-year period, including:

• AgriScience, a $325 million (2023-28) program to accelerate the pace of innovation by providing funding and support for pre-commercial science activities and research that benefits the agriculture and agri-food sector and Canadians.
• AgriInnovate, a $77.7 million (2023-28) program that provides repayable contributions to incent targeted commercialization, demonstration and/or adoption of commercial-ready innovative technologies and processes that increase agricultural and agri-food sector competitiveness and sustainability benefits.

At the beginning of Sustainable CAP, provinces and territories (PTs) notionally allocated $753 million in cost-shared funding (60:40 F/PT) in support of science and innovation activities to address their respective needs and challenges. Of that amount, approximately $289 million has been invested as of April 2025.

In addition to the above programs, AAFC's science capacity has between 600 and 900 ongoing projects in any given year, roughly two-thirds of which are done collaboratively with external stakeholders, aiming to balance activities across a range of public good and industry specific needs:

• Foundational Science and Research, $178 million: Supports AAFC internal science activities, including long-term and high-risk projects.
• Collaborative Framework (CF): Allows external organizations to access AAFC science expertise and capacity to undertake activities identified and funded by sector stakeholders. Projects are funded using money from external sources. In addition to in-kind resources, external funders invested an average of $23.9 million annually over the last 4 years in CF research projects.

In recent years, other federal departments have increasingly played a key role in providing program support to the sector:

• Innovation, Science and Economic Development Canada's (ISED) Global Innovation Clusters initiative supported Protein Industries Canada (PIC), which is a national innovation Supercluster focused on accelerating the growth of the Canadian plant protein sector by positioning Canada as a global leader in the production of plant-based products and co-products.
  • As of 2023, PIC had supported $461 million in total project value, and is on track to develop, improve, and/or commercialize 633 products, processes and services. PIC has played a key role in helping organizations to navigate the rapidly evolving global market for plant-based products and build Canada's reputation as a global leader.
• ISED's Strategic Innovation Fund (SIF) has provided support for the Canadian Agri-Food Automation and Intelligence Network (CAAIN) ($49.5 million) and the Canadian Food Innovation Network (CFIN) ($30 million). These networks connect and fund technological solutions for the agriculture and agri-food sector.
• The National Research Council of Canada's Industrial Research Assistance Program (IRAP) provides support to innovative small and medium-sized enterprises in the food processing sector, as well as agricultural and food technology (agtech/foodtech) firms with innovative ideas that can advance sector competitiveness.
• The Natural Sciences and Engineering Research Council of Canada-Social Sciences and Humanities Research Council's Sustainable Agriculture Research Initiative (SARI), in which AAFC was a partner in development, provided $98 million of funding to Canadian universities for sustainable agriculture research.

Science and research generate the ideas, knowledge and solutions that the sector needs to increase productivity, gain an edge over its competitors, boost resilience to environmental risks and contribute to overall growth of the Canadian economy.

Agriculture and Agri-Food Canada's Strategic Plan for Science

The Strategic Plan for Science is a vision to strategically guide the department's research and science activities in alignment with evolving sector needs and government priorities, with a focus on 4 key missions:

• Mitigating and adapting to a changing climate
• Increasing the resiliency of agro-ecosystems
• Advancing the circular economy by developing value-added opportunities
• Accelerating the digital transformation of the agriculture and agri-food sector

AAFC's national science and innovation capacity is strong and regionally distributed

• Over 2,200 staff in the Science and Technology Branch, of which over 600 are science researchers and professionals
• 20 research and development centres across Canada
• 29 satellite research locations
• 14 Living Labs with related research sites
• 600 to 900 active research and development projects per year

The department's science capacity and expertise balance a range of activities, which aim to:

• Create a pipeline of foundational knowledge and ideas, along with the development of solutions through applied research and technology development;
• Undertake collaborative research with sector partners to develop solutions that meet their current and emerging needs;
• Maintain critical services that are leveraged to benefit the sector, such as genetic preservation, biological collections, drought forecasting, geomatics and earth observations; and
• Provide science-based advice to inform departmental decision-making for policy and program development and during sector emergencies, such as natural disasters, technical trade disputes, and animal disease outbreaks.

AAFC both funds and performs science via its own science capacity and through various program mechanisms, allowing continuous adjustments to reflect evolving needs and priorities

Sustainable Canadian Agricultural Partnership (Sustainable CAP; 2023-2028)

• Foundational Science and Research, $178 million: Supports AAFC's internal science activities, including long-term and high-risk projects. The Sustainable CAP is the largest single source of non-pay operating funds for the Science and Technology Branch's annual internal call for research proposals — the projects most directly focused on upstream research into sector needs and Government priorities. Other sources of funds for AAFC's internal science activities include core funding (A-base), royalties and the Genomics Research and Development Initiative (GRDI).
• AgriScience Program, $325 million: Aims to accelerate industry-driven pre-commercial science activities and research that benefit the agriculture, agri-food sector and Canadians. Funding may be provided as non-repayable contributions for research activities conducted by industry partners and/or as collaborative research support performed by AAFC scientists.
• AgriInnovate Program, $77.7 million: Supports projects that result in commercialization, demonstration and/or adoption of commercial-ready innovative technologies and processes that produce competitiveness and sustainability benefits.

Other key programs and partnership mechanisms

• Collaborative Framework: Allows external organizations to access AAFC science expertise and capacity to undertake activities identified and funded by sector stakeholders. Projects are funded using money from external sources. In addition to in-kind resources, external funders invested an average of $23.9 million annually over the last 4 years in CF research projects.
• Agricultural Climate Solutions — Living Labs, $185 million (2021 to 2031): Canada-wide collaborative network where scientists and farmers co-develop solutions to tackle a changing climate, part of the $4-billion Natural Climate Solution Fund, a horizontal Government of Canada initiative.
• Indigenous Agricultural Science Partnerships (IASP) Fund, $50,000: Available to AAFC researchers to build and strengthen relationships with First Nations, Inuit and Métis Nation partners and catalyze the co-development of Indigenous Food Systems research.

Partnerships accelerate the development of new, innovative solutions for the sector and get them into the hands of producers and processors more quickly

Over two-thirds of science and research projects are collaborative with external stakeholders, who invest their resources to leverage AAFC's science capacity.

Roughly 180 partners (businesses, producer associations, universities, provincial governments and others) are working together towards made-in-Canada solutions.

AAFC is building stronger relationships with Indigenous Peoples and advancing reconciliation by supporting Indigenous-led research, helping to revitalize Indigenous food systems, and increasing Indigenous representation in AAFC's science community.

How science helps improve sector productivity and efficiency (examples)

In collaboration with external partners, AAFC scientists discovered that feeding cranberry and blueberry by-products from fruit processing to chickens could reduce antibiotic use and could be a long-term solution to antimicrobial resistance. Chickens fed this diet had a healthier gut and immune system, resulting from more beneficial bacteria, lower levels of disease-causing bacteria (such as Salmonella and E. coli), and fewer antimicrobial-resistant genes.

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, support effective and timely producer decisions, and improve food security.

AAFC researchers used artificial intelligence to accurately predict the optimum amount of nitrogen and timing of application to help canola producers boost crop productivity and minimize fertilizer costs, while preventing nitrogen runoff into waterways and reducing greenhouse gas emissions.

Quick facts

Canada ranks ninth in the world for agricultural research investments, but 21st in commercializing innovation.

Approximately 500 AAFC-developed plant varieties are currently grown in Canada and around the world.

Return on investment for Canadian agricultural research ranges from 10 to 1 to 20 to 1, and may be higher in some areas.

Peak impact of foundational research investments may not be seen for over 20 years, but they remain critical for fuelling the pipeline of solutions that will meet the needs of producers in the future.

Key points

In primary agriculture, temporary foreign workers (TFWs) are essential to meeting labour demand during seasonal peaks in Canada as populations have moved from rural to urban areas. There were just over 70,000 TFWs working in primary agriculture in 2023, consistent with the global trend of advanced agricultural economies depending on temporary migration to meet seasonal demand.

Only 12% of farms reported having succession plans in the 2021 Census of Agriculture, and the dynamics of transferring a farm to the next generation are often delicate, both financially and interpersonally, for farm families.

A lack of succession has the practical impact of reducing the domestic workforce as there are fewer farm families. Since 1976, the number of farms in Canada has declined from 340,000 to 190,000, while total production has nearly doubled over the same period, as modern operations are much more efficient.

TFW use has increased steadily in food and beverage manufacturing in recent years, increasing 125% between 2017 and 2023.

Post-pandemic, job vacancy rates have improved in both primary agriculture and food and beverage manufacturing.

Current context

Labour

Labour shortages have been identified as a key challenge facing the agriculture and agri-food sector for years. Job features like seasonality, rural location, low wages and the physical nature of the work make domestic recruitment difficult.

Agricultural employers are the highest volume user of Employment and Social Development Canada's (ESDC) TFW Program, with most TFWs being hired in occupations such as general farm workers, nursery and greenhouse workers, harvesting labourers and food manufacturing labourers.

TFW use has grown steadily. In 2023 there were just over 70,000 TFWs in primary agriculture, an increase of 30% from 2017 when there were 54,000. In food and beverage manufacturing, there were 45,000 TFWs in 2023, an increase of 125% from 2017, when there were 20,000.

In 2024, job vacancy rates in agriculture and agri-food were historically low. The 4.0% vacancy rate for crop production (mostly horticulture) was above the economy average of 3.3%, while rates in all other major agriculture and agri-food industries such as food manufacturing (2.5%) and beverage manufacturing (2.9%) were below the average (see Annex for trendline).

The sector also faces shortages of certain high-skilled positions, such as large animal veterinarians, in addition to the ongoing need to fill seasonal positions. It is necessary to attract Canadians to work in the sector, while recognizing that temporary and permanent immigration are key to addressing domestic labour gaps.

ESDC is consulting on a new agriculture and fish processing stream, which aims to combine existing TFW streams for most primary agriculture and food and seafood processing occupations, while introducing worker mobility and market-based wages.

Canada's 2025-2027 Immigration Levels Plan reduced Permanent Resident (PR) immigration targets and introduced Temporary Resident targets. The reduction in PR targets will decrease the number of potential permanent residents who might work in the sector, particularly in year-round positions (for example, certain meat processing occupations).

Farm consolidation and intergenerational transfer

From 1991 to 2023, Canadian farmland appreciated at more than 5 times the rate of inflation, providing long-term capital gains for many Canadian farmers.

While the total number of farms has decreased more than 30% since the 1990s, the number of large farms has more than doubled.

In 2023, the average farm net worth was nearly 4 times that of the average Canadian family ($3.9 million vs. $1 million), with approximately 80% of the equity coming from farmland.

Based on these historically high farm net worths, many farmers who have sold and exited the industry in recent years have captured significant wealth. Farm sales are subjected to capital gains tax, but in most scenarios, sellers would retain at least two-thirds of the value of the sale after paying taxes and fees.

In contrast, those farmers who wish to pass their operation to their family may perceive the farm's high net worth to be as much a burden as an asset. Transferring the farm to the next generation requires careful financial planning to allow the seller a comfortable retirement income without overburdening the next generation with a heavy debt load.

The rapid increase in farmland value over the last 30 years has also made it much more challenging for new entrants to purchase farmland. If not inheriting land, most new farmers must start small and continue to make off-farm income.

Background

The TFW Program is jointly administered by ESDC and Immigration, Refugees and Citizenship Canada (IRCC). Employers are required to obtain a positive or neutral Labour Market Impact Assessment from ESDC to demonstrate that the employment of a TFW does not have a negative impact on the Canadian labour market. Workers are required to apply for a work permit from IRCC.

Several provisions under the Income Tax Act provide support for intergenerational farm transfers:

• Lifetime Capital Gains exemption (recently increased from $1 million to $1.25 million), which allows an individual selling a qualified property to use their capital gains to reduce their taxable income;
• Rollover provision, which allows an individual to transfer the title of an asset on a tax-deferred basis; and
• Reserve provision, which allows the proceeds from the sale of property to be claimed by the seller over up to 5 years.

There are also federal non-tax measures available to facilitate farm transfers such as

• Loan guarantees for farm transfers and to beginning farmers under the Canadian Agricultural Loans Act Program; and
• Farm Credit Canada free learning programs regarding succession planning, as well as targeted loan products to facilitate farm transitions.

Bill C-208 was introduced in 2021 to provide tax relief to families by allowing the transfer of family farms to children or grandchildren to be treated similarly to sales to unrelated parties.

Annex: Job vacancy rates in agriculture and agri-food

Source: Statistics Canada. Results from the Job Vacancy and Wage Survey are reported quarterly. Annual figures are averages of all quarters from 2024.

Key points

Well-performing domestic supply chains are critically important to ensure Canada's agricultural goods reach both domestic and international markets.

There is a particularly acute reliance on Canada's rail and port systems to allow prairie grain producers to reach critical export markets, given the significant distance to reach export position at port and lack of economically viable alternatives. As a result, rail and port performance are of significant interest to farmers and represent a key element of their competitiveness.

Disruptions, such as work stoppages at railways and ports and extreme weather events can significantly impact the efficiency and fluidity of agricultural supply chains, and represent a major concern for agricultural stakeholders.

Agriculture and Agri-Food Canada (AAFC) works closely with other government departments (for example, Transport Canada, Employment and Social Development Canada) to ensure impacts of supply chain disruptions and challenges on the sector are well understood, consider potential solutions, and ensure information and updates are shared with agriculture stakeholders in a timely way.

Current context

In 2024, a labour dispute involving the country's 2 largest railways, as well as work stoppages at ports in Montreal and British Columbia, led to major disruptions at a time when the demand for transporting some agricultural commodities was at its highest. This compounded existing concerns from agricultural stakeholders about the reliability of Canada's supply chains following protracted labour disruptions at critical British Columbia ports the previous year.

The first 3 months of 2025 have also brought significant challenges in the form of inconsistent and underperforming rail service for grain companies, based in part on operating challenges during severe weather and difficulties maintaining appropriate crew levels. This contributed to increased ship demurrage penalties for grain handlers who were not able to load ships in a timely way until the necessary grain arrived by train, and risked cancelled contracts and lost sales.

With emerging and growing markets in the Indo-Pacific region and recent U.S. trade uncertainties, reliable and effective rail transport and west coast port operations have taken on even greater significance from an economic growth perspective for Canadian agricultural producers.

Stakeholders are likely to continue to raise concerns regarding supply chain reliability, and may seek AAFC's support for actions by Transport Canada, Employment and Social Development Canada and others to:

• support a more competitive environment for freight rail service, and create a more even playing field between grain companies and railways;
• address labour unpredictability, following significant disruptions to supply chains based due to strikes; and
• increase investment and timely regulatory decision-making for key supply chain projects (for example, continued progress on the Roberts Bank 2 container facility on the West Coast, quicker decisions on similar projects in future).

Background

Supply chain visibility

Canadian agriculture is heavily dependent on export markets, given that our agricultural production greatly exceeds what can be consumed domestically. Over half of the value of Canadian agricultural production is exported, and wheat and canola alone account for almost 25% of our exports.

Over 70% of all western Canadian grain production is destined for export, of which well over 90% is moved by rail to export position at port (71% to the Port of Vancouver, 17% to Thunder Bay, and 5.3% to Prince Rupert).

Trucking is used for shorter distances to, for example, a grain elevator or connecting shortline railway, as well as for the cross-border transport of pork, beef and other commodities, such as poultry, dairy and horticultural products.

Recognizing the critical importance of well-functioning supply chains to the competitiveness of the Canadian grain sector, AAFC and Transport Canada jointly fund Canada's Grain Monitoring Program, delivered by Quorum Corporation. Since 2001, the Grain Monitoring Program has provided ongoing performance monitoring of the grain handling system in Western Canada, offering critical visibility, trusted data and reporting to grain stakeholders along the supply chain. AAFC also supports, in partnership with various agriculture associations, the Ag Transport Coalition, which provides publicly accessible information on railway performance.

Livestock and non-grain commodities (such as vegetables) are largely moved through their supply chains via truck. Due to the nature of moving animals and perishable meat, truck is the preferred (and largely only) transportation mode used to move these commodities across Canada to their point of export.

Nearly 70% of Canada's pork and hog production is exported while 56% of Canada's beef and cattle production is exported.

Stakeholder perspectives

Grain sector stakeholders have been supportive of efforts to encourage more competition in rail service. This includes support for a Transport Canada pilot project (which ended in March 2025) that extended rail interswitching limits in the prairie provinces to allow shippers who would otherwise be "captive" to a single national railway serving their location to access competitive rail service. Agricultural stakeholders are strongly supportive of interswitching and wish to see it made permanent, although railways are strongly opposed.

As a complement to overall desire for greater predictability and efficiency in supply chains, stakeholders may also raise a desire to see modernization of the Canada Grain Act, which provides the legislative framework for the functions and operations of the Canadian Grain Commission, including regulating Canada's grain handling system, to address longstanding concerns that the act does not align with the needs and opportunities of the modern grain sector.

Key points

Agriculture is one of the sectors most affected by climate change. With increasing climate events, producers are relying on Business Risk Management (BRM) programs for recovery support.

Agricultural production is dependent on healthy soils, access to clean water and biodiversity (through various services like pollination) to maintain strong yields. Agricultural ecosystems can generate vital services such as water retention and filtration, habitat for wildlife, and climate regulation through carbon storage in soils.

The adoption of sustainable practices and technologies that improve resilience and efficiency can help producers to withstand and recover from climate events and improve profitability.

Current context

The frequency and severity of climate-related events — floods, droughts, extreme heat, wildfires, hurricanes — are becoming more costly and unpredictable, putting pressure on costs, yields, profits and producer livelihoods.

Producers rely on BRM programming to protect against income and production losses from climate-related events. However, this programming does not help them proactively plan for future events. [REDACTED]

Since 2021, $1.5 billion in federal investments have been allocated towards sustainable agriculture, with an emphasis on climate change mitigation, including: Agricultural Climate Solutions (ACS): On-Farm Climate Action Fund, ACS Living Labs, Agricultural Clean Technology Program, the Agricultural Methane Reduction Challenge, and Resilient Agricultural Landscape Program (a component of the Sustainable Canadian Agricultural Partnership [Sustainable CAP]).

Within the current $3.5 billion, 5-year Sustainable CAP, a notional $616 million in cost-shared funding has been allocated to support Climate Change and Environment activities.

While producers have acted over the last 20 years to make notable improvements in environmental stewardship, including reducing on-farm greenhouse gas emissions (for example, through the adoption of no-till and precision agriculture technologies), there are still ongoing concerns about the lack of financial recognition for these efforts.

Producer and non-governmental organizations continue to cite the need for more direct incentives, enhanced extension capacity, data, tools and research into new solutions for farmers to implement practices that are well-suited to their operations.

The adoption of sustainable farming practices, technologies and tools that improve on-farm resilience and sustainability can contribute to long-term profitability. Many of these practices (for example, cover cropping, windbreaks, input use efficiency) have both economic and environmental benefits that can position Canadian farmers for long-term success and resilience in an uncertain climate, economy and trade environment.

Background

AAFC engaged significantly with the agriculture sector on the development of a federal strategy on sustainability. Stakeholders appreciated being engaged and, through discussions, emphasized the importance of applying an economic lens, the need to recognize regional differences, the significance of acknowledging early adopters, and issues with agri-environmental data.

The Strategic Plan for Science guides AAFC's research activities through a mission-driven approach in 4 priority areas, including mitigating and adapting to climate change and increasing the resiliency of agro-ecosystems.

Environment and Climate Change Canada (ECCC) is developing several carbon offset protocols for the sector, in collaboration with AAFC, to provide an incentive to producers to reduce emissions and generate a potential diversified income stream.

ECCC, the Canada Water Agency (CWA), Natural Resources Canada (NRCan) and other federal entities lead on several files that support positive environmental outcomes in the agriculture sector while contributing to national and international environment and climate commitments, including:

• Emissions Reduction Plan (ECCC)
• Canada's Methane Strategy (ECCC)
• National Adaptation Strategy (ECCC)
• 2030 Nature Strategy (ECCC)
• Species at Risk (ECCC)
• Freshwater Action Plan (CWA)
• Bioenergy Strategy (NRCan — in development)

Key points

Canada's agriculture and agri-food regulations ensure Canadians have access to safe, high-quality food, both domestic and imported, while maintaining Canada's international reputation as a worldclass producer.

Canada's regulatory environment influences how domestic firms are able to expand and compete, while also influencing companies' decisions to do business in Canada and support the Canadian sector through trade. Regulations also support animal welfare, fair competition and economic stability, and consumer confidence. This enables Canada to maintain a strong export market via international trade agreements, contributing a significant portion of GDP.

There is significant interest in examining the suite of regulations impacting the sector for their relevance in supporting innovation and regulatory agility. Given that many of the regulatory modernization opportunities raised by the sector fall under the mandate of other departments, regular and ongoing engagement with federal partners is key.

Current context

The agriculture and agri-food regulatory landscape has become more complex over time, with increases in volume, complexity and inter-operability challenges across jurisdictions. This growth of cumulative regulatory burden is seen by the sector as an impediment to sector growth.

Current regulatory issues that stakeholders have highlighted include: administrative burden and regulatory complexity, length of approval time, lack of Canada-wide alignment of regulatory development and management, and unclear guidelines affecting consistency of regulatory interpretation and inspection.

AAFC continues to prioritize regulatory innovation and agility by jointly engaging industry and regulators through its Agile Regulations Table (ART) to determine priorities, pursue regulatory experimentation opportunities and work with regulators and stakeholders to advance the regulatory modernization agenda.

Background

AAFC and the Portfolio are responsible for over a dozen acts which enable more than 200 regulatory instruments. AAFC regulatory instruments enable the creation of programming and services, which assist producers in managing business risks, support marketing of agricultural products, and facilitate competitiveness and trade.

The sector is highly regulated, with Canadian Food Inspection Agency (CFIA) and Health Canada being the most prevalent regulators in areas including food and feed safety, animal health, plant health, novel foods, labelling and Canadians' health. AAFC works closely with regulatory partners on regulatory development and modernization, including efforts to ensure the perspectives and realities of the agriculture and agri-food sector are well understood.

Current regulatory modernization efforts stem from Treasury Board Secretariat (TBS) federal regulatory policies to reduce red tape and support innovation, as well as government-industry priorities brought forward through the ART with a focus on supporting innovation and economic growth in the agri-food and aquaculture sectors. Canada's regulatory environment influences how domestic firms are able to expand and compete, while also influencing companies' decisions to do business in Canada and support the Canadian sector through trade.

AAFC supports regulatory modernization in the following areas:

• ART: Launched in 2020, the ART brings the sector and government together to collaboratively improve and modernize Canada's agricultural regulatory system. Recent work includes seeking input from the sector on recommendations related to cumulative regulatory burden.
• Innovative approaches: AAFC and partners are pursuing innovative approaches to help address regulatory issues, including regulatory experimentation and journey mapping to help regulators test new processes.
• Canada Grain Act modernization: Extensive consultations were undertaken and a "What We Heard" report was released in 2021. No amendments to the Canada Grain Act were made and stakeholders are likely to continue raising concerns, AAFC is analyzing stakeholder input to determine a path forward.
• Collaboration with other regulators: AAFC continues to work closely with regulatory partners on regulatory modernization opportunities which fall outside of AAFC's authority to advance the interests of the agriculture and agri-food sector, including:
  • Work with the CFIA and FPT partners to improve internal trade. Three pilot projects have been established to address barriers to meat trade and increase market access for provincially-licensed meat plants;
  • Labelling requirements including HC's front-of-pack labelling and marketing to kids restrictions, CFIA's "Food Product Innovation" initiative, and Environment and Climate Change Canada's proposed regulations intended to address Canada's zero plastic waste agenda;
  • HC and CFIA's next stages on modernizing compositional standards and other elements, now that the comprehensive "Part B Regulatory Modernization" has established a more agile framework;
  • Partnering with the Pest Management Centre and Health Canada's Pest Management Regulatory Agency (PMRA) on an experiment to determine equivalency in residue from chemical application by drones to traditional applications; and
  • Initiating experiments with CFIA to improve the process to develop novel feed guidance and to streamline regulatory pathways for novel fertilizers.
• Evaluating AAFC and Portfolio legislative and regulatory suites, such as:
  • A proposal to modernize the Agricultural Products Marketing Act under the Annual Regulatory Modernization Bill (formerly Bill S-6, An Act respecting regulatory modernization) and supporting TBS' advancement of regulatory sandbox authorities.
  • Analyzing opportunities to modernize and improve the agility of AAFC's legislative and regulatory stock to reduce burden and benefit industry and Canadians (for example, actioning Agricultural Marketing Programs Act review and Canadian Agricultural Loans Act evaluation).
  • Determining next steps for the Canadian Pari-Mutual Agency regulatory amendments to modernize cost recovery.

Key points

Pesticides are essential tools for the agriculture sector. They support Canadian growers by protecting their high yields from diseases and pests. Pesticides also enable no-till farming, allowing for enhanced carbon sequestration in croplands.

Farmers work diligently to ensure good stewardship practices around the use of pesticides.

AAFC recognizes the importance of crop protection products and is actively working with provinces and territories to help farmers overcome the challenges associated with pest control.

Varied, sustainable and effective pest control tools are critical to Canada's agriculture sector and Canadian food security.

Current context

Health Canada's Pest Management Regulatory Agency (PMRA) is Canada's federal pesticide regulator.

A number of PMRA decisions have been negatively received by the agricultural sector and provincial and territorial partners. This includes PMRA's proposed fee increase to pesticide manufacturers and its transformation agenda. Farmers remain concerned that recent PMRA initiatives may further limit their access to varied and innovative pest control products.

Potential impact of U.S. policy changes

Agriculture stakeholders have recently written the Ministers of Health and Agriculture and Agri-Food to request that the PMRA temporarily halt its activities related to its transformation and proposed fee increase. These requests stem from concerns that United States' (U.S.) tariff threats may further discourage Canadian investments in innovative pest control products, which could potentially impact the agricultural sector's overall competitiveness.

On March 21, 2025, PMRA informed stakeholders that it was delaying the implementation of its proposed fee increase citing current U.S.-related economic uncertainties as a justification.

Canada is not an important manufacturer of pesticides and relies significantly on imports from the U.S. Consequently, any potential Canadian counter-tariff measures on American pesticides could create inflationary pressures on this farm input.

Background

AAFC supports science-based decision-making around pesticides and recognizes their importance for the sector and for food security. AAFC does not have a regulatory role when it comes to pesticides, but stakeholders often engage AAFC to help ensure that federal departments and agencies fully consider the impacts on the sector of decisions that could affect the availability of pesticides.

Since the launch of PMRA's transformation agenda in 2021, the agriculture sector remains concerned that proposed increased oversight on pesticides could lead to losing more essential crop protection products.

In December 2022, Canada agreed to the Kunming-Montreal Global Biodiversity Framework and its 23 targets to safeguard biodiversity. Agriculture stakeholders have expressed concern that Target 7, which focuses on reducing risks from pollution, including from pesticides, could shift to focusing on reducing pesticide use.

In July 2023, in response to a negatively received PMRA decision to limit uses for Lambda, a broad-spectrum insecticide, Agriculture Ministers agreed to create a federal, provincial and territorial (FPT) working group, to explore the challenges of pesticide management.

The FPT working group presented the report and recommendations to FPT Ministers of Agriculture in February 2024, which received unanimous support. In July 2024, Ministers endorsed the Action Plan to address the recommendations by the FPT Working Group on Pesticide Management. They also requested that the Working Group provide regular progress reports to FPT Ministers.

Pesticide regulation

In Canada, all pesticides must be registered prior to manufacture, import, sale or use. Pre-market evaluations are carried out by PMRA, who also conduct post-market re-evaluations every 15 years.

Currently, as part of PMRA's transformation, the trigger for pesticide re-evaluation is under review as PMRA is implementing its Continuous Oversight Policy.

In December 2024, PMRA published its proposed increases to fees it charges to pesticide manufacturers for re-evaluation activities in Canada Gazette I.

The Canadian Food Inspection Agency monitors domestic and imported food commodities for pesticide residues to ensure their safety.

AAFC's role in pesticides and pest management

AAFC conducts research and development of alternative pest management solutions and supports sector adoption of novel pest control technologies, such as the future use of drones for the application of pesticides.

AAFC facilitates the alignment of Maximum Residue Limits (also known as MRLs) internationally to support Canadian agriculture and agri-food exports.

In order to help growers of smaller-acreage crops (that is, minor uses) gain access to more pest control products, AAFC's Pest Management Centre helps to generate data to support pesticide submissions to PMRA.

Key points

Plant breeding innovations allow new plant varieties to be developed more effectively and efficiently than through conventional breeding. This can benefit farmers and consumers with plants that are more resistant to extreme temperatures, precipitation and insects.

Gene editing techniques can provide a more targeted and efficient way to create plants that are as safe for humans, animals and the environment as conventionally bred plants.

AAFC encourages and oversees mechanisms that support transparency in plant development, which is important for the organic industry, producer certifications and markets.

Current context

The AAFC-led Government-Industry Steering Committee on Plant Breeding Innovation Transparency is developing a plan to launch a transparency survey in 2025, which will help gather critical insights to support transparency initiatives.

The Committee is also in the process of reviewing Seeds Canada's Canadian Variety Transparency Database to enhance the usability and overall transparency of seeds.

To ensure seed developers and companies are voluntarily disclosing information about commercially available gene-edited varieties in the marketplace, a draft audit framework has been developed in preparation of a future third party compliance audit (that is, once a gene-edited variety is available for commercial sale) of Seeds Canada's Canadian Variety Transparency Database.

AAFC, the Canadian Food Inspection Agency (CFIA), and Health Canada are actively monitoring the use of gene editing techniques in the development of new plant products, while emphasizing the importance of comprehensive participation in non-regulatory transparency mechanisms, which include Health Canada's Transparency Initiative, CFIA's list of non-novel products for environmental release and Seeds Canada's Canadian Variety Transparency Database.

The first gene-edited non-novel seed varieties are not expected to be commercially available in the Canadian market until late 2025 or 2026 at the earliest.

Background

The AAFC-led Government-Industry Steering Committee on Plant Breeding Innovation Transparency was launched in June 2023. The Steering Committee meets regularly to advance key measures related to variety development transparency, including the development of an audit framework, conducting annual surveys, enhancing the oversight and data of the industry-led Canadian Variety Transparency Database.

The Steering Committee has previously overseen the publishing of an AAFC plant breeding innovation transparency web page and the launch of a generic email address to address public enquiries.

In Canada, all novel products are subject to a pre-market assessment by Health Canada and CFIA.

CFIA and Health Canada have published updated guidance respectively for novel seed (2023), feed (2024) and food (2022). These guidance pieces clarify that most gene-edited products are considered non-novel (except for plants with herbicide tolerance traits) and do not require pre-market safety assessments. This guidance is based on the scientific evidence that gene editing techniques pose no unique safety concerns compared to conventional breeding methods.

The updated guidance will encourage Canada's competitiveness in crop innovation and put more innovative crop varieties into the hands of farmers to contend with climate challenges, mounting pest pressures and an evolving marketplace.

Organic and anti-genetically modified organism (GMO) advocates have been critical of this guidance.

In May 2023, an Industry-Government Technical Committee on Plant Breeding Innovation Transparency developed and released its Chair's Report to help support transparency in meeting market requirements, including the integrity of organic certifications, which allow the use of untreated conventional seed but not gene-edited seed.

The Chair's Report outlined several key recommendations to improve transparency around seed varieties.

Related initiatives

• Seed guidance: Directive 2009-09: Plants with novel traits regulated under Part V of the Seeds Regulations: Guidelines for determining when to notify the CFIA.
• Feed guidance: Appendix III: Guidance on how to determine when a plant-derived ingredient requires a feed pre-market evaluation.
• Food guidance: Health Canada has updated guidance surrounding regulation of products for food purposes, including those derived Plant Breeding Innovation, including gene editing.