Canada’s greenhouse vegetable sector is facing significant challenges as U.S. tariffs threaten its vital export market. The country’s greenhouse industry relies heavily on exports to the U.S., with the U.S. accounting for nearly 99.5% of Canada’s $1.7 billion in greenhouse vegetable exports in 2023.
U.S. tariffs imposed earlier this month, lasting for three days, resulted in a loss of more than $6 million for the Ontario greenhouse sector alone. Ontario is the primary hub for greenhouse vegetable production in Canada, making up a significant portion of the country’s production. These tariffs, part of a larger trade conflict, pose a serious risk to the sector, which could see less demand for its products if importers reduce orders due to increased costs.
Canada-U.S. Relationship
The U.S. and Canadian agricultural sectors have long had a mutually beneficial relationship, especially in terms of seasonal exports. Canada imports substantial amounts of lettuce during the winter, while the U.S. benefits from Canada’s greenhouse vegetable offerings. This symbiotic relationship, as described by Richard Lee, executive director of Ontario Greenhouse Vegetable Growers, is at risk due to the ongoing trade tensions.
Canada’s greenhouse sector has grown rapidly over the years, but experts say the country cannot consume all the extra produce generated by its greenhouses. While the sector primarily grows tomatoes, cucumbers, and peppers, there is little room for other crops. Additionally, the infrastructure required for large-scale greenhouse farming limits the ability to diversify crop production quickly. Efforts are being made to test new crops, such as tropical fruits, but this will take time.
Rising Demand for Vertical Farming
In contrast to greenhouses, vertical farms—focused on the domestic market—may find new opportunities in the wake of the trade war. With a smaller footprint and the ability to grow produce without natural light, vertical farms are being seen as a local alternative to traditional greenhouse-grown produce. This shift is helping some vertical farms see an uptick in demand, as grocers and suppliers seek more Canadian produce.
The Canadian greenhouse sector is now looking to diversify into new markets, especially as domestic consumption rises. The RBC report from 2024 highlights the opportunities for crops like spinach, bananas, and coffee in Canada. However, the sector faces obstacles in terms of infrastructure, energy access, and water, which could hinder its ability to capitalize on new opportunities.
What The Author Thinks
The ongoing U.S.-Canada trade tensions, compounded by tariffs, highlight the critical need for Canada’s greenhouse sector to diversify its export markets. Although new markets are being explored, such as the potential for more crops in vertical farming, the reliance on the U.S. market for 99.5% of exports is unsustainable. A more diversified strategy, perhaps involving stronger trade relations with Europe or expanding domestic production, is essential for the sector’s long-term stability. Without this diversification, the greenhouse industry remains vulnerable to trade disruptions beyond its control.
Featured image credit: vwalakte via Freepik
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