FROM POTENTIAL TO PROOF
HOW CANADA’S AGRI-FOOD SECTOR CAN DELIVER FOR THE NATIONAL INTEREST
Somewhere in the annexes to Washington’s new 338 tariff proclamations sits the hockey stick. From August 19th a Canadian-made stick heading to the U.S. will carry an extra 50%. Seeds, bulbs and cut flowers (among many other items) appear on the list too. Potash, oil, gas and critical minerals do not.
Unlike previous iterations, CUSMA/USMCA exemptions offer no shield. Washington has dialled up the pressure, and the coming months will bring a high-stakes negotiation with real consequences for Canadian prosperity. Longer term, the case for strategic optionality and resilience is reinforced once again.
Our last brief, on the Halifax Statement, closed with a challenge: Canada's agri-food sector has won the argument for strategic status in the form of the National Food Security Strategy and the Halifax Statement’s economic framing aligns to the broader economic imperatives. However, the claim remains asserted rather than demonstrated. Recent events have only sharpened that challenge and the imperative.
How does Canada’s agri-food sector meet this moment and demonstrate that its potential can become reality? To paraphrase a worn cliché, it begins with different thinking that at first hearing might even seem slightly peculiar. Most audacious projects sound unconventional in the beginning, and this moment demands such audacity. To that end, here are two perhaps unusual ideas to help illustrate the point. Both are technically feasible and have real commercial possibilities, and both require different thinking and action to turn them into reality.
UNCONVENTIONAL IDEA ONE: EASTERN CANADIAN GREEN FERTILIZER INFRASTRUCTURE
The closure of the Strait of Hormuz on February 28th put roughly one-third of global seaborne fertilizer trade at risk. By April, world urea (nitrogen fertilizer) prices had climbed some 80 per cent in two months and the World Bank's fertilizer index stood at its highest level since October 2022. Canadian farm input costs are, it turns out, sensitive to global events. The question being asked in policy circles (and not for the first time) is a logical one: should Canada build additional domestic fertilizer capacity? Past answers to this question were – “no”; because synthetic fertilizer production is primarily a cheap energy industry and there is no business case that survives some future where oil and gas prices return to something resembling an historical normal. Any possible “yes” answer therefore requires a robust business case that works whether there is an energy crisis or not. The crisis is, however, useful to sharpen minds.
There is another way to think about getting to “yes”. Atlantic Canada holds one of the Western Hemisphere's most advanced low-carbon ammonia projects: Point Tupper in Nova Scotia is the first large-scale green hydrogen-to-ammonia[1] facility in North America to complete front-end engineering. What it lacks is a binding customer. Its German offtake interest has yet to convert intent into contract and plant construction has slipped. Final investment decisions remain out of reach.
Here is the unconventional idea: build a green fertilizer production industry on top of Atlantic Canada’s emerging low carbon ammonia infrastructure. The novelty is for eastern and central Canadian agriculture to become another anchor customer, adding incrementally to the economics of the business model. It would take a structured commitment to source a defined share of Ontario and Quebec's agricultural nitrogen demand from certified Atlantic production, with the green premium bridged through carbon-credit monetisation or preferential access to carbon-sensitive markets such as the EU. That would hedge against the next Hormuz and give the Atlantic project additional demand certainty its financing has been waiting on. It would also create agriculture business-oriented production incentives at the very moment diversification away from the U.S. market has stopped being a slogan and, almost in passing, stand up a domestic strategic industry. But no company can convene it on its own, and no province owns all of it; the deal exists only if a government assembles it. That, more than anything, is what is required to make such an idea happen.
UNCONVENTIONAL IDEA TWO: BUILD THE MACHINES HERE, NOT JUST THE PRODUCTS
The second idea requires no geopolitical shock to justify, only a walk through a greenhouse in B.C. or Ontario. Controlled-environment agriculture is, by any honest description, an advanced manufacturing sector. Yet nearly every piece of the automation stack that runs it; the climate-control computers, the irrigation intelligence, or the robotics, is designed and sold by largely European technology firms. Those foreign firms are selling into Canada (and around the world) what could be built here. A country facing 50% tariffs on its manufactured exports has just been handed every reason to own more of its technology base.
The gap in turning this possibility into reality is not one of capability. Ontario's automotive supply chain, for example, has spent decades mastering exactly the competencies greenhouse automation requires; precision robotics, machine vision, climate systems and integrated controls. Domestic manufacturers are actively hunting for adjacent markets as the automotive transition compresses margins. Linamar already treats agricultural technology as a peer engineering domain, not a side project. The Netherlands and Germany built substantial export industries on precisely this foundation; dominate the home market's technology layer, then sell the systems to the world. Canada has the industry, the engineers, and the anchor customers across the agri-food sector. What it needs now is for government’s convening gravitas to drive the relationships necessary with the same clarity it has applied to electric vehicles and batteries.
HOW?
What the two unconventional ideas share is that neither requires government to be the financier of first resort. The fertilizer corridor needs demand aggregation and a well-designed carbon-credit framework; instruments not cheques. The advanced manufacturing play needs strategic priority and the investment-attraction playbook that landed southern Ontario’s battery corridor; signal more than a subsidy. In both cases a core constraint is a coordination problem that no individual firm, industry association or government ministry can solve, because the value is distributed across actors who cannot contract with each other at the scale required. This is the precise thing governments exist to do in industrial policy, and the thing Canada's agri-food architecture has no instrument for.
These ideas may or may not survive scrutiny as sound business investments; that is what diligence is for. Their value here is what they demonstrate: that agri-food's claim on strategic status will be earned by showing the sector is relevant to Canada's national economic and security interests, not by asserting it. And the deeper truth is that this relevance is not something the sector must construct; it is intrinsic, and merely unrecognized. A fertilizer corridor is energy infrastructure; greenhouse automation is advanced manufacturing; grain is a large part of what Canada's railways and ports exist to move; food processing is the country's largest manufacturing employer; farm inputs sit inside every conversation about energy, trade and supply-chain security.
Agri-food is not a sector petitioning for admission; it is woven through the rail, port, energy and manufacturing systems the country is now racing to rebuild. The agri-food problem has been invisibility: decades of organizing, advocating and being governed in a silo have obscured an integration that has always been there. Projects of the kind sketched out above are how that integration is made undeniable; to finance ministers, to infrastructure planners, and to a public that has never been asked to see a greenhouse or a grain terminal as strategic assets.
This is what we mean by new thinking and new ways of acting. The sector, in its broadest sense, must bring forward projects, not asks; specific propositions, with robust economics, of the kind that force a minister to decide rather than consult. And governments must rediscover that their enabling assets are not only fiscal. The scarcest of them is the credibility to make markets believe a thing will happen. Canadian agri-food has now spent two years accumulating strategic language. The next two should be spent on exploring real transactions sophisticated enough to prove it was deserved.
Which returns us to the hockey stick. It is a slightly absurd thing to find in a tariff annex, but it makes the “rift” argument more plainly than any speech or policy document has managed. Agri-food has spent a generation insisting it is a national strategic sector with important contributions to make to the economic future of this country. Now it’s time to prove it.
[1] Today, most of the supply of hydrogen for ammonia production comes from fossil fuels. Natural gas is the dominant feedstock globally. Nearly all mineral nitrogen fertilisers begin with ammonia, making it a critical input for global food production.