Canadian Federal Government Taking Measures to Reduce Impact of COVID-19 on Agriculture

On April 13, the Canadian Federal Government announced the distribution of federal funds to assist farms in paying temporary workers. This monetary assistance helps compensate workers during the quarantine.

Canada, especially Western Canada, is grappling with the new reality of the COVID-19 pandemic and its impact on the 2020 growing season. Western Canada accounts for over 80% of farmable land, and the industry is heavily reliant on beef and pork exports, especially to the United States. With production and processing facilities shut down, companies are experiencing complications in distribution, which may have a significant impact on the supply chain in the upcoming months.

Labour shortages are the main issue for most farms, both in the field and in processing facilities. Many enterprises are reliant on migrant farmworkers, who travel seasonally to Canada, primarily from Mexico and Jamaica. With many farms experiencing a delay in worker arrivals and a decrease in the number of workers available, perishable crops are especially susceptible to production issues down the road.

Labour Shortages

Over 60,000 temporary, seasonal workers migrate to Canada annually for employment. Many workers are employed by the same farm year after year, receiving industry-specific training from vegetable production to winemaking. For farmers who rely on this labor, the past few weeks have been incredibly difficult. Especially when dealing with perishable crops, labor shortages can be the deciding factor in a crop’s. For one farmer, a field of asparagus is worth $40,000. But without the necessary labor to harvest, the crop will go to waste.

Labour shortages in Canadian agriculture are especially tricky because there is no natural alternative. Many farmers already express frustration with the system, since the main reason they employ temporary migrant workers is because it is nearly impossible to find Canadians who want the job. Agricultural labor can be incredibly hard work and involves significant training.

Trained employees are familiar with all aspects of the business, including the proper use of equipment, which can be a tricky skill to master. As unemployment rises in response to COVID-19 business shutdowns, it may seem like an obvious solution to employ people on farms. But most people lack the skills necessary, and farmers do not have the time or resources to train them quickly.

New Funding

As a possible solution, the Canadian Federal Government proposed new funding to assist farms struggling with income disruption as a result of the pandemic. However, the effectiveness of the bailout is debatable. Many farmers argue that it is not enough to make a difference. The money is supposed to help pay workers during the shutdown, specifically workers who have recently arrived and are in quarantine.

Because all incoming employees are subject to a two week isolation period, farms are responsible for supplying resources until work can begin. However, migrant worker activists argue that the funds may be misused, allowing farmers to collect the money without providing adequate income for workers. The distribution method may assist farms in the short term, but it is questionable as to how much it will help in the upcoming weeks.

Production Issues

It is still too early to tell the severity of the impact of COVID-19 on Canadian food production. Certain crops, like wheat and soy, are already operated in industrial systems, requiring minimal human contact. However, fruit and vegetable farmers are warning of production issues if they continue to struggle to find workers. Similarly, in the meat industry, beef processing facilities, like Cargill, may struggle to keep up with demand amidst closures.

Before the announcement of new funds for temporary workers, the Canadian Federal Government had initially temporarily banned incoming migrant workers. This decision was quickly reversed due to outcry from Canadian farmers. While the monetary assistance is significant for farm businesses in the short term, more lasting solutions to the labour shortage problem will be required. Without enough workers, Canada is subject to an incredibly volatile market, where production and distribution issues may impact food supply both domestically and internationally.

Next Steps for Canadian Agriculture

The Canadian Federal Government is taking measures to reduce the impact of COVID-19 on agriculture, primarily through the distribution of emergency funds to support farmers during the shutdown. Additional solutions, such as alternative labour resources, are also being considered. However, there has been a mixed response to these efforts.

Some farmers feel like the aid is not enough, while others think that the solutions do not apply to them. Additionally, there has been a growing concern by some activist groups concerning the rights of migrant workers. As the situation unfolds, the role of the Canadian Federal Government will be essential to limiting supply chain disruption and production issues in the next few months.

Emily Folk

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Liberal win puts Canada’s farmers and food supply at risk

Published on May 1, 2025

Todayville

This article supplied by Troy Media.

By Sylvain Charlebois

A fourth Liberal term means higher carbon taxes and trade risks. Could Canada’s farmers and food security be on the line?

The Liberal Party, now led by Mark Carney, has secured a fourth consecutive term, albeit once again with a minority mandate. This time, however, the Liberals have a stronger hand, as they can rely not only on the NDP but also the Bloc Québécois to maintain power.

This broader base of parliamentary support could provide much-needed political stability at a crucial time, particularly as Canada prepares for a new round of trade negotiations with the United States and Mexico.

For the agri-food sector, the implications are significant. From carbon taxes to trade rules, federal decisions play a decisive role in shaping the costs and risks Canadian farmers face.

First and foremost, carbon pricing will remain a central issue. Carney has made it clear that the industrial carbon tax will stay—a policy that continues to erode the competitiveness of Canada’s agri-food sector, where fuel, fertilizer and transportation costs are especially sensitive to carbon pricing. The tax, currently set at $95 per metric tonne, is scheduled to climb to $170 by 2030.

While consumers may not see this tax directly, businesses certainly do. More concerning is the Liberals’ intention to introduce a border carbon adjustment for imports from countries without equivalent carbon pricing regimes. While this could theoretically protect Canadian industry, it also risks making food even more expensive for Canadian consumers, particularly if the U.S., our largest trading partner, remains uninterested in adopting similar carbon measures. Acting alone risks undermining both our food security and our global competitiveness.

Another looming issue is supply management. Although all parties pledged during the campaign not to alter Canada’s system for dairy, poultry and eggs, this framework—built on quotas and high import tariffs—is increasingly outdated. It is almost certain to come under pressure during trade negotiations. The American dairy lobby, in particular, will continue to demand greater access to Canadian markets. The Liberals have a chance to chart a more forward-looking path. Modernizing supply management could lead to a more competitive, resilient industry while providing consumers with greater choice and better prices.

The previous Parliament’s passage of Bill C-282, which sought to shield supply managed sectors from all future trade negotiations, was a deeply flawed move.

Fortunately, the new parliamentary makeup should make it far less likely that such protectionist legislation will survive. A more pragmatic approach to trade policy appears possible.

On the domestic front, there are reasons for cautious optimism. The Liberals have promised to eliminate remaining federal barriers to interprovincial trade and to improve labour mobility, longstanding obstacles to the efficient movement of agri-food products across Canada. For example, differing provincial rules often prevent products like cheese, meat or wine from being sold freely across provinces, frustrating farmers and limiting consumer choice. Momentum was building before the election, and it must continue if we are serious about building a stronger domestic food economy.

Infrastructure investment is another bright spot. The Liberals pledged more than $5 billion through a Trade Diversification Corridor Fund to upgrade Canada’s severely undercapitalized export infrastructure. Strategic investment in trade gateways is overdue and critical for agri-food exporters looking to reduce reliance on the United States and expand into global markets.

Finally, the Liberal platform was alone in explicitly committing to support food processing in Canada, a crucial pillar of domestic food security. An increased focus on manufacturing will not only create jobs but also reduce reliance on imported food products, making Canada more resilient in the face of global disruptions.

Farmers have long felt sidelined by urban-centric Liberal governments. The past four years were marked by regulatory and trade clashes that deepened that divide. The hope now is that with greater political stability and a clearer focus on competitiveness, the next four years will bring a more constructive relationship between Ottawa and Canada’s agri-food sector.

If the Liberals are serious about food security and economic growth, now is the time to reset the relationship with Canada’s farmers, not ignore them yet again.

Dr. Sylvain Charlebois is a Canadian professor and researcher in food distribution and policy. He is senior director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast. He is frequently cited in the media for his insights on food prices, agricultural trends, and the global food supply chain.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

Agriculture

It’s time to end supply management

Published on March 23, 2025

Todayville

From the Frontier Centre for Public Policy

By Ian Madsen

Ending Canada’s dairy supply management system would lower costs, boost exports, and create greater economic opportunities.

The Trump administration’s trade warfare is not all bad. Aside from spurring overdue interprovincial trade barrier elimination and the removal of obstacles to energy corridors, it has also spotlighted Canada’s dairy supply management system.

The existing marketing board structure is a major hindrance to Canada’s efforts to increase non-U.S. trade and improve its dismal productivity growth rate—crucial to reviving stagnant living standards. Ending it would lower consumer costs, make dairy farming more dynamic, innovative and export-oriented, and create opportunities for overseas trade deals.

Politicians sold supply management to Canadians to ensure affordable milk and dairy products for consumers without costing taxpayers anything—while avoiding unsightly dumping surplus milk or sudden price spikes. While the government has not paid dairy farmers directly, consumers have paid more at the supermarket than their U.S. neighbours for decades.

An October 2023 C.D. Howe Institute analysis showed that, over five years, the Canadian price for four litres of partly skimmed milk generally exceeded the U.S. price (converted to Canadian dollars) by more than a dollar, sometimes significantly more, and rarely less.

A 2014 study conducted by the University of Manitoba, published in 2015, found that lower-income households bore an extra burden of 2.3 per cent of their income above the estimated cost for free-market-determined dairy and poultry products (i.e., vs. non-supply management), amounting to $339 in 2014 dollars ($435 in current dollars). Higher-income households paid an additional 0.5 per cent of their income, or $554 annually in 2014 dollars ($712 today).

One of the pillars of the current system is production control, enforced by production quotas for every dairy farm. These quotas only gradually rise annually, despite abundant production capacity. As a result, millions of litres of milk are dumped in some years, according to a 2022 article by the Montreal Economic Institute.

Beyond production control, minimum price enforcement further entrenches inefficiency. Prices are set based on estimated production costs rather than market forces, keeping consumer costs high and limiting competition.

Import restrictions are the final pillar. They ensure foreign producers do not undercut domestic ones. Jaime Castaneda, executive vice-president of the U.S. National Milk Producers Federation, complained that the official 2.86 per cent non-tariffed Canadian import limit was not reached due to non-tariff barriers. Canadian tariffs of over 250 per cent apply to imports exceeding quotas from the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Canada-United States-Mexico Agreement (CUSMA, or USMCA).

Dairy import protection obstructs efforts to reach more trade deals. Defending this system forces Canada to extend protection to foreign partners’ favoured industries. Affected sectors include several where Canada is competitive, such as machinery and devices, chemicals and plastics, and pharmaceuticals and medical products. This impedes efforts to increase non-U.S. exports of goods and services. Diverse and growing overseas exports are essential to reducing vulnerability to hostile U.S. trade policy.

It may require paying dairy farmers several billion dollars to transition from supply management—though this cartel-determined “market” value is dubious, as the current inflation-adjusted book value is much lower—but the cost to consumers and the economy is greater. New Zealand successfully evolved from a similar import-protected dairy industry into a vast global exporter. Canada must transform to excel. The current system limits Canada’s freedom to find greener pastures.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.