RBC report warns Canada could fall to ninth place in agri-food exports by 2035 without trade expansion
Canada’s agri-food exports have quadrupled in value to over $100bn, largely due to its trade partnership with the United States, according to Financial Post.
However, a new report by the Royal Bank of Canada (RBC) highlights that this reliance has come at the cost of Canada's global competitiveness.
The report warns that without corrective action, Canada’s position in global agri-food trade could slip further in the coming years.
Until the early 2000s, Canada ranked fifth among global agri-food exporters. Today, it has fallen to seventh place, trailing China and Brazil, and could drop to ninth by 2035 if current trends continue.
RBC suggests that with the right investments and trade strategies, Canada could regain market share and improve its global standing.
“We are really heavily reliant on one trading partner, and the current relationship (with the US) leaves us very vulnerable, in terms of what that means for the sector and for the sector’s growth,” said Lisa Ashton, one of the report’s authors.
Currently, more than 60 percent of Canada’s agriculture and agri-food exports go to the US, while the US supplies 20 percent of Canada’s agriculture and agri-food imports.
Over the past two decades, Canada has significantly increased investment in agri-food processing, further deepening its reliance on the US market.
Ashton emphasized that while Canada should not move away from its primary trading relationship with the US, it must seek to strengthen it while also pursuing diversification in other markets.
“Walking away from that partnership would take years and years to untangle and will be very costly for both countries,” she said.
“In terms of strengthening, I think it really comes down to building upon those relationships that we have with the US, (whom) we have a deeply integrated supply chain with,” said Ashton.
According to RBC, Canada has the potential to increase its global agri-food market share from 3.7 percent to 4.8 percent and reclaim its fifth-place position among top agricultural exporters.
Modelling conducted by RBC and the Boston Consulting Group’s Centre for Canada’s Future suggests that a 30 percent expansion in global exports could generate an additional $44bn by 2035.
RBC’s report outlines three key strategies to boost Canada’s global agri-food presence:
- Strengthening market access in existing regions – Canada should enhance trade with established partners in Europe, Asia, and Latin America.
- Expanding into high-growth economies – Nations in South and Southeast Asia, Africa, Latin America, and the Middle East present opportunities as their GDP per capita rises.
- Maintaining relationships through 'food diplomacy' – Canada should position itself as a stable and strategic trade partner, particularly for countries expected to face food trade deficits in the next decade, including the US, China, and Japan.
The report also suggests Canada diversify its exports into high-growth markets such as India, Indonesia, and the Philippines.
By focusing on specialized products like vegetable and canola oil, prepared cereals, and meat, and leveraging existing trade agreements with Europe, Canada could secure lower tariffs on key exports, including seafood and fish.
With increasing global competition and the threat of US tariffs under President Donald Trump, RBC's report stresses that Canada must act now to secure its place in the evolving global agri-food market.
