The Canadian government has introduced a first-of-its-kind National Food Strategy explicitly designed to declare greater independence from foreign food suppliers and scale domestic agricultural self-sufficiency.
Currently, Canada relies on foreign imports for 88% of the fresh fruits and nuts consumed and 72% of vegetables, with the U.S. supplying roughly 40% of those commodities. Fresh produce accounts for about 15% of average grocery spending by Canadians.
This new National Food Security strategy will address rising food prices and global geopolitical developments that compound these domestic food challenges.
This strategy outlines several goals, including expanding market choices, increasing retail options for consumers, reducing dependence on foreign technology and inputs and promoting domestic produce on store shelves. Officials say these changes will help farmers sell produce closer to home and accelerate the rollout of new innovations. The policy also aims to help independent grocers bypass massive corporate wholesalers that complicate their ability to compete with dominant retail chains.
The U.S. Trade Relationship
Canada is the world’s 11th largest importer of agricultural products and agri-food, with the U.S. accounting for more than 61% of Canada’s exports and nearly half of the country’s imports. According to federal documents, about half of all Canadian food imports and inputs come through the U.S. and when the U.S. lodges tariffs on other countries, Canadian food importers pay additional costs passed on to the consumer.
The Canadian government says the strategy is to establish a new economic relationship with the U.S. and strengthen collaboration with trading partners around the world.
Based on Canadian agricultural officials’ preliminary estimates from 2022 data, for every dollar that Canadians spent on domestically produced food in 2022, about 23 cents went to food processors, about 16 cents went to food retailers, and about 11 cents went to Canadian farmers. Also, transportation accounts for a higher share of consumer food spending in Canada, at 7%, compared to 4.6% in the U.S.
Addressing Grocery Monopolies
Canada also says that the lack of competition in its food supply chain has directly impacted small and medium businesses and has led to spikes in prices.
A 2023 market study by Canada’s federal Competition Bureau revealed that 15 major mergers since 1986 consolidated the market from eight major grocery retailers down to just five. Today, those top five retailers, Loblaw, Metro, Empire (Sobeys), Walmart, and Costco, control roughly 75% of national grocery sales.
The Canadian Competition Bureau’s Grocery Market Study Report flagged property controls as a barrier that can reduce competition and make it harder for new grocery stores to open.
The Canadian government also says that during public consultations, stakeholders have noted that the lack of competition was particularly concerning in markets such as fertilizers and wholesale grocery distribution.
A $750 Million Push for Indoor Growing
To combat this, the federal government has announced a $750 million investment over seven years into a Controlled Environment Agriculture (CEA) Growth Pathway to advance CEA technology adoption ($650 million) and expand local production in rural and northern communities ($100 million).
The Canadian government says that Ontario leads the greenhouse vegetable sector, representing 72% of the country’s total production, followed by British Columbia (13%) and Quebec (9%), while other provinces total about 6%.
Canada says that in 2024, a total of 974 commercial greenhouse vegetable operations produced more than 1.9 billion pounds (866,484 metric tons) of vegetables and generated $2.7 billion in sales.
Canada says this CEA Technology Adoption Stream will support growers in adopting automation, robotics, lighting and digital growing tools to reduce energy and operating costs and includes upgrades to existing facilities and new builds. The Canadian government says this investment will ensure growers have systems to grow a broad range of produce and scale.
And while currently, cucumber, tomatoes and peppers account for about 96% of Canadian greenhouse production, it identifies strawberry production as a prime growth target. Canadian strawberry yields nearly tripled from 5.5 million pounds (2.5 million kg) in 2020 to over 16.5 million pounds (7.5 million kg) in 2024, valued at $75.2 million.
Canada says nearly 71% of greenhouse-grown production goes to the U.S. but says domestically produced healthy food is expected to increase from 75% to 85% by 2032, according to Canada’s Food Guide.
The Canadian government says this investment in CEA will also double its production value sold to the Canadian market from $774 million to $1.55 billion by 2032.
This investment will also reduce Canadian dependence on imported crops grown in CEA by 20% by 2032 and will reduce labor and energy costs by 10% to 20% also by 2032.
Industry Reaction
The Ontario Greenhouse Vegetable Growers Association calls the new strategy a transformative and generational commitment to strengthening Canada’s domestic food system. The organization says this strategy, backed by more than $3.2 billion in investments over 10 years in a larger macro package, will enhance food security and increase affordability while supporting economic growth.
“This is a significant and forward-looking investment that will directly benefit greenhouse growers across Ontario and Canada,” Richard Lee, executive director of Ontario Greenhouse Vegetable Growers, says in a statement. “The Strategy acknowledges the essential role our sector plays in producing fresh, nutritious, safe vegetables year-round, while reinforcing Canada’s position as a global leader in greenhouse vegetable production, reducing reliance on imports and strengthening supply chains.”
Lee points to the $750 million commitment to controlled environmental agriculture which will help the industry continue to invest in the future and expand production capacity.
“With the support outlined in this Strategy, the greenhouse sector will be able to grow more food, more efficiently, and at a lower cost,” Lee says. “This benefits not only our farmers, but also Canadian families who are looking for affordable, locally grown food options, year-round.”
Ron Lemaire, president of the Canadian Produce Marketing Association and the organization’s Senior Director of Canadian Government Relations and Industry Technology, Shannon Sommerauer, joined Canadian Prime Minister Mark Carney and Federal Agriculture Minister Heath MacDonald to announce this strategy at the Ontario Food Terminal.
Lemaire called it the “highest investment in the fresh produce sector in recent history.
“The National Food Security Strategy will help fuel a sector that is not only a significant economic engine but is also critical to the health and well-being of Canadians,” Lemaire says.
Lemaire says the measure reflects recommendations made by CPMA through the organization’s advocacy efforts.
“In this time of trade and geopolitical volatility, it has never been more important for the Canadian government to prioritize agriculture and food production as a strategic cornerstone of our Build Canada strategy,” says Lemaire.
