Book 3 — Sector overview and key file backgrounders: minister's transition book 2025, AAFC

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Canadian agriculture and agri-food system

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

Key players in this system include:

Producers/primary agriculture
Processors
Food retailers and wholesalers
Foodservice providers

In 2023, the year with the most recent available data, gross domestic product (GDP) and employment for key players in the agriculture and agri-food system were broken down as follows:

	GDP ($ billions)	Percentage of total GDP (%)	Employment
Primary agriculture	31.7	1.4	247,200
Food and beverage processing	35.2	1.6	322,600
Food retail and wholesale	36.9	1.7	659,800
Foodservice	30.5	1.4	971,100
Total	134.3	6.1	2,200,700

These players are part of a broader supply chain, which includes:

Input and service suppliers
Transportation providers
Consumers, at home and abroad

Primary agriculture

Canada has over 62 million hectares (154 million acres) of agricultural land concentrated primarily across the Prairies, Quebec and Southern Ontario.

Between 2019 and 2023, the 3 prairie provinces accounted for an average of 55.3% of total cash receipts, including 60.8% of crop receipts and 44.5% livestock receipts.

Some provinces are more diversified than others. Primary agriculture's contribution to provincial GDP varies across Canada.

Description of this image follow — **Top 10 commodities by average farm cash receipts (2019 to 2023)**

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Canola: $11.7 billion
Cattle and calves: $11.2 billion
Wheat (including durum): $9.6 billion
Milk: $7.7 billion
Hogs: $5.6 billion
Vegetables (greenhouse and field): $4.1 billion
Soybeans: $3.5 billion
Chickens (for meat): $3.4 billion
Corn: $3.0 billion
Cannabis: $2.5 billion

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British Columbia: 1.0%
Alberta: 1.7%
Saskatchewan: 7.7%
Manitoba: 4.5%
Ontario: 0.9%
Quebec: 1.1%
New Brunswick: 1.7%
Nova Scotia: 0.8%
Prince Edward Island: 3.3%
Newfoundland and Labrador: 0.2%

Most Canadian producers have seen solid growth over the past decade

Farm market receipts grew 5.8% annually (between 2013 and 2023) and reached a record high of $93.0 billion in 2023.

The largest value growth came from grains and oilseeds, which at $36.2 billion accounted for 39% of total farm market receipts in 2023.

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Grains and oilseeds, $36.2 billion
Pulses and special crops, $3.8 billion
Cattle and calves, $15.0 billion
Dairy, $8.6 billion
Horticulture, $8.6 billion
Poultry and eggs, $6.4 billion
Hogs, $5.9 billion
Cannabis, $2.9 billion
Other, $5.6 billion

For primary agriculture, despite the challenges of COVID-19, rising input prices and climate variability such as drought conditions in the West, net cash income (NCI) has increased since 2018, reaching $24.9 billion in 2023, as growth in receipts has generally exceeded that of expenses.

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The data indicate a general upward trend from $6.9 billion in 2004 to $23.98 billion in 2023.

Net cash income, 2004 to 2023
Years	Net cash income ('000)
2004	6,930,768
2005	6,822,662
2006	5,867,641
2007	7,109,159
2008	8,931,673
2009	8,480,592
2010	9,030,642
2011	11,486,858
2012	12,544,910
2013	12,536,980
2014	13,778,244
2015	14,090,636
2016	14,178,692
2017	14,153,519
2018	11,699,824
2019	11,823,769
2020	15,806,309
2021	21,829,291
2022	22,071,718
2023	23,978,455

Food and beverage processing

The food and beverage processing sector is the largest manufacturing sector in Canada in terms of both GDP and employment. Over 8,600 food processing and beverage businesses provide direct jobs for over 322,600 Canadians, employing more Canadians than the entire transportation equipment manufacturing sector.

The processing sector uses 42% of Canada's primary production and supplies 75% of all processed food and beverage products in Canada.

In 2023, 95% of food and beverage processing establishments were small operations (0 to 99 employees) with little variation across sub-industries. Processing plants are located across the country but primarily located in Ontario, Quebec and British Columbia.

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One line shows food, beverage and tobacco processing sales starting at $95.3 billion in 2012 and ending at $175.2 billion in 2023. A second section shows food, beverage and tobacco processing exports starting at $24.3 billion in 2012 and ending at $56.4 billion in 2023.

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Sub-industry	Distribution (%)
Meat	25.5
Grain and oilseed milling	12.7
Dairy	10.9
Other food	10.7
Bakeries and tortilla	10.6
Beverage	9.4
Animal food	6.6
Fruit, vegetable and specialty	6.5
Seafood product preparation and packaging	3.6
Sugar and confectionery processing	3.4

Wholesalers, food retail and foodservice

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

In 2023, sales of farm products at wholesale reached over $37 billion, while food, beverage and tobacco products at wholesale dropped slightly to $127 billion in sales, a year-over-year decrease of 1%.

The Canadian food retail sector is highly concentrated

Large chains dominate in each region of Canada.
The top 3 traditional food retailers (Loblaws, Sobeys and Metro) and the top 2 general merchandise retailers (Walmart and Costco) accounted for about 74% of total grocery sales in 2021.
Independents (for example, co-operatives and single stores) are most common in Western Canada and Ontario but are still outnumbered by the large chains.
Smaller retailers tend to serve remote and northern communities (for example, co-ops).

Foodservice sales have been impacted by COVID-19 in recent years

In 2023, total foodservice sales reached $93 billion, up $10 billion from 2022, returning the sector to the long-term growth trends prior to the COVID-19 pandemic.
Limited-service or quick-serve (for example, take-out) eating places, represented $42 billion in sales, up 11% from 2022. Limited-service sales were least affected by the pandemic and recovered fastest.
Sales at full-service restaurants ($40 billion) and special food services ($7 billion), which includes caterers and mobile food services, were up 12% and 21%, respectively, from 2022.

Distribution of foodservice sales by industry, 2023
Industry	Distribution (%)
Full-service	44
Limited-service	46
Special food services	8
Drinking places	3
Source: Statistics Canada, Table 21-10-0019-01

Food price inflation outpaced overall inflation in 2023

The Consumer Price Index (CPI) rose 3.9% on an annual average basis in 2023, following gains of 6.8% in 2022 and of 3.4% in 2021. The increase in 2022 was a 40-year high, the largest increase since 1982 (+10.9%).

The cost of food purchased from stores (groceries) increased 22% between 2021 and 2023. In 2022, grocery prices rose at the fastest pace (9.8%) since 1981 (+12.0%).

Canada wide grocery price increases are slowing, increasing slower than headline inflation in April for the third month in a row. Grocery prices increased 1.4% and economy wide prices increased 2.7% respectively between April 2023 and April 2024, compared to 1.9% and 2.9% increase in March 2024.

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Year-over-year prices for food from stores increased 7.5% from 2022 to 2023. The graph above shows year-over-year food price inflation peaks in 1974 (+15.6%), 1978 (+17.4%), 1981 (+12%), and 2022 (+9.8%). Food price inflation outpaced overall inflation in 2023.

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Year-over-year prices for major food categories show variation, ranging from a 17% increase for edible fats and oils to a 6% increase for fresh fruit between 2022 and 2023. Other notable increases from 2022 to 2023 include preserved fruit and fruit preparations (+12%), bakery products (+11%), and cereal products (+10%).

Category	Average year-over-year percentage change 2000 to 2019 (pre-COVID)	2021 (%)	2022 (%)	2023 (%)
Edible fats and oils	2	10	25	17
Condiments, spices and vinegars	1	5	15	9
Cereal products	2	0	14	10
Coffee and tea	1	1	12	7
Bakery products	3	1	11	11
Eggs	3	6	11	7
Fresh fruit	2	3	10	6
Dairy products	2	3	9	7
Fresh vegetables	3	-3	8	8
Preserved vegetables and vegetable preparations	2	1	12	12
Fresh or frozen poultry	3	6	7	9
Food purchased from stores	2	2	10	8

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
strong stewards of the land

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

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:
- 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.
Over $1.5 billion in recent funding to environmental and climate change programming will boost Canada's capacity for sustainable production.
- Agricultural Climate Solutions, Agricultural Clean Technology, the Resilient Agricultural Landscapes Program and cost-shared agri-environmental programming.

Canada remains a competitive global force — strong and growing

From 2013 to 2023, exports of Canadian agriculture, agri-food and seafood products increased by 97.0%, reaching a record high of $99 billion in 2023.

In 2023, Canada was ranked the eighth-largest exporter of agriculture, agri-food and seafood products in the world, after the U.S., Brazil, the Netherlands, Germany, China, France and Spain.

Exports of agricultural and agri-food commodities are projected to drop slightly over the short term as commodity prices are expected to decline from their current historical peaks. But steady growth is expected to resume over the medium term.

The total value of agriculture and agri-food exports, including fish and seafood, is projected to reach $117 billion by 2033.

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Fish and seafood exports were $9.6 billion in 2023 and are projected to be $12.0 billion by 2033.
Dried pulses and animal feed exports were $6.3 billion in 2023 and are projected to be $8.1 billion by 2033.
Grains and grain product exports were $24.9 billion in 2023 and are projected to be $26.3 billion by 2033.
Oilseeds and oilseed product exports were $21.2 billion in 2023 and are projected to be $24.7 billion by 2033.
Livestock and red meat exports were $13.6 billion in 2023 and are projected to be $15.6 billion by 2033.
Other exports were $25.4 billion in 2023 and are projected to be $32.4 billion by 2033.

Snapshot of the sector
- Agriculture and agri-food is a major contributor to the Canadian economy.
- Agriculture and Agri-Food Canada (AAFC) is mandated to support primary agriculture and food and beverage processing, but the sector reaches into the broader agri-food system, which influences other service sectors across the food supply-chain.
The agriculture and agri-food system
(Data are from 2023)
Primary agriculture
- Gross domestic product (GDP): $31.7 billion (1.4%)
- Employment: 247,200
Food and beverage processing
- GDP: $35.2 billion (1.6%)
- Employment: 322,600
Food retail and wholesale
- GDP: $36.9 billion (1.7%)
- Employment: 659,800
Foodservice
- GDP: $30.5 billion (1.4%)
- Employment: 971,100
Inputs and service suppliers
- GDP: $15.7 billion (0.7%)
- Employment: 93,700
In 2023, the primary agriculture and food and beverage processing sectors
- Employed 569,800 people
- Accounted for 3.0% of Canada's GDP
- Provided 1 in 35 jobs in Canada
Primary agriculture
An economic driver that is highly diversified across the country
- 189,874 farms
- Farms cover 62.2 million hectares or 6.3% 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 (billion $)
- A record high of $93.0 billion in 2023
- 5.8% average annual growth rate from 2013-2023
- Largest 10% of farms generate over two-thirds of all revenues
Food and beverage processing
Largest manufacturing industry in Canada
- 16.5% of all manufacturing GDP
- 17.8% of manufacturing employment (agri-food)
- Facilities across the country, but most are in Ontario and Quebec
- Food and beverage processing sales totalled $166.6 billion in 2023
Main industries
- Meat product manufacturing: (25.6%) $42.7 billion
- Dairy product manufacturing: (10.9%) $18.2 billion
- Grain and oilseed milling: (12.8%) $21.3 billion
- Bakeries and tortilla processing: (10.7%) $17.8 billion
(Typically AAFC reports on food and beverage processing sales together; however, beverage processing data are excluded due to Statistics Canada confidentiality provisions.)
Snapshot of sector commodity breakdown
Crop production
- 2023 Gross domestic product (GDP): $24.5 billion
- Employment: 114,800
Principal field crops
(wheat, canola, soybean, barley, oats, peas, lentils, corn, etc.)
- Farm market receipts: $40.0 billion
- Number of reporting farms: 65,135 (2021 data; do not capture other miscellaneous farms.)
- Export: $29.1 billion
- Top exports: Wheat (41%), oilseeds except soybean (23%), dry peas and beans (16%)
- Top export markets: China (25%), United States (12%), Japan (8%)
Key crop production stakeholders
- Canada Grains Council
- Cereals Canada
- Grain Growers of Canada
Horticulture
- Farm market receipts: $8.6 billion
- Number of reporting farms: 17,433 (2021 data; do not capture other miscellaneous farms.)
- Export: $4.9 billion
- Top exports: Greenhouse products (43%), vegetables and melons (27%), nursery and floriculture (21%)
- Top export markets: United States (97%), Netherlands (1.4%), Japan (0.3%)
Key horticulture stakeholders
- Canadian Horticulture Council
- Canadian Produce Marketing Association
- Canadian Horticulture Alliance
Animal production (including aquaculture)
- 2023 GDP: $7.2 billion
- Employment: 106,700
- Farm market receipts: $37.3 billion
- Number of reporting farms: 76,796 (2021 data; do not capture other miscellaneous farms.)
- Export: $3.8 billion
- Top exports: Beef cattle (47%), animal aquaculture (23%), hogs and pigs (17%)
- Top export markets: United States (94%), Hong Kong (2%), Japan (1%)
Key animal production stakeholders
- Supply-managed farmers associations (for example, dairy and chicken)
- Canadian Pork Council
- Canadian Cattle Association
Food processing and beverage production
- 2023 GDP: $35.2 billion
- Employment: 322,600
- Estimated sales: $175.2 billion (Applies 2023 growth trend from Monthly Survey of Manufacturing to 2022 data from Annual Survey of Manufacturing and Logging. Beverage manufacturing shipments data is excluded due to Statistics Canada confidentiality provisions.)
- Establishments with employees: 8,093
- Export: $56.4 billion
- Top exports: Grain and oilseed milling (25%), meat processing (20%), bakeries (13%)
- Top export markets: United States (80%), China (6%), Japan (3%)
Key food and beverage stakeholders
- Food and Health Consumer Products of Canada
- Food and Beverage Canada
- Wine Growers of Canada
- Canadian Meat Council
Top 3 crop and livestock commodities by average 2019-2023 farm cash receipts
- British Columbia: Dairy ($731 million), vegetables ($656 million), floriculture, nursery and sod ($579 million)
- Alberta: Cattle and calves ($6.3 billion), canola ($3.4 billion), wheat ($2.8 billion)
- Saskatchewan: Canola ($6.3 billion), wheat ($4.5 billion), cattle and calves ($1.7 billion)
- Manitoba: Canola ($1.9 billion), wheat ($1.5 billion), hogs ($1.3 billion)
- Ontario: Dairy ($2.5 billion), vegetables ($2.4 billion), soybeans ($2.1 billion)
- Quebec: Dairy ($2.8 billion), hogs ($1.7 billion), chickens ($876 million)
- New Brunswick: Cannabis ($272 million) (based on data for 2020-2023, as cannabis data are confidential for New Brunswick for 2019); potatoes ($197 million), dairy ($131 million)
- Nova Scotia: Dairy ($164 million), fruit ($79 million), eggs ($49 million)
- Prince Edward Island: Potatoes ($293 million), dairy ($98 million), cattle and calves ($37 million)
- Newfoundland and Labrador: Dairy ($49 million), eggs ($21 million), floriculture, nursery and sod ($9 million)
Snapshot of agricultural trade and market access
Trade at a glance
AAFC works to open new markets, capitalize on trade opportunities and promote science-based trade rules.
Canadian agri-food and seafood exports reached $99.1 billion in 2023, representing a 6.6% increase from $92.9 billion in 2022. Top 5 exported agricultural, agri-food and seafood products (2023):
- Wheat and meslin ($11.9 billion)
- Canola oil ($7.1 billion)
- Various breads/pastry ($7.0 billion)
- Canola seed ($6.0 billion)
- Pulses ($4.7 billion)
Canada's position in the world
In 2023, the top 5 export destinations made up 83% of Canada's international trade, with 60.1% of exports destined to the United States. Top 5 export markets and their share of Canada's agricultural, agri-food and seafood exports (2023):
- United States, 60.1%
- China, 11.6%
- Japan, 4.4%
- European Union, 4.2%
- Mexico, 2.7%
Supporting trade
AAFC Trade Commissioners work with Global Affairs Canada, AAFC and the Canadian Food Inspection Agency to resolve market access issues, provide in-market intelligence and advance export opportunities.
International trade missions, trade shows, e-commerce and the Canada Brand Program facilitate new business connections for exporters in key markets.
AgriMarketing offers $129.97 million over 5 years, supporting sector-led promotions to expand and diversify Canadian exports in global markets where free trade agreements (FTAs) are in place.
The Agriculture and Agri-Food Office in the Indo-Pacific region amplifies Canada's presence, fosters new partnerships, and enables Canadian farmers, food processors and distributors to diversify their exports and maximize their business 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 for Canada's interests, and monitoring the implementation of commitments by Canada's trading partners to maintain open and predictable trade.
Free trade agreements
Canada has 15 FTAs covering 51 countries, giving Canadian producers a competitive edge in two-thirds of the global economy. Examples of regional FTAs include:
- 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:
- Colombia
- Costa Rica
- Honduras
- Israel
- Jordan
- Korea
- Panama
- United Kingdom
- Indonesia (announced November 2024)
Ongoing negotiations: Association of South East Asian Nations (ASEAN) and Ecuador.
Paused or inactive negotiations: Canada-United Kingdom bilateral FTA, Canada-India Comprehensive Economic Partnership Agreement (CEPA) and the Canada-MERCOSUR FTA.
In 2023, more than three quarters (78.2% or $76 billion) of Canada's agricultural, agri-food and seafood exports were destined for countries where Canada has a trade agreement in place.
Snapshot of programs
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
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.
Building sector capacity, growth and competitiveness
- AgriDiversity^{note 1} ($5 million over 5 years) — Helps underrepresented and marginalized groups participate in the sector.
- AgriCompetitiveness^{note 1} ($25.7 million over 5 years) — Assists industry to build capacity and enhance sector development through information-sharing activities.
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.
FPT cost-shared programs ($2.5 billion over 5 years)
Programs 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.
- 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 address shared challenges and/or priorities, and further encourages regional collaboration based on the 5 priority areas.
Business risk management (BRM) programs
Funding for BRM programs fluctuates with an annual average of $1.8 billion in payments. 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 drive innovation and growth.
Risk management programs (outside Sustainable CAP programming)
- Canadian Agricultural Loans Act ($65 million; ongoing loan program) — Provides easier access to credit to establish, improve and develop farms, and loans to process, distribute or market the products of farming.
- Advance Payments Program ($3.06 billion; ongoing advance program) — Provides easier access to credit through cash advances to support flexible marketing decisions.
- 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.
- Livestock Price Insurance (5-year program, ends March 31, 2028) — Allows western Canadian producers to purchase price protection on cattle and hogs in the form of insurance policy.
- Maritime Livestock Price Insurance Pilot Program (2-year pilot program, ends March 31, 2026) — Allows maritime producers to purchase price protection on cattle in the form of insurance policy.
Innovation programs
- 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, 2025.
- Canadian Agricultural Strategic Priorities Program ($50.3 million; ongoing program) — Supports the sector to seize opportunities, respond to emerging issues, and pilot solutions to adapt and remain competitive.
Supply management programs
- Dairy Direct Payment Program ($2.95 billion; 10-year program, ends March 31, 2029) — Payments to help cow milk producers transition to new market realities 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).
- 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.
- Poultry and Egg On-Farm Investment Program^{note 1} ($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.
- Market Development Program for Turkey and Chicken^{note 1} ($44 million; 10-year program, ends March 31, 2031) — Helps increase domestic demand and consumption of Canadian poultry products.
Environment programs
- 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 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.
- 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 (BMPs).
- 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.
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.
Other programs
- 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 and 2024-25.
- International Collaboration Program ($1.2 million; annual program) — Supports a range of international memberships and projects aimed at advancing AAFC's science and trade priorities.
- Wine Sector Support Program ($177 million; 3-year program, ends March 31, 2027) – Provides support to licensed Canadian wineries to adapt to ongoing and emerging challenges.
- 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.
- Farm Debt Mediation Service (ongoing program) — Offers free financial counselling and mediation services to farmers who are having difficulties meeting their financial obligations.
Snapshot of science and research capacity
Science and innovation are central to the mandate of AAFC and key to positioning the sector for sustainable growth, competitiveness and resilience.
AAFC's strong national science and innovation capacity is regionally distributed:
- 2,272 branch staff, of which 633 are science researchers and professionals
- 20 research and development centres
- 29 satellite research locations
- 14 Living Labs
- 663 active research and development projects
Agriculture and Agri-Food Canada's Strategic Plan for Science
A 10-year strategy to guide the department's research and science activities, articulated around 3 pillars:
Mission-driven science
- Focus science on defined goals/outcomes
- Promote creativity to identify pathways for science to have the largest impact
- Resources are focussed on transformation
People first strategy
- Build a diverse and inclusive workforce
- Workforce talent remains our most important asset
Organizational effectiveness
- Leveraging 12 national Science Portfolios to promote efforts that cut across commodities, disciplines and geography
- Focussing on Reconciliation, inclusiveness and removing systemic barriers
- Highest standards of integrity in research conduct
Four key science missions
- Mitigating and adapting to climate change.
- 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.
Science expertise is leveraged to support policy and programs development and implementation
- Sustainable Agriculture Strategy: Technical expertise to support collective efforts to address agri-environmental issues in the sector.
- Climate Change Roadmap (CCRM): Science-based assessment of practices with the greatest potential to reduce greenhouse gases (GHGs) and ensure a successful and resilient sector in an uncertain climate future and decarbonized economy.
- Agricultural Climate Solutions — Living Labs, $185 million (2021-2031): Development of a Canada-wide collaborative network where scientists and farmers co-develop solutions to tackle climate change, part of the $4 billion Natural Climate Solution Fund.
- The Government of Canada announced funding of $39 million over 2 years for AAFC and Health Canada to continue research related to alternative pest management tools, systems, and approaches.
- Collaborative Framework (CF): Allows external organizations to collaborate and access AAFC science capacity to undertake research in support of areas of mutual interest. In addition to in-kind resources, industry invests an average of $20 million annually in AAFC for CF research projects.
Sustainable Canadian Agricultural Partnership (2023 to 2028)
- Foundational Science and Research, $104 million (2023-2028): Funding from the Framework to support AAFC intramural scientific activity. This is the main source of non-pay operating funds for Science and Technology Branch's internal annual call for research proposals.
- AgriScience Program, $325 million: Aims to accelerate innovation by providing funding and support for industry-driven pre-commercial science activities and research that benefits the agriculture and agri-food sector and Canadians. Funding may be provided as non-repayable contributions for research activities conducted by industry and/or as collaborative research and development support for research 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.
Supporting Indigenous-led agricultural research
AAFC's Science and Technology Branch (STB) Indigenous Strategy: Provides guidance on the importance of supporting Indigenousled and Indigenous-defined participation in agriculture and on how AAFC-STB staff can contribute to reconciliation through research relationships with Indigenous partners and Indigenous Food System revitalization. Related initiatives include:
- Indigenous Agricultural Science Partnerships (IASP) Fund: Available to AAFC researchers to build and strengthen relationships with First Nation, Inuit and Métis Nation research partners and catalyze the co-development of Indigenous Food Systems research.
- Indigenous Technician Recruitment Initiative: Supports Indigenous-focused recruitment and retention in Science, Technology, Engineering and Mathematics (STEM) disciplines for technical positions at AAFC.
- Interdepartmental Indigenous STEM (I-STEM) Cluster: Launched by AAFC in 2019 to inform and enhance federal policies, programs, and activities related to STEM disciplines, contributing to the ability of member departments to respond to overarching priorities and Calls to Action (that is, Calls to Action on Anti-Racism, Equity and Inclusion in the Federal Public Service, as well as Truth and Reconciliation).
Highlights of scientific accomplishments
Mission: Mitigating and adapting to climate change
- The Agricultural Climate Solutions (ACS) — Living Labs Program (2021-2031) is a coordinated network of 14 projects across the country, featuring at least one in each province and involving over 270 partner organizations, including Indigenous partners. It is built on an approach to innovation where farmers, scientists, and other partners co-develop, test, and evaluate beneficial management practices and technologies in a real-life context on working farms. The practices and technologies under development in this program are designed to increase soil carbon and reduce emissions while providing other environmental benefits, and are tailored to the unique climate, soils and production systems in each region.
Mission: Accelerating the digital transformation of the agriculture and agri-food sector
- 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 used AI models to accurately predict the optimum amount of nitrogen needed to help canola producers increase yields while reducing their costs and environmental footprint. Applying the right amount of nitrogen fertilizer at the right time boosts crop productivity, minimizes fertilizer costs, prevents nitrogen runoff into waterways, and reduces GHG emissions.
Mission: Increasing the resiliency of agro-ecosystems
- AAFC scientists worked with external partners to discover that cranberry and blueberry excess leftover from fruit processing fed to chickens could reduce antibiotic use and be a long-term solution to antimicrobial resistance as they improve the gut health and immune system, resulting in more beneficial bacteria, and fewer disease causing bacteria such as Salmonella and E. coli as well as antimicrobial-resistant genes.
- Scientists studied how ultraviolet (UV) light, operating at different wavelengths and targeting specific pathogens, could disinfect grains. They applied UV light on fungi infected wheat and corn kernels as well as petri dishes containing fungal spores. This treatment reduced more than 94% of the fungi on grain kernels. Work on novel food processing technologies will ultimately help the food and grain industry improve the safety, quality and sustainability of food processing.
Mission: Advancing the circular economy by developing value-added opportunities
- Scientists created a new type of yogurt using skim milk powder and canola oil to increase its protein and "vegetable" fat content, providing the dairy processing industry the potential to become a partner in the circular economy, and consumers with a product with new nutritional properties.

Snapshot of sector diversity, equity and inclusion

As an economic department, AAFC recognizes that diversity and inclusion provides significant benefits to sector growth and competitiveness. AAFC is committed to addressing barriers and creating opportunities for increased participation of underrepresented and marginalized groups within the sector.

Underrepresented or marginalized groups in the agriculture and agri-food sector in 2021, by identify factor (%)
Identity factor	Primary agriculture	Food processing	Total Canadian economy
Indigenous peoples	3.0	2.7	4.1
Women	35.2	41.1	47.8
2SLGBTQI+	N/A	N/A	4.0
Youth (15-35)	29.1	31.3	34.3
Racialized groups	9.7	37.1	26.9
Persons with disabilities	17.0	N/A	16.2
Official language minority communities	3.7	6.4	6.3
Sources: Statistics Canada, 2021 Census of Population and 2017 Canadian Survey on Disability (Persons with disabilities data).

Sectoral challenges and barriers may be amplified for underrepresented and marginalized groups, such as:

lack of access to capital and land
limited networks for information sharing and support
lack of mentors with similar lived experiences
lack of collateral and start-up funding opportunities
funding providers may view novel or cultural operations as high risk
systemic bias, discrimination or harmful stereotypes

The intersection of identity factors can amplify challenges.

AAFC collaborates across government and jurisdictions to support underrepresented and marginalized groups entering and operating in the sector.

Enhanced diversity, equity and inclusion can:

strengthen rural vitality
mitigate labour challenges
increase public trust
propel innovation
open new market opportunities
support Reconciliation and Indigenous self-determination

Mainstream efforts to support underrepresented and marginalized groups in the sector

Gender-based Analysis Plus: Assesses how diverse groups of Canadians may experience policies, programs and initiatives. AAFC's main tool to challenge assumptions, and identify potential impacts, while considering barriers and systemic inequalities as well as opportunities to address barriers.
Sector engagement tables: A forum for sector-government engagement, including with underrepresented and marginalized groups, to advance inclusive sector growth and competitiveness.
Canadian Agricultural Youth Council: Consultative body of up to 25 young Canadians from across the country providing perspectives and advice on the challenges, opportunities, policies and programs affecting the sector.

Some of AAFC's targeted sector-facing programs and services to support underrepresented and marginalized groups in the sector

AgriDiversity Program ($5 million over 5 years): Helps underrepresented and marginalized groups participate in the sector.
Youth Employment Skills Program ($1.2 million ongoing, plus $12.3 million each for 2023-24 and 2024-25): Funds projects that employ youth and youth facing barriers.
Indigenous Pathfinder Service: Offers personalized advice and guidance to help Indigenous communities, organizations and individuals navigate relevant programs, services, information, tools and support available to start or expand activities in the sector.
Local Food Infrastructure Fund (LFIF) ($42.7 million, 3-year program that 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.

Inter-departmental collaboration

Government of Canada's 50-30 challenge: Challenges Canadian organizations to increase diverse representation in leadership and in their workforce; targeting gender parity ('50%') and representation of other groups ('30%').
Farm Credit Canada's (FCC) diversity programs: Provides lending, enhances events and creates resources specifically for Indigenous, women, or youth entrepreneurs to start or grow their agricultural businesses.
Women Entrepreneurship Strategy: Aims to increase women-owned businesses' access to the financing, networks and expertise they need to start, scale up and access new markets. FCC's Women Entrepreneur Program is part of this strategy.

Diversity, equity and inclusion and the Sustainable Canadian Agricultural Partnership and other programs

The 5-year (2023-2028), $3.5-billion Sustainable Canadian Agricultural Partnership (Sustainable CAP) includes a guiding principle to "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." (Guelph Statement, 2021)

Several federal-only programs under Sustainable CAP incorporate mechanisms or flexibility for all or certain targeted underrepresented and marginalized groups (such as AgriInnovate, AgriMarketing and AgriScience). Monetary incentives may include additional cost-shared ratios and carve outs. Nonmonetary incentives may include flexible intake periods, extended application times, or simplified applications. Provinces and territories are also exploring flexibilities for underrepresented and marginalized groups and have increased data collection for cost-shared programs.

Some programs outside of Sustainable CAP may offer flexibilities or support as well (Agricultural Clean Technology Program, Poultry and Egg On-Farm Investment Program, Market Development Program for Turkey and Chicken, Youth Employment Skills Program).

For example, AAFC has 2 'Challenge' programs — the Food Waste Reduction Challenge and Agricultural Methane Reduction Challenge — which are innovative outcomes-based programs where successful participants receive financial and non-financial support to tackle persistent problems. These programs have attracted and aim to support a greater proportion of underrepresented and marginalized group participants.

Agriculture and Agri-Food Canada's farm income forecast
Background
AAFC conducts a forecast of farm income twice a year, in the summer (June–July — shared internally only) and winter (December–January — published on the AAFC website) to understand the key short-term economic trends in primary agriculture and how it impacts the farm income situation in Canada. The farm income forecast (FIF) is a federal–provincial process, and AAFC works in collaboration with the provincial ministries of agriculture and Statistics Canada to develop estimates, which are then shared with these partners to support their own work. The FIF results in an agreed upon economic outlook for the sector that supports the forecast of business risk management program expenditures and discussions between AAFC and the provincial ministries of agriculture.
AAFC's most recent forecast was completed in January 2025, with estimates for 2024 and 2025. AAFC's forecast aligns with historical figures from Statistics Canada, and key results from this forecast are currently available on the AAFC website at Farm Income Forecast for 2024 and 2025.
Highlights of key results
2023 (Statistics Canada data)
AAFC uses Net Cash Income (NCI) as its main measure to look at farm income; it is the difference between farm cash receipts (the sales of agricultural products as well as program payments) and cash expenses. For 2023, despite lower global crop prices and continued pressure from elevated production expenses, national NCI reached a record high of $24.0 billion, 9% higher than 2022. This was largely due to strong increases in North American cattle prices, improved crop marketings offsetting lower crop prices, and a significant reduction in expense growth compared to previous years.
2024 and 2025 (AAFC forecast)
2024 NCI is forecast to have declined 7% from its 2023 peak to $22.4 billion, although it would remain 17% above the 2019-2023 average. Continued reductions in global crop prices are largely responsible, as lower crop receipts are expected to have more than outweighed the effects of high cattle and hog prices and moderation of most production expenses.
- Lower global prices for grains and oilseeds, which have been falling since their recent peak in 2022, are expected to have contributed to a projected decline in crop receipts of close to 6%. Livestock prices are expected to have been supported by tight North American cattle supplies and strong pork demand, leading to an increase of 6% in overall livestock receipts. Program payments, a smaller component relative to market receipts, are forecast to have declined by 5%, in large part due to lower Dairy Direct Payments and, to a lesser extent, lower provincial income stabilization and crop insurance payments.
- While expenses remain at an elevated level, growth has been moderate since 2021 and 2022 when expenses increased by 9 and 19%, respectively; growth fell to 3% in 2023. Overall expense growth is forecast to have slowed further in 2024, increasing only 0.4% as declines in fuel and fertilizer are expected to have continued, and feed expenses are also expected to have fallen modestly after levelling off in 2023. At the same time, growth is expected for interest expenses, livestock purchases and labour.
In 2025, NCI is forecast to decline a further 15% to $19.1 billion, falling to the same level as the 2019-2023 average. Increased international crop supplies are expected to keep pressure on global grain prices, leading to a further decline of 6% in crop receipts. Little change is expected in livestock receipts as the impressive price growth expected for cattle in 2024 levels off. Program payments are expected to continue declining, by about 5%, with further reductions in crop insurance and, to a lesser extent, Dairy Direct Payments and provincial income stabilisation payments. Overall expenses are forecast to be steady, with fertilizer and interest expenses expected to decline while labour expenses continue to rise.
Considerations
The high prices seen from 2021 to 2023, particularly for grains and key inputs, such as fuel and fertilizer, were driven by short-run factors, beginning first with the economic recovery from COVID-19 increasing demand and global supply chain disruptions, then further exacerbated by Russia's war on Ukraine, global inflationary pressures and global crop supply shortfalls. Since then, ample global commodity supplies, moderate global demand growth and market adjustments have contributed to declines in crop and input prices from their recent peaks; this is expected to continue in 2024 and 2025. The more recent increases in cattle prices resulting from the reduced North American cattle herd are still present and prices are expected to remain elevated in the near term.
These forecast results for 2024 and 2025 focus on the national picture, but there can be significant year-to-year variation by region and farm types, which is not captured by a single national statistic.
For example, NCI is forecast to have declined in Saskatchewan, Manitoba, Ontario, Quebec and New Brunswick in 2024, and is forecast to decline in all provinces except Prince Edward Island in 2025.
Several factors can influence the distribution of results, but they are often driven by regional differences in the production mix and growing conditions.
Additionally, the forecast is subject to many uncertainties, mainly for 2025:
- The current trade environment is very uncertain. The imposition of United States (U.S.) tariffs on imports from Canada and other countries, as well as the ongoing Chinese anti-dumping investigation into canola, represent a significant source of uncertainty that has not been built into the forecast.
- Climate and weather variation is another common source of risk. Despite significant concerns about dryness at the beginning of the growing season, crop production in 2024 was up 3% compared to 2023, and 3% above the previous 5-year average. The forecast for 2025 assumes normal growing conditions, but variations in weather and climate conditions during the growing season could lead to crop production being above or below historical trends.
- Geopolitical tensions, such as the uncertainty around Russia's ongoing war against Ukraine and tensions in the Middle East, and changes in macroeconomic conditions in general, can also have an impact on the forecast. Many of these elements can change suddenly and unexpectedly, with impacts on the farm income situation in Canada.
AAFC's next forecast will be completed in the summer of 2025, with results expected in July based on market and growing conditions as of early June. It will provide an updated forecast for 2025 and a first look at 2026. Work is also ongoing to better understand the impact of U.S. tariffs on the farm income situation in Canada, using AAFC's most recent winter farm income forecast as a baseline against which to compare.
Supply management
Issue
Within Canadian agriculture, the dairy, poultry and egg production sectors operate under a unique national supply management (SM) system. SM oversees the production, marketing and pricing of these agricultural products and is composed of following 3 "pillars":
- Production control: Production is regulated to match domestic demand across sectors (dairy, poultry, eggs) using production quotas;
- Pricing mechanisms: Prices are set according to production costs, market conditions and product type; and,
- Controlled imports: Imports are managed through tariffs rate quotas (TRQs) to achieve predictable levels of trade.
Context
SM aims to ensure a reasonable return to producers for their labour and investment, while consumers receive a steady supply of products.
SM was established in the 1970s and has strong support across Canada's major political parties.
Current status
The supply-managed sectors are significant contributors to Canada's agricultural sector, generating almost $15 billion in farm cash receipts in 2023 and creating over 100,000 direct jobs in Canada in production and processing activities.
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 averaging 99 cows per farm, with most farms having between 50 and 75 milking cows.
As of 2023, there were 4,852 supply-managed producers in the poultry and egg sector. Of that amount, there are 2,853 chicken producers, 513 turkey producers, 1,243 egg producers, and 243 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 typical Canadian poultry and/or egg farm is primarily family-owned and is specialized.
Recent trade agreements (Comprehensive Economic and Trade Agreement [CETA, 2016], Canada-United States-Mexico Agreement [CUSMA, 2019] and Comprehensive and Progressive Agreement for Trans-Pacific Partnership [CPTPP, 2018]) provided Canada's key trading partners with additional access to the domestic dairy, poultry and egg market, while keeping the SM system and its pillars intact. In response to these agreements, the Government of Canada is implementing a series of programs (up to $4.8 billion) to compensate supply managed sectors for their impact (see Annex).
Canada faces scrutiny from its trading partners (including the United States [U.S.], New Zealand, the EU and Australia) regarding its supply management system for dairy. In particular, Canada's administration of its TRQs has raised concern among other dairy producers, notably the U.S. and New Zealand.
While disputes have so far focussed on TRQ policies, the U.S. and New Zealand have also raised concerns on other issues such as Canada's milk class pricing system, Canadian dairy exports and government support to the dairy sector.
Upcoming priorities
Dairy issues remain an area of continued interest with Canada's trade partners.
With the U.S., dairy issues played a significant role during the Canada-United States-Mexico Agreement (CUSMA) negotiations and following the agreement entering into force.
[REDACTED]
[REDACTED]
A private member's bill (C-282) was introduced in 2023 to amend the Department of Foreign Affairs, Trade and Development Act, preventing the Minister of Foreign Affairs from making trade commitments on supply-managed goods. The bill, gaining multi-partisan support in the House of Commons, was in the Senate at the end of the first session of the 44th Parliament.
Related programs/initiatives
The federal government is following through on its commitment to provide full and fair compensation to supply-managed sectors for the impacts of CETA, CPTPP and CUSMA, which adds up to $4.8 billion for dairy, poultry and egg producers and processors.
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
Sustainable Canadian Agricultural Partnership
Issue
Launched in April 2023, the Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a 5-year, $3.5 billion investment in programs and other initiatives by federal, provincial, and territorial (FPT) governments, aimed at fostering sustainability, innovation, and economic competitiveness in the agriculture and agri-food sector.
Context
Sustainable CAP is based on a shared, FPT vision for the sector articulated in the Guelph Statement, which established 5 priority areas aimed at reducing greenhouse gas (GHG) emissions by 3 megatonnes to 5 megatonnes, enhancing the resilience of the food system, and fostering diversity and inclusion within the agricultural sector.
Collaboratively developed with provincial/territorial partners (PTs), Sustainable CAP programming reflects input from diverse stakeholders, including producers, processors, youth, women and Indigenous communities, gathered during extensive national and PT consultations.
Sustainable CAP provides $500 million in new FPT funding compared to the previous Canadian Agricultural Partnership (CAP). 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.
The Sustainable CAP builds upon 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 business risk management (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 to encourage the participation of underrepresented groups in the sector;
- Continuing enhancements to science and innovation, market development and trade, and increased emphasis in other focus areas (for example, labour, Indigenous participation, mental health); and
- Reflecting the sustainable development approach and competitiveness throughout the framework.
Current status
The framework is now nearing the end of its second year, and federal and cost-shared programming is fully underway.
Framework mechanisms, including multilateral and bilateral committees, working groups and other forums, are used to support the implementation of cost-shared programming and delivery of collective FPT commitments established through Sustainable CAP.
Upcoming priorities
Enhanced data sharing and results reporting was a key outcome for Sustainable CAP, and significant FPT efforts are underway to support efficient data sharing.
Year 2 of Sustainable CAP included strategic bilateral discussions among FPT officials, focusing on effective framework implementation and constructive engagement on key issues for each jurisdiction.
Work on developing the Next Policy Framework (NPF), the successor to the Sustainable CAP when it expires in March 2028, will begin in the spring of 2025. Formal discussions with PTs on the NPF are expected to commence in the fall of 2025.
Related programs/initiatives
Sustainable CAP includes BRM programs, cost-shared strategic initiatives and federal-only strategic initiatives.
Strategic initiatives
- Around $1 billion in federal programs and activities that are national in scope and funded and delivered by AAFC.
- $2.5 billion in cost-shared programs that are funded 60:40 (F:PT) and delivered by provincial and territorial governments.
Business risk management programs
- An average of $1.8 billion annually (combined federal and provincial/territorial) for demand-driven BRM programs to assist producers in managing significant risks that threaten the viability of their farm and are beyond their capacity to manage.
Annex — The Guelph Statement
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 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
Business risk management programs — overview
Issue
Producers have access to a full suite of federal–provincial–territorial (FPT) business risk management (BRM) programs that provide them with protection against income and production losses, helping them manage risks that threaten the viability of their farms. Under the Sustainable Canadian Agricultural Partnership (Sustainable CAP), 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.
Context
The Canadian agricultural sector is faced with risks that can have significant impacts on farm viability, including: a short growing season, extreme weather events, disease and pests, as well as vulnerabilities to market volatilities and trade risks.
BRM programs are long established and positioned to provide support to farmers and help them manage these risks. They are governed by the Farm Income Protection Act and the FPT Multilateral Framework Agreements (MFAs).
The current suite of FPT cost-shared BRM programs are as follows:
- AgriInvest is a producer-government savings account to help address small income declines;
- AgriStability is a margin-based program to assist with large income declines;
- AgriInsurance addresses production declines caused by natural hazards; and
- AgriRecovery is a framework to develop initiatives that help cover extraordinary costs to recover from natural disasters.
The Livestock Price Insurance Program (LPIP) complements the main BRM suite by supporting cattle and hog producers in British Columbia, Alberta, Saskatchewan, and Manitoba manage downside price risks. A Maritime Livestock Price Insurance Pilot Program (MLPIPP) is also currently underway in New Brunswick and Prince Edward Island.
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.
Current status
Numerous changes to BRM programs were introduced under the Sustainable CAP (2023-28). These include:
- Increasing the AgriStability compensation rate from 70 to 80% and offering a new streamlined AgriStability model that betters aligns with income tax forms.
- Integrating environmental priorities into BRM through an on-going 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 Agri-Recovery 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.
The interest-free portion of the Advance Payments Program (APP) was temporarily increased from $100,000 to $250,000 on March 7, 2025, for the 2025 program year.
Upcoming priorities
Sustainable CAP is currently in its second year and FPT governments are considering possible changes to the suite of programs.
The department is currently engaged in feasibility studies of Whole Farm Revenue Insurance for fruits, vegetables and potatoes. Studies for the hog sector should start early in 2025. Studies on grains and oilseeds have been completed and a study on cattle is being finalized. AAFC is working closely with industry associations on program design and coverage options.
FPT officials are conducting analyses on several proposals from provinces to improve AgriStability:
- [REDACTED]
- [REDACTED]
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Work is ongoing on these proposals at the FPT BRM Working Group, which meets regularly to discuss analysis and provide recommendations. [REDACTED]
A review of the design and delivery of the APP was completed in the fall of 2024. Findings and recommendations included a request to extend APP's temporary $250,000 interest-free limit to the 2025 program year, which was granted [REDACTED]
Related programs/initiatives
On September 9, 2024, a 6-month stay of default for 2023 APP advances was announced for apples, and provided repayment flexibilities for 2024 advances on cherries, plums, pears and grapes to producers in British Columbia. This stay of default will alleviate some of the pressures producers are facing due to the untimely closure of the BC Tree Fruits Cooperative and will allow them to better respond to current market conditions.
Business risk management program spending
Issue
Since 2020-21, business risk management (BRM) program spending has risen considerably. In 2020-21, federal costs of BRM programs represented $1.1 billion as compared to a projected $2.3 billion for 2023-24 (+102%). Due to turbulence in international trade, disease and pests, extreme weather events, and climate change, [REDACTED]
Context
BRM programs are 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.
Growth in the sector (market receipts protected by BRM programs have increased by 66% between 2013 and 2022), the droughts of 2021 and 2023, historically high prices followed by falling prices, and changes to BRM programs have led to an increase in BRM program spending in recent years.
In the 2010s, federal spending on BRM programs averaged a yearly $1.1 billion, while it is expected to double to $2.3 billion on average for the second half of the 2020s.
BRM programs, with the exception of the Advance Payments Program, are negotiated with the provinces and territories such that any changes must be agreed to by the provinces and territories representing the majority of program participants.
Current status
AAFC continues to track BRM program spending and to report annually to Cabinet.
AAFC, in collaboration with the provinces and territories, is evaluating the merits and feasibility of various proposals to improve BRM programs, including proposals related to AgriStability expense coverage and payment limits, lessons learned from previous AgriRecovery initiatives, and new approaches to AgriInsurance forage production coverage.
AAFC continues to evaluate the feasibility of new agricultural insurance programs covering all of a farm's activities.
Upcoming priorities
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.
Historically, changes to BRM programs have been negotiated with provinces and territories as part of the negotiations for the next policy framework, for which a policy statement is expected in 2026.
Related programs/initiatives
The Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a $3.5-billion, 5-year agreement (April 1, 2023 to March 31, 2028), between the federal, provincial and territorial governments to strengthen the competitiveness, innovation, and resiliency of the agriculture, agri‐food and agri‐based products sector. The agreement includes $1 billion in federal programs and activities and $2.5 billion in cost-shared programs and activities funded by federal, provincial and territorial governments. Additionally, the agreement manages the continuation of FPT BRM programs.
- Internal evaluation of BRM programs: Audits and evaluations (AgriStability 2022–23, AgriInvest 2022–23, AgriInsurance 2023–24, AgriRecovery 2023–24)
Grocery Code of Conduct
Issue
Industry is working to implement a voluntary Grocery Code of Conduct (Grocery Code) by June 2025, with some process details still under discussion.
Context
Market concentration gives large retailers a dominant position and significant market power, which has been used in ways that negatively impact others in the supply chain, including farmers, food manufacturers and independent retailers.
These behaviours can weaken Canada's food supply chain by creating a challenging competitive environment, negatively impacting innovation and investment and causing supply chain disruptions.
In July 2021, federal, provincial and territorial (FPT) Agriculture Ministers called on industry to develop a Grocery Code of Conduct with dispute resolution to improve transparency, predictability, and respect for the principles of fair dealing. On July 18, 2024, industry confirmed that organizations across the supply chain, including the 5 largest grocery retailers, had committed to the Grocery Code of Conduct.
Current status
Ministers agreed to provide $1.2 million in joint short-term funding to support an Adjudication Office for the Grocery Code of Conduct. [REDACTED]
Industry is on track to implement the Grocery Code of Conduct by June 2025. Karen Proud will become the first President and Adjudicator effective March 2025.
Discussions on certain process elements, notably dispute resolution, remain ongoing. However, the Grocery Code of Conduct will focus on voluntary compliance and informal dispute resolution, with arbitration being a last resort.
Upcoming priorities
FPT governments continue to actively monitor and support industry's progress.
Related programs/initiatives
While the Grocery Code of Conduct will not address food affordability, the Government is taking other action to stabilize grocery prices. For example:
- The Government has amended the Competition Act to create a level playing field and improve affordability and consumer choice.
- The Government has also launched the Food Price Data Hub to improve the availability and accessibility of data on food prices.
Food Policy for Canada
Issue
AAFC is the lead for the Food Policy for Canada. Priorities in the next 3 to 6 months include: implementing food policy-related investments announced as part of Budget 2024; [REDACTED]; and establishing a new direction for the next phase of the Food Policy for Canada.
Context
The Food Policy for Canada was launched in 2019 as an evergreen and adaptive policy to align and coordinate federal food-related initiatives and address critical challenges facing Canada's food systems. As part of the Policy, a Canadian Food Policy Advisory Council was established, with members appointed by the Minister of Agriculture and Agri-Food.
Budget 2024 included a number of investments that AAFC led or supported to strengthen Canada's food systems, including a National School Food Program.
A domestic Food Loss and Waste Reduction Action Plan [REDACTED]. Launching the Action Plan by the end of 2025 was agreed to by Canada at the 2023 North American Leaders' Summit.
Current status
AAFC is working in close collaboration with Employment and Social Development Canada (ESDC) to ensure the National School Food Program supports the objectives of the Food Policy for Canada and that AAFC investments, such as the Local Food Infrastructure Fund (LFIF), are complementary.
[REDACTED]
Upcoming priorities
Implement the renewed LFIF.
[REDACTED]
Secure and implement Ministerial direction for the Food Policy Council.
Related programs/initiatives
The Food Policy for Canada complements and supports other key Government of Canada priorities, including the Healthy Eating Strategy and the Poverty Reduction Strategy, as well as implementation of the United Nations Declaration on the Rights of Indigenous Peoples Act (UNDA) Action Plan.
Budget 2024 invested $62.9 million over 3 years to AAFC to renew and expand the LFIF to support community organizations to invest in local food infrastructure, with priority to be given to Indigenous and Black communities. Part of the expansion will support community organizations to improve infrastructure for school food programs as a complement to the National School Food Program.
The SFIF launched on September 6, 2024, to help not-for-profit organizations invest in infrastructure and equipment to produce, process, store, and distribute food specifically for school food programming across Canada. Ten initial recipients have been approved for funding, including: Breakfast Clubs of Canada, Farm to Cafeteria Canada, Food Banks Canada, Food Depot Alimentaire, Food First NL, Mazon Canada, Saskatchewan School Boards Association, Second Harvest, United Way British Columbia, and United Way Eastern Ontario.
The following initiatives were also announced in Budget 2024, and are being advanced by other departments and agencies, in support of the Food Policy for Canada's objective to strengthen Indigenous food systems:
- $14.9 million over 3 years [REDACTED] to renew and expand the Northern Isolated Community Initiatives Fund to all regions of Inuit Nunangat to support local and Indigenous food production systems.
- $25.1 million over 2 years [REDACTED] to expand the Canadian Shellfish Sanitation Program to assist Indigenous communities to safely access shellfish harvest for food, as well as social and ceremonial purposes.
- $2.8 million over 3 years [REDACTED] to implement the UNDA Action Plan Measures to bolster the policy and engagement capacity among Inuit Tapiriit Kanatami and Inuit Treaty Organizations to co-develop legislative and policy options to facilitate the production, sale and trade of traditional and country food.
Agricultural Labour Strategy
Issue
The 2021 mandate letter to the Minister of Agriculture and Agri-Food included a commitment to develop a sector-specific agricultural labour strategy to address persistent and chronic labour shortages in farming and food processing in the short and long term.
Context
Labour shortages in the agricultural sector have persisted for decades given that employers have difficulty attracting Canadians to the sector due to the rural location, seasonal nature and physical requirements of most jobs. During the COVID-19 pandemic the issue was exacerbated for the entire Canadian economy.
As the pandemic has receded, the agricultural labour landscape also improved, with job vacancy rates for the sector continuing a steady downward trend. Overall, job vacancy rates in the agricultural sector are now below average vacancy rates for the economy as a whole, but some sectors continue to have more acute shortages.
The agricultural sector relies heavily on temporary foreign workers (TFWs). Many advanced economies, including the United States, Germany, Australia, France and the United Kingdom, similarly depend on international workers particularly for seasonal agricultural work.
TFW use in both primary agriculture and food and beverage manufacturing have grown steadily in Canada in recent years; in 2023, just over 70,000 TFWs worked in primary agriculture and just over 45,000 TFWs worked in food and beverage manufacturing.
The department conducted stakeholder consultations on the strategy including with industry, unions, underrepresented and marginalized groups and provinces and territories. A "What We Heard Report" summarizing the results of the consultations was released in May 2023. The most consistent message received during the consultation process dealt with frustration accessing the Temporary Foreign Worker Program (TFWP) and the desire to improve pathways to permanent residency for workers in the sector.
In addition to AAFC's work, industry is taking leadership to address labour issues through work led by the Canadian Agricultural Human Resource Council (CAHRC), in partnership with Food and Beverage Canada and the Canadian Federation of Agriculture, to develop a "national workforce strategic framework". AAFC is leveraging this work and continues to engage closely on this initiative.
Current status
The Government provided $23.7 million in October 2023 to March 2024 for CAHRC and Food Processing Skills Canada to address human resource shortages in Canada's agriculture sector through training programs and other initiatives.
Since Budget 2022, the Government announced a number of reforms to the TFWP (see relevant note), including a new agriculture and fish processing stream on which Employment and Social Development Canada is currently consulting.
The Government has extended the Agri-Food Immigration Pilot until May 2025. The program provides a pathway to permanent residence for experienced, non-seasonal workers in the agricultural and food processing sector. Additionally, in February 2024, category-based selections under Immigration, Refugees and Citizenship Canada's Express Entry Program were announced to respond to changing economic and labour market needs within Canada, with agriculture and agri-food occupations being one of the priority categories.
Overall, vacancy rates in the sector have been steadily improving over the last year. The Job Vacancy and Wage Survey data from Statistics Canada for 2023 indicates that vacancy rates for the food and beverage manufacturing sector are lower than the economy wide vacancy rate of 4.18%, with food manufacturing at 3.58% and crop production at 4.88%.
Upcoming priorities
A decision on [REDACTED] an agricultural labour strategy will be required from the Minister.
Related programs/initiatives
- TFWP
Temporary Foreign Worker Program
Issue
The agricultural sector relies heavily on temporary foreign workers (TFWs), with over 70,000 TFWs working in primary agriculture and over 45,000 TFWs working in food and beverage manufacturing.
Context
The Temporary Foreign Worker Program (TFWP) is jointly administered by Employment and Social Development Canada (ESDC) and Immigration, Refugees and Citizenship Canada (IRCC), and assists Canadian employers with filling their labour requirements when qualified Canadians and permanent residents are not available and ensures that TFWs are protected while in Canada.
- The TFWP requires employers to obtain a Labour Market Impact Assessment (LMIA) to demonstrate that a TFW will not have a negative impact on the Canadian labour market.
- The 2 key components required for hiring through the TFWP are positive LMIAs issued to employers by ESDC, and eligibility to receive a work permit as determined by IRCC.
Agricultural workers come to Canada via four streams of the TFWP; the seasonal agricultural worker program (SAWP); the agricultural stream; the low-wage stream; and the high-wage stream.
Agricultural employers are the highest volume users of the program. Most TFWs in the sector are hired in occupations such as general farm workers, industrial butchers and food manufacturing labourers.
Broadly speaking, TFWs are used to fill labour shortages within primary agriculture (for example, greenhouses, fruit and tree nut farms, horticulture products) for shorter, seasonal periods of 12 to 16 weeks. These workers typically come in via the SAWP and agricultural stream and represent approximately 20% of the total workforce in primary agriculture (as much as 40% in horticulture industries).
In food and beverage processing (for example, meat butchering and packing, frozen pizza manufacturing), where most positions are year-round, reliance on TFWs has been growing. These workers typically come in via the low-wage stream and represent approximately 10% of the workforce.
Current status
There are 3 key issues to be aware of.
1. ESDC changes to the TFW Program
In response to market conditions and declining job vacancies, several changes have been made to the TFWP to reduce the use of TFWs.
In March 2024, ESDC adjusted the cap on low-wage TFWs from 30% to 20%, effective May 1, 2024, for 5 of the 7 priority sectors, including food processing. In August 2024, ESDC announced further tightening measures, including a further cap reduction to 10% for most sectors, with the exception of agricultural, healthcare, and construction occupations, which remain at 20%.
Several agricultural stakeholders such as the Canadian Meat Council, Mushrooms Canada, Fruit and Vegetables of Ontario, Food and Beverage Canada, National Cattle Fedders Association etc. have indicated the rapid pace of these successive measures have made it difficult for businesses to adjust and plan ahead.
2. New Agriculture and Fish and Seafood Stream
ESDC is working to modernize the TFW Program with a new foreign labour stream for Agriculture and Fish & Seafood Processing, which will be implemented as early as 2027.
The new program aims to streamline the various TFWP streams that impact the agriculture, fish and seafood processing sector, and is intended to include sectoral work permits for workers.
ESDC-led consultations with industry groups started in the spring of 2024 and are ongoing.
3. Immigration Levels Plan
Every year the Minister of Immigration, Refugees and Citizenship must table in Parliament a projection of permanent resident admissions for the next calendar year on or before November 1. The Immigration Levels Plan presents a hard target for the next year and a notional target for the following 2 years.
This year, the Government broadened the scope of the Levels Plan to include temporary residents, in line with the Government's commitment to decrease temporary resident levels from 6.2% to 5% of the population by the end of 2026.
Seasonal workers will not be counted toward the temporary resident targets and workers in sectors with labour shortages, including agriculture, will be prioritized under the TFWP targets.
Upcoming priorities
AAFC continues to work with ESDC, IRCC, and stakeholders to ensure the needs of the agricultural sector are considered under the TFWP. ESDC is consulting on the new stream under the TFWP and the department will continue to provide feedback throughout the process.
AAFC continues to engage with stakeholders and works regularly with ESDC and IRCC to ensure the needs of the agricultural sector are considered when changes are being made.
Related programs/initiatives
- Agricultural Labour Strategy
Supply chain challenges
Issue
Well-performing domestic supply chains are critically important to ensure Canada's agricultural goods reach critical domestic and international markets reliably. However, issues including labour disruptions, transportation bottlenecks, extreme weather and geopolitical conflicts can have significant impacts on Canada's supply chains and undermine our ability to supply domestic and international markets.
Context
Well-functioning domestic supply chains across rail, trucking and ports are critical to ensuring Canada is able to meet its export commitments. Budget 2023 provided $52.2 million to Transport Canada (TC) to establish a National Supply Chain Office (SCO); develop a long-term roadmap for Canada's transportation infrastructure; and support increased supply chain visibility through enhanced data efforts.
AAFC has worked closely with TC in the establishment and scale-up of the SCO, and on supply chain policy issues in rail and at port with unique implications for agriculture.
Current status
The SCO was launched in December 2023 and is currently finalizing a National Transportation Supply Chain Strategy. The SCO also plays a key role in convening stakeholders to share information during supply chain disruptions, and to discuss issues such as network capacity and planning, with the aim of improving data availability for decision making and identifying opportunities for optimization in the near and medium term.
The threat of supply chain disruptions is a significant ongoing concern for agricultural stakeholders. Various labour disruptions at railways and ports in 2024 and 2023, and the threat of wildfires and floods, contribute to overall concerns regarding the reliability of Canada's transportation network.
Upcoming priorities
The SCO aims to publish its Transportation Supply Chain Strategy in Spring 2025 and will continue to engage with AAFC and other interested partners within and outside government as it is finalized.
Related programs/initiatives
In September 2023, in line with a Budget 2023 commitment, Transport Canada initiated an 18-month interswitching pilot project, which extends the interswitching zone (that is, the zone in which shippers could seek to transfer traffic between railways) from 30 km to 160 km for shippers in the prairie provinces. Transport Canada is considering the future of interswitching in light of the results of the pilot (which sunsets in March 2025), as well as feedback from stakeholders. Agricultural stakeholders are supportive of the pilot and would wish to see it made permanent as a means of encouraging greater competition in freight rail service, which is critical to their competitiveness. However, railways are strongly opposed and see it as limiting their profitability and innovation.
In recognition of the critical importance of well-functioning supply chains to the competitiveness of the Canadian grain sector in particular, AAFC and TC jointly fund Canada's Grain Monitoring Program, which has provided ongoing performance monitoring of grain handling system in Western Canada since 2001. The Grain Monitoring Program, delivered by Quorum Corporation, provides critical visibility and trusted data and reporting to farmers, grain companies, and others in the supply chain.
Pesticides in agriculture
Issue
Pesticides are essential tools for the agriculture sector; hence, producers remain concerned that recent Pest Management Regulatory Agency (PMRA) initiatives may further limit their access to varied and innovative pest control products.
Context
Pesticides 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.
A number of PMRA decisions, as Canada's pesticide regulator, have been negatively received by the agricultural sector and provincial-territorial partners. This includes PMRA's proposed fee increase to pesticide manufacturers and its transformation agenda.
AAFC supports science-based decision-making around pesticides and recognizes their importance for the sector and for food security. AAFC does not have any regulatory role when it comes to pesticides, but stakeholders often engage AAFC to help ensure that federal departments/agencies fully consider the impacts on the sector of decisions that could affect the availability of pesticides.
Current status
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 (KMGBF) 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, agricultural ministers agreed to create a federal–provincial–territorial (FPT) working group, to explore the challenges of pesticide management.
The FPT working group presented the report and recommendations to FPT Ministers 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.
Agriculture stakeholders have recently written the Health and Agriculture Ministers to request that the PMRA temporarily halt its activities related to the transformation and proposed fee increase. These requests are due to 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.
Upcoming priorities
Within the context of Canada's 2030 National Nature Strategy, AAFC is working with its co-leads to develop an action plan to implement Target 7 of the KMGBF.
[REDACTED]
AAFC continues to monitor developments in the U.S. The U.S. and Canada have historically been relatively aligned with emphasizing a science-based approach with pesticides, including conducting joint pesticide reviews in the past. However, the recent appointment of a new U.S. Secretary of Health and Human Services may lead to a divergent shift in their policies.
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.
Related programs/initiatives
Pesticide regulation
In Canada, all pesticides must be registered prior to manufacture, import, sale or use. Pre-market evaluations are carried out by Health Canada's 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.
PMRA has published its proposed increases to fees it charges to pesticide manufacturers for re-evaluation activities in Canada Gazette I.
The Canadian Food Inspection Agency (CFIA) monitors domestic and imported food commodities for pesticide residues to ensure their safety.
AAFC's role in pesticides and pest management
Research and development of alternative pest management solutions and support for sector adoption of novel pest control technologies, such as the future use of drones for the application of pesticides.
Facilitating the alignment of Maximum Residue Limits (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.
International trade
Issue
Given that over half of Canadian agricultural production is exported, the sector's continued prosperity relies on its ability to maintain predictable trade, boost exports and diversify in existing and emerging international markets.
Context
In 2024, Canadian exports in agri-food and seafood totalled $100.3 billion, 83% of which was exported to just 5 markets, including 61.4% to the U.S. alone.
The global trade environment is challenging (technological advancements, consumer demands, labour, inflation, geopolitics, etc.), non-tariff barriers continue to increase and there is a growing focus on economic security and protectionism.
Current status
Aligned with broader government objectives to increase and diversify Canadian exports, AAFC continues to urge trading partners to adopt measures and regulations that are based on risk and scientific evidence in accordance with trade agreements and international standards to provide a transparent and predictable trade environment for Canadian exporters.
AAFC works in close collaboration with the Canadian Food Inspection Agency (CFIA) and Global Affairs Canada (GAC), as well as with provinces and industry, to advance Canada's objectives to support the rules-based trading system, gain preferential access, overcome trade barriers, and reach buyers in key international markets.
Upcoming priorities
International trade priorities in agriculture, agri-food and seafood are centred around 3 pillars:
- advancing key market access issues
- diversifying trade
- defending rules-based trade in important markets such as the U.S. and China
Canada's 2025 G7 Presidency provides an opportunity to advocate for the role of science and innovation in the management of agricultural issues.
Related programs/initiatives
Canada's trade agenda
Canada has 15 trade agreements covering 51 countries, and has recently concluded negotiations with Indonesia. The Government is engaged in active free trade negotiations with Ecuador and the Association of South East Asian Nations (ASEAN), as well as the accession of Costa Rica to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with a view to help grow and diversify Canada's trade.
Canada has also announced exploratory FTA discussions with the Philippines.
The Canada-United States-Mexico Agreement (CUSMA) requires a joint review of the agreement in 2026, with certain Canada-U.S. dairy-related provisions in 2025.
[REDACTED]
Key market access issues
The Market Access Secretariat, housed within the joint AAFC-CFIA International Affairs Branch, is dedicated to coordinating agriculture market access activities on behalf of AAFC, the CFIA and GAC, serving as a focal point for a whole-of-government approach to monitor and manage bilateral trade irritants and market access issues, including those caused by non-tariff barriers. Key priorities include:
- European Union: Deforestation regulation; measures on crop imports (pesticides, contaminants, new genomic techniques); veterinary medicinal product regulation; and, animal welfare legislation.
- Indo-Pacific: African Swine Fever zoning agreements with Japan, Philippines, Malaysia and South Korea; reopening access for beef and pet food containing poultry ingredients into China; expanding and maintaining access for beef and pork in the Indo-Pacific; and predictable access for pulses to India.
Market development
AAFC collaborates with other federal departments, provinces, territories and industry to promote the advantages of Canadian agri-food products to both buyers and consumers under the Canada Brand. AAFC also provides Canadian exporters access to important international trade shows, global market intelligence on how to get their products to market and funding through the AgriMarketing program.
Plant breeding innovation
Issue
The Canadian organic sector continues to be concerned with the potential introduction of gene-edited seed varieties into the Canadian agriculture production system, highlighting the ongoing need for enhanced transparency and monitoring to ensure the integrity of the organic certification system and meeting market access requirements.
Context
In Canada, all novel products are subject to a pre-market assessment by Health Canada and the Canadian Food Inspection Agency (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 change, 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.
Current status
AAFC, CFIA, and Health Canada are active in 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 and Seeds Canada's 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.
The AAFC-led Government-Industry Steering Committee on Plant Breeding Innovation Transparency was launched in June 2023. The Steering Committee continues to meet regularly to advance key measures from the Chair's Report, including developing an audit framework, conducting annual surveys, enhancing the oversight and data of the industry-led Canadian Variety Transparency Database, as well as exploring any other options to improve overall awareness and transparency. The Steering Committee has overseen the publishing of an AAFC plant breeding innovation transparency web page and launch of a generic email address to address public enquiries.
The Steering Committee has developed and finalized the transparency survey, which will help gather critical insights to support transparency initiatives.
Upcoming priorities
The Steering Committee is developing a plan to launch the transparency survey in 2025. The committee is also in the process of reviewing the Seeds Canada's Canadian Variety Transparency Database to enhance 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.
Related programs/initiatives
- Transparency - Plant breeding innovation initiative
- Health Canada's list of non-novel products of plant breeding for food use
- Seeds Canada's Canadian Variety Transparency Database
- Chair's Report to the Minister on the Industry-Government Committee on Plant Breeding Innovation Transparency
- 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
Regulatory modernization
Issue
While Canada's agricultural science-based regulatory system is strong, there are opportunities to improve. Stakeholders have pointed to regulatory system challenges associated with complexity, unnecessary administrative burden, and long approval times for new products and technologies as a significant impediment to growth and innovation.
Context
AAFC and its portfolio agencies are responsible for over 280 regulatory instruments, which derive their authority from over a dozen acts. AAFC regulatory instruments are designed to enable the creation of programming and services including assisting producers in managing business risks; supporting marketing of agricultural products; and facilitating competitiveness and trade (see Annex A for list of AAFC regulatory responsibilities).
The sector is highly regulated, with the Canadian Food Inspection Agency (CFIA) and Health Canada being the most prevalent regulators in areas including food and feed safety, novel foods, and labeling. AAFC works closely with regulatory partners on regulatory modernization opportunities, including efforts to ensure the perspectives and realities of the agriculture and agri-food sectors are well understood.
The current regulatory modernization efforts are rooted in the 2019 Agri-Food and Aquaculture Targeted Regulatory Review Roadmap, which lays out a regulatory modernization plan in support of innovation and economic growth in the agri-food and aquaculture sector.
Current status
AAFC's regulatory modernization priorities include a review of the Canada Grain Act and Canadian Grain Commission operations, which included a public consultation culminating in a What We Heard report published on August 13, 2021. AAFC is analyzing stakeholder recommendations to determine next steps.
In response to Roadmap recommendations, AAFC launched the Agile Regulations Table (ART) in 2020, which brings the sector and government together to discuss regulatory priorities and find ways to collaboratively improve and modernize Canada's agricultural regulatory system.
AAFC and partners are pursuing innovative approaches to help address regulatory issues, including: regulatory experimentation and journey mapping to help regulators fill data gaps, streamline approvals, and test new processes.
More broadly, AAFC efforts in regulatory modernization are in the following areas:
- A proposal to modernize the Agricultural Products Marketing Act under Bill S-6, An Act respecting regulatory modernization;
- Health Canada's front-of-package labelling and restrictions on the advertising of certain foods to children, both intended to improve food choices as part of the Healthy Eating Strategy; and CFIA's "Food Product Innovation" initiative, intended to create a more streamlined and agile food labelling framework;
- Work with CFIA and federal-provincial-territorial (FPT) partners to modernize regulations, notably through the launch of domestic meat trade pilot projects which aim to address internal trade challenges while protecting Canada's food system and without compromising international trade agreements and market access opportunities;
- Health Canada and CFIA's work on the comprehensive "Part B Food Regulatory Modernization Project", which will result in a more agile framework that can adapt to new science, industry innovation and emerging health risks; and,
- Environment and Climate Change Canada (ECCC) proposed regulations intended to address Canada's zero plastic waste agenda.
Upcoming priorities
Although there is significant interest in regulatory innovation and modernization, key constraints exist regarding limited capacity and challenges with the completion of prioritized initiatives. Given many of the regulatory modernization opportunities raised by the sector fall under the mandate of other departments, regular and ongoing engagement with federal partners remains important.
AAFC continues to prioritize regulatory agility including by pursuing more regulatory experimentation opportunities, building on the success of the ART and work with regulators and industry stakeholders to continue to advance its regulatory modernization agenda.
Related programs/initiatives
AAFC is supportive of Budget 2024's intent to amend the Red Tape Reduction Act (RTRA) to enable regulatory sandboxes, which AAFC can use to test novel projects and regulatory approaches. Each Minister will have the authority to pursue a sandbox which could further support overall regulatory agility and modernization efforts for the sector.
The FPT Domestic Food Trade Working Group, reporting under the FPT Food Safety Committee, was launched in 2021 to enhance government leadership and partnership in support of the Canadian Free Trade Agreement objective to reduce barriers to the free movement of goods and services in the agri-food sector. Advancing internal trade is also a priority outlined in Budget 2024 and AAFC is actively involved on this file.
Annex A — Agriculture and Agri-Food Canada's regulatory responsibilities
The Canadian Agriculture Loans Act and the Agricultural Marketing Programs Act grant ministerial authority to provide various loan guarantee programs and advances to producers and farmers.
The Farm Income Protection Act provides authority to facilitate business risk management programs (including income stabilization for farmers, disaster assistance and crop insurance).
The Canada Grain Act outlines the authorities of the Canadian Grain Commission (an AAFC portfolio partner), establishes regulations that govern quality standards for Canadian grain, and regulates grain handling to ensure a dependable commodity for domestic and export markets.
The Agricultural Products Marketing Act allows the delegation of federal authority to provincial commodity boards to regulate the marketing of a commodity destined for interprovincial or export trade to the same extent as it does for intra provincial trade.
The Farm Products Agencies Act authorizes the establishment of agencies with powers relating to the marketing of a farm product destined for interprovincial or export trade (for example, Pork Proclamation).
The Canadian Pari-Mutuel Agency maintains the regulatory framework of laws, regulations, regulatory documents, licences and authorizations to govern and ensure the integrity of pari-mutuel betting systems in Canada.
The Certificates of Age and Origin for Distilled Spirits Produced or Packaged in Canada Order fulfills Canada's international trade commitments as certain trading partners require, as a condition to the importation of distilled spirits from Canada, that the distilled spirits be accompanied by a certificate issued by a duly authorized official of the Government of Canada attesting to the age and origin of the distilled spirits.
The Spirits Drinks Trade Act respects the implementation of international trade commitments by Canada regarding spirit drinks of foreign countries and recognizes that the use of certain spirit drink names is exclusive to their country of origin.
Asset reduction and land divestitures
Issue
AAFC’s land divestitures are managed in alignment with TB policy requirements as per the Directive on the Management of Real Property.
Context
AAFC must hold and use real property to support its science and program objectives. AAFC takes a proactive departmental planning approach with internal tools, guidelines and processes, rather than a transactional approach to the disposal of real property.
TB policy and various Government of Canada initiatives are drivers that are taken into consideration in the management of the Department's real property portfolio and specifically on surplus real property. These include the Horizontal Fixed Asset Review (HFAR) and broader Government of Canada priorities (Housing Initiative and Indigenous Reconciliation).
AAFC also demolishes buildings and structures that no longer have a program use or have sustained damage. These structures range from small storage sheds to larger research buildings and aging greenhouses.
Current status
AAFC engages Public Services and Procurement Canada (PSPC) to support active divestiture of federal real property. [REDACTED]
AAFC also has the Water Infrastructure Divestiture and Community Pastures Program. The Department had historically developed dams, irrigation systems and canals with community pastures as systems to support livestock producers in Saskatchewan and Manitoba. These assets are no longer required to support program needs, and all assets (including pasture lands) are in the process of divestiture.
[REDACTED]
Upcoming priorities
The department has developed its Real Property Portfolio Strategy (RPPS), as per TB's mandate to custodians who are required to develop, implement and monitor a long-term real property portfolio strategy. The RPPS will ensure that AAFC's real property portfolio and asset-level investment decisions are made in alignment to advance AAFC's mission-driven science priorities as identified in the department's Strategic Plan for Science.
The Surplus Real Property Guidelines incorporate a utilization review and inventory that will assess what lands are under-utilized or not used, which could then be declared surplus. The utilization review exercise was recently launched and the results of the review are expected in Quarter 2 of fiscal year 2025–26.
Related programs/initiatives
AAFC's divestitures will continue to align with TB policy and broader Government of Canada priorities, including the National Housing Initiative.
The RPPS will ensure the long-term vision of the portfolio continues to support AAFC's Strategic Plan for Science.
Wine sector support
Issue
- Updates on the Wine Sector Support Program (WSSP).
Context
The WSSP began in 2022 as a 2-year, up to $166.2 million program providing short-term financial support to help licensed Canadian wineries adapt to ongoing and emerging challenges impacting their financial resilience and competitiveness, such as the repeal of the excise duty exemption that stemmed from a 2018 World Trade Organization (WTO) case with Australia.
To ensure continued support for the sector, on March 1, 2024, the Government of Canada announced an extension to the WSSP, investing up to an additional $177 million over the next 3 years (2024-2025 to 2026-2027).
The Program provides non-repayable grant payments to licensed Canadian wineries based on their production of bulk wine fermented in Canada from domestic and/or imported primary agricultural products.
Current status
In 2024-25, 478 applications, representing 71.3 million litres of wine produced in Canada, were approved under WSSP for a total of $55 million in grant funding, which has almost all been paid out to wine producers across Canada.
In recent months there has been a number of discussions with industry around 2 key issues: 1) the eligibility of imported grapes/juice under the WSSP; and 2) the potential to develop a national wine strategy, beyond the scope of the WSSP, along the lines of the Government's EV strategy.
AAFC officials, with input from Wine Growers of Canada, have added clarity to the program's guidelines around the eligibility of imported grapes (and other imported agricultural products used in wine), as opposed to grapes that have been processed into juice before importation, under the WSSP.
The clarification will be applied in the 2026-27 program year on wine produced between April 1, 2025, and March 31, 2026. The clarification was made public on the WSSP webpage on March 3, 2025.
Upcoming priorities
The 2025-26 application intake period for the WSSP opened on March 3, 2025, and will close on May 23, 2025. Assessments will begin as soon as applications are received. For 2025-26, $55 million in grant funding is available through the WSSP for wine producers across Canada.
In the short-to-medium term, the Department will need to work with other government departments (for example, Privy Council Office, Finance Canada, Innovation, Science and Economic Development Canada, and Global Affairs Canada) on options for the expiration of the extended WSSP.
Modernization of the Canada Grain Act
Issue
The Canada Grain Act (CGA) provides a framework to ensure that grain exports are of a consistent, dependable quality and producers are protected in their interactions with grain companies. The CGA has not been comprehensively updated since 1971.
Context
CGA modernization is a longstanding need that has been identified as a priority by successive governments.
- Budget 2019 highlighted the review of the CGA as part of its proposal to introduce Regulatory Roadmaps.
- The 2021 mandate letter for the Minister of Agriculture and Agri-Food, committed to "continue to explore next steps to modernize the Canada Grain Act and ensure it meets the needs of the sector now and in the future".
On January 12, 2021, consultations for the review of the CGA were announced. Feedback from stakeholders was gathered through 66 submissions, a public Town Hall, and 3 stakeholder roundtables. Topics discussed included alternative service delivery, producer protections, governance, export sales reporting, and licensing.
A "What We Heard" report was published on August 13, 2021 (What We Heard: Canada Grain Act Review Consultations).
Current status
On March 26, 2024, the Agricultural Producers' Association of Saskatchewan hosted a Canada Grain Act Summit in Saskatoon with participation by select stakeholders, who reiterated many of the same concerns and suggestions from the 2021 consultations.
Upcoming priorities
The Government continues to consider potential paths forward with respect to CGA modernization, taking into account feedback received from stakeholders during and after consultations.

Book 3 — Sector overview and key file backgrounders: minister's transition book 2025, AAFC

Table of Contents

Canadian agriculture and agri-food system

Primary agriculture

Most Canadian producers have seen solid growth over the past decade

Food and beverage processing

Wholesalers, food retail and foodservice

The Canadian food retail sector is highly concentrated

Foodservice sales have been impacted by COVID-19 in recent years

Food price inflation outpaced overall inflation in 2023

Positioning the system for sustainable economic growth

Canada remains a competitive global force — strong and growing

Snapshot of the sector

The agriculture and agri-food system

Primary agriculture

Food and beverage processing

Food retail and wholesale

Foodservice

Inputs and service suppliers

Primary agriculture

Farm market receipts (billion $)

Food and beverage processing

Main industries

Snapshot of sector commodity breakdown

Crop production

Principal field crops

Key crop production stakeholders

Horticulture

Key horticulture stakeholders

Animal production (including aquaculture)

Key animal production stakeholders

Food processing and beverage production

Key food and beverage stakeholders

Top 3 crop and livestock commodities by average 2019-2023 farm cash receipts

Snapshot of agricultural trade and market access

Trade at a glance

Canada's position in the world

Supporting trade

Free trade agreements

Snapshot of programs

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

Science, research and innovation

Building sector capacity, growth and competitiveness

Market development and trade

Resiliency and public trust

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

Business risk management (BRM) programs

Risk management programs (outside Sustainable CAP programming)

Innovation programs

Supply management programs

Environment programs

Food programs

Other programs

Snapshot of science and research capacity

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

Mission-driven science

People first strategy

Organizational effectiveness

Four key science missions

Science expertise is leveraged to support policy and programs development and implementation

Sustainable Canadian Agricultural Partnership (2023 to 2028)

Supporting Indigenous-led agricultural research

Highlights of scientific accomplishments

Mission: Mitigating and adapting to climate change

Mission: Accelerating the digital transformation of the agriculture and agri-food sector

Mission: Increasing the resiliency of agro-ecosystems

Mission: Advancing the circular economy by developing value-added opportunities

Snapshot of sector diversity, equity and inclusion

Mainstream efforts to support underrepresented and marginalized groups in the sector

Some of AAFC's targeted sector-facing programs and services to support underrepresented and marginalized groups in the sector

Inter-departmental collaboration

Diversity, equity and inclusion and the Sustainable Canadian Agricultural Partnership and other programs

Agriculture and Agri-Food Canada's farm income forecast

Background

Highlights of key results

2023 (Statistics Canada data)

2024 and 2025 (AAFC forecast)

Considerations

Supply management

Issue