Experts believe U.S. tariffs could drive Canada to enhance its food production capabilities
Toronto: Experts are saying that U.S. tariffs on Canadian goods might actually push Canada to boost its own food processing and manufacturing. Some companies are even thinking about moving their operations to the U.S., but there’s a catch. They believe that for real change to happen, the government needs to step up and provide more support.
Michael Graydon, the CEO of Food, Health and Consumer Products of Canada, pointed out that without a solid manufacturing strategy for food, Canada will just keep trying to incentivize businesses without a clear plan. With the incoming U.S. president threatening high tariffs, there’s a lot of concern about how this could impact Canadian agriculture and food companies.
Canada has been relying more on imported food products over the years, which has hurt its food processing and manufacturing capacity. But after the supply chain issues during the COVID-19 pandemic, there’s a renewed interest in becoming more self-sufficient.
Interestingly, Canada usually exports more food to the U.S. than it imports, but there are still some products, like fruits and processed foods, where Canada is heavily dependent on imports. Experts think these areas are prime for boosting domestic production.
There’s a mix of factors driving interest in investing back into local operations. Technology is one of them, as Canada now has better tools to grow fresh produce all year round. Plus, with all the supply chain disruptions and geopolitical tensions, more companies are considering moving operations closer to home.
Roderick MacRae, a retired professor, believes there’s a significant shift happening that emphasizes the need to strengthen Canada’s food system. Recent investments in Canadian facilities, like a new soy processing plant in Ontario and Hershey returning to its old site, show that there’s movement in the right direction.
However, building up domestic capacity isn’t a walk in the park. Graydon mentioned that these projects are costly and take years to complete, so they really need government backing to make a real difference.
In sectors where Canada has a trade surplus with the U.S., the uncertainty from tariffs might make companies hesitant to invest further in Canada. McCann noted that while companies might hold off on expanding, they’re not likely to pack up and move just yet. But if tariffs stay high for a long time, that could change.
McCann believes the government should be doing more to support businesses at risk of relocating to the U.S. Several business groups have urged the government to help Canadian firms deal with the potential fallout from tariffs. Dennis Darby, president of Canadian Manufacturers and Exporters, expressed concern that businesses are already pausing their investment plans due to uncertainty.
MacRae added that while Canadian companies are worried about Trump’s promises, they’re not likely to make any rash decisions. It would be unwise to make major changes based solely on political statements.
This report by The Canadian Press was first published on January 17, 2025.
