Investment, innovation, and trade expansion key to unlocking billions in economic growth for Canada’s largest manufacturing employer.
Canada’s food and beverage manufacturing sector could deliver a major economic boost over the next decade, but only if productivity growth accelerates, according to a new report from Farm Credit Canada (FCC).
The report, Prospects for Future Productivity Growth in Canadian Food and Beverage Manufacturing, outlines how achieving three per cent annual GDP growth could add up to $40 billion to the national economy.
It also projects the creation of approximately 217,000 new jobs, $16 billion in wages and benefits, and $1.3 billion in additional tax revenue.
As the largest manufacturing employer in the country, the sector currently includes more than 8,800 businesses and employs roughly 318,000 Canadians, making its future performance critical to both rural and national economic health.
Productivity Remains the Key Challenge
Despite its size and resilience, the sector has faced headwinds in recent years. FCC reports that labour productivity declined by an average of 0.5 per cent annually between 2015 and 2022, raising concerns about long-term competitiveness in global markets.
“Productivity growth is essential to ensuring that the Canadian food and beverage manufacturing sector remains competitive globally,” said Craig Klemmer, manager of Thought Leadership at FCC. “But it does not operate in isolation. Success depends on a broader ecosystem of investment, skilled labour and strong global market access.”
The report emphasizes that improving productivity is not just about economic gains. It is also central to ensuring food security, sustainability, and affordability for Canadian consumers.
Four Strategic Pathways to Growth
FCC identifies four priority areas that will be essential to reversing productivity declines and unlocking future growth:
- Capital investment: Upgrading and expanding plants and equipment to improve efficiency and output.
- Skills development: Training workers to keep pace with technological advancements across manufacturing processes.
- Regulatory efficiency: Streamlining regulations to reduce business burdens while maintaining public safety and trust.
- Trade expansion: Strengthening access to global markets to drive innovation and scale opportunities.
Together, these factors form what FCC describes as an interconnected system needed to support long-term competitiveness.
Building on Canada’s Strong Foundation
While challenges remain, FCC maintains that Canada is well-positioned to capitalize on future opportunities. The country’s established agri-food sector, access to global markets, and reputation for high-quality production provide a solid base for growth.
“Canada has a strong foundation to build on,” said Klemmer. “With the right attention and support, the food and beverage manufacturing sector can continue to be an economic powerhouse and a leader in the global food system.”
However, translating that potential into measurable gains will require coordinated action across industry, government, and investors.
Investment Momentum Already Underway
To help accelerate innovation and productivity, FCC has already taken steps to mobilize capital across the agri-food value chain. Earlier this year, the organization convened a coalition of more than 20 investment groups that have collectively committed up to $7 billion toward Canadian agriculture and food innovation by 2030.
Through FCC Capital, those funds are being directed toward companies developing technologies and solutions designed to improve efficiency, sustainability, and productivity across the sector.
These investments are expected to have a ripple effect, supporting producers, processors, and supply chains as they adapt to evolving market demands and environmental pressures.
A Critical Decade Ahead
The coming decade is shaping up to be a defining period for Canada’s food and beverage manufacturing industry. With global demand for food continuing to rise, the ability to produce more efficiently will determine whether Canada strengthens or loses its competitive position.
The FCC report concludes that unlocking productivity gains is not optional but essential. Without sustained improvements, the sector risks falling behind international competitors. With the right strategies in place, however, it has the potential to deliver significant economic, social, and environmental benefits.
For Canadian agriculture and food stakeholders, the message is clear: investment, innovation, and collaboration will be the driving forces behind the sector’s next phase of growth.
Photo Credit: FCC Thought Leadership & CAPI