New research from The Simpson Centre for Food and Agricultural Policy at the University of Calgary shows that Canada’s canola industry remains structurally vulnerable because of its heavy reliance on just a few export markets, even as trade talks with China advance toward easing tariffs.
📊 According to the study, China and the United States together absorb nearly 90 % of all Canadian canola exports, leaving little room for the sector to redirect shipments if major buyers impose new trade restrictions or change policies unexpectedly. Despite recent progress in negotiations — including a landmark agreement that could see China significantly reduce tariffs on Canadian canola seed and meal —the research highlights that deeper structural issues persist.
These include limitations in infrastructure and market access that make it difficult for Canada to expand into new export destinations.
Insufficient crushing infrastructure in alternative markets, which limits the ability of countries other than China and the U.S. to process Canadian canola seed at scale.
European Union restrictions on genetically modified products, which effectively block major Canadian canola exports from entering a significant potential market.
Domestic transportation bottlenecks in Canada that constrain the movement of processed canola oil, dampening export diversification prospects. Lead researcher Farzana Shirin stressed that while tariff reductions are welcome, they do not eliminate the underlying vulnerabilities caused by heavy export concentration on a small number of markets.
The findings come as Canada recalibrates its trade relationship with China, following initial tariff cuts and diplomatic engagement. Yet analysts warn that without broader diversification strategies and investment in processing and logistics, Canada’s canola sector could remain exposed to future trade disruptions and policy changes.
