It’s time to seize our $30 Billion Opportunity
Two things can be true at the same time.
The world is facing a serious food crisis, and Canada has a $30 billion opportunity to help solve it.
I won’t spend too much time on statistics – we all know Canadian productivity has flat-lined and we’re lagging behind other countries, especially the US.
Agriculture productivity is growing every year, but at a much slower pace than it was decades ago. FCC Chief Economist JP Gervais is the numbers guy, and on a recent panel at Canada’s Productivity Summit, he broke it down.
At our current production levels, agriculture cannot grow enough food to feed the global population, which is expected to be 9 billion people by 2030.
“The status quo is not going to solve it,” said Gervais, plain and simple. We must produce more.
As a global powerhouse in agriculture, we produce safe, nutritious, and high-quality food, and we should be producing more.
In the 1980s, productivity grew by about 2% a year, in the 90s it declined to about 1.5% and from 2020 – 2030, our productivity is expected to drop to between .5 – .7% per year.
If we can bring productivity back to 2% a year—and the key word is “if”—it represents a $30 billion opportunity for Canada. Three billion a year (or 3% of gross income) in an industry that is capital intensive, high risk, and traditionally low on assets means 3% is a big deal.
The bottom line is that things need to change. We must increase productivity, and there is no shortage of ideas on how Canada can overcome this challenge. The Productivity Summit brought together experts from all sectors of the economy, including Natural Resources, Construction, Manufacturing, Telecommunications, and Agriculture. It was great to finally see Agriculture included in these important discussions about Canada’s economy.
Where does Canada rank?
Globally, the US economy is on fire. Post-pandemic, its recovery has been even stronger than many experts would have predicted, and a lot of that is due to the Inflation Reduction Act, which has boosted investment in the economy in areas of energy security and climate.
China, Mexico and Canada are all experiencing much slower growth. In Canada and Mexico, our biggest risk right now is the USMCA (United States-Mexico-Canada) Trade Agreement and what could happen if it gets renegotiated in 2026. Will the new President continue with the current government’s increasingly protectionist agenda, putting up barriers between these three countries? If he or she does, Canada will suffer.
What about Agriculture?
“Bold decisions may lose votes, but courageous decisions may lose an election.”
I think journalist Andrew Coyne said that line and it applies not only to politicians and government but also to our industry. We need to find a way to start making bold decisions if we really want to see meaningful changes in productivity levels.
As part of the agriculture panel, we discussed the huge potential for our industry to contribute to national productivity. We are a country with a relatively predictable climate, plenty of water, and a huge land mass. We can have a front-row seat to help close the global “food gap” and we should loudly and proudly celebrate the fact that we can help.
So, how do we make this happen? There are no easy answers, but the panel certainly had some ideas. I will cover that in my next post.