By Michael Graydon, CEO, Food, Health & Consumer Products of Canada
Canada is searching for a path back to stronger productivity, more resilient supply chains, and a more competitive economy. Yet one of the most powerful levers for achieving all three remains almost entirely overlooked in the national conversation.
Canada’s food, health, and consumer products manufacturing sector is the country’s largest manufacturing employer. It rivals the scale of sectors that receive far more political and policy attention, yet it operates in more regions of the country and is woven directly into the daily lives of Canadians. It anchors rural communities, supports immigrant entrepreneurship, and produces most of the goods families use every day.
Still, despite this reach and relevance, the sector is rarely treated as a strategic economic asset. That is a missed opportunity at a moment when Canada can least afford to miss any.
Today, more than half of the products in the centre aisles of grocery stores are imported, even though many were once made in Canada. The capacity exists here, the talent exists here, and the market certainly exists here. What is missing is the environment that allows firms to expand, modernize, and compete at scale. For two decades, a combination of cost pressures, regulatory misalignment, and slow approvals has pushed investment south. The result is not a crisis we can see, but a slow erosion that is becoming harder to reverse with each passing year.
If Canada is serious about diversifying trade, increasing domestic manufacturing, and improving productivity, then value-added agrifood and consumer goods manufacturing must be at the centre of the strategy. Exporting raw agricultural products alone will not double non-U.S. exports. The real opportunity lies in processing, innovation, and advanced manufacturing that build on Canada’s natural strengths.
Rebuilding this capacity would deliver immediate returns: more diverse exports, more resilient supply chains, stronger regional economies, reduced exposure to global shocks, and more intellectual property and innovation anchored in Canada. Few sectors offer this mix of economic and strategic upside.
To unlock this potential, Canada does not need new subsidies or major new spending. It needs structural modernization.
First, Canada needs a national agrifood value strategy. Unlike other agrifood powers, our value chain is fractured across multiple departments, with no single place where competitiveness and growth are coordinated. Aligning Agriculture and Agri-Food Canada, Innovation, Science and Economic Development, Health Canada, Environment and Climate Change Canada, and Global Affairs Canada under a shared industrial objective would be transformative.
Second, Canada needs regulatory systems that keep pace with modern manufacturing. That means aligning with trusted jurisdictions, reducing duplication between federal and provincial reporting, and modernizing data and labelling rules. These steps alone would unlock immediate investment with no added cost to government.
Third, supply-chain infrastructure must be treated as strategic. Congested ports, limited rail flexibility, and outdated inspection systems do not just slow goods. They reduce investor confidence that Canada can deliver reliably at scale.
Finally, we need tax policy that encourages firms to scale, not stay small. Budget 2025 took important steps with the Productivity Super Deduction and improvements to Capital Cost Allowance rules. These changes help level the playing field with the United States. But to truly energize mid-sized manufacturers, Canada should introduce a nationwide manufacturing investment tax credit, modernize the Science Research and Experimental Development program, and implement a federal patent box regime that encourages commercialization here at home.
The good news is that Canada has everything it needs to succeed. We have world-class agricultural production, abundant water, global leadership in potash, deep expertise in food safety, and a diverse and innovative consumer market. What we need now is an industrial strategy that connects these advantages to the manufacturing capacity that converts them into high-value exports.
The path to a more competitive Canada runs straight through value-added agrifood and consumer goods manufacturing. It is the country’s most underleveraged economic asset, and the opportunity it represents is larger and more certain than many of the strategies dominating today’s policy debate.
Canada can once again become a nation that builds things and feeds the world. We simply need to treat this sector with the same strategic seriousness we apply to others that are far smaller but far louder.
Michael Graydon is CEO of Food, Health & Consumer Products of Canada.
