Canola Outlook Brightens as Trade Barriers Ease, but Risks Remain

After a bruising year of tariffs, trade disruptions and policy uncertainty, the outlook for Canada’s canola sector is turning cautiously more optimistic heading into 2026, even as the industry remains exposed to geopolitical risk and shifting export demand, says Export Development Canada.  

Canada’s canola trade was hit hard in 2025 after China reimposed major barriers on Canadian agricultural goods. On March 20, 2025, China placed 100% tariffs on Canadian canola oil and meal, along with peas, and later added a 75.8% anti-dumping tariff on Canadian canola seed effective Aug. 14. The measures sharply disrupted trade with one of Canada’s most important customers and sent Saskatchewan benchmark canola prices down nearly 9%.  

The blow was especially severe because it came just as trade conditions had begun to recover from earlier tensions, wrote Prince Owusu, Senior Economist, Economic and Political Intelligence Centre, in the EDC TradeInsights article. 

Canadian canola product exports to China had climbed to a record 7.9 million tonnes in 2024, but the renewed tariffs reversed that momentum. In 2025, Canadian canola exports to China fell 62%, while shipments to the U.S. declined 9%, hurt in part by uncertainty surrounding U.S. biofuel policy and weaker demand for renewable diesel feedstocks. Total Canadian canola export volumes fell 7.4% for the year.