Trade & Market Diversification

Farmers prosper from free trade, clear and predictable rules, and diverse markets.

Growth opportunities: Pursue policies and trade agendas that position Canada as a top supplier of canola for food, fuel and feed.

Trade is key to the competitiveness and growth of the canola sector. Canadian farmers provide high-quality canola to the world, but they need science-based trade rules to supply, expand, and diversify markets. Continuing to focus on rebuilding reliable and mutually beneficial trade relations with canola’s biggest trading partners is a key priority for farmers.

Canola is facing unprecedented trade challenges with China, the second most important export market. All canola products, seed, oil and meal are facing tariff obstructions. A swift resolution is required to resolve these tariff issues that sever access to a critical market. Farmers are deeply concerned about how this will impact the value of their crop.

In 2024, over 90% of canola seed was exported to five markets, including the U.S. and Mexico. Canola exports to the United States were valued at $7.7 billion, 53% of the total canola trade value. The scheduled review of the Canada-United States-Mexico Agreement in 2026 presents a critical opportunity to maintain canola’s position in the market. Now is the time to secure relations with canola’s two most important markets.

In other markets, commercially meaningful free trade agreements with Indonesia and the Association of Southeast Asian Nations, investments in market access activities, and the continuation of on-the-ground technical expertise from the Indo-Pacific Agriculture and Agri-Food Office will help the canola industry manage evolving regulatory requirements and help generate market access solutions and opportunities in the region.

Canada is the #1 exporter of canola in the world

Top 5 Market Values

Biofuels: Driving Demand and Market Diversification for Canola

Demand for biofuels is growing, and so is the opportunity for Canadian canola. Canola oil is an ideal feedstock for biofuels, and it is anticipated that demand for canola from a single biofuel producer would be nearly 2.5 million metric tonnes. This volume is greater than the 2024 seed exports to Japan and Mexico combined.

A Canadian and North American biofuel market matters to farmers due to the strong demand signal and protection it offers from other market access issues, such as tariffs and non-tariff trade barriers, that canola faces in exports.

Canola oil exports to the U.S. were strong following its 2022 approval for renewable fuel use. Canola oil exports rose significantly, reaching 3.3 million metric tonnes (MMT) in 2024 compared to 2.0 MMT in 2022.

Changes to U.S. biofuel credit policies have reduced canola feedstock demand for U.S. biofuels in 2025; however, other anticipated policy signals may improve canola oil’s position in 2026.

The canola sector is mobilizing to process more canola domestically, with canola processing announcements made in 2021 beginning to come online. These investments support growth for Canada by creating stable domestic demand for canola farmers, bringing well-paid jobs to rural communities, increasing value-added exports resulting in economic growth, and helping to reduce GHG emissions.

From Farm to Port to Customer

Farmers prosper when there is a reliable transportation network to ship their product.

Growth opportunities: Make extended rail interswitching permanent and build adaptable and resilient trade infrastructure.

Over 90% of canola grown in Canada is exported to customers all over the world. Bulk rail shipping is the only practical means to move canola seed, oil, and meal from the areas of production to export position. Rail system failures impact farmers financially and competitively.

• When railways can’t deliver on service, or transportation is halted due to weather or labour disruptions, grain and process elevators quickly fill to capacity. Even if a contract is in place, farmers are unable to sell canola, constraining their farm cash flow.
• Rail transportation delays slow the loading of canola at port, resulting in extra costs such as demurrage fees. These costs can be passed down to farmers through lower commodity prices at the delivery point.

When global customers do not receive their products on time, Canada’s reputation as a reliable supplier is eroded. Extended interswitching can help alleviate transportation problems by keeping supply chains flowing and supporting competition between Class 1 railways. With this tool, shippers physically located on a single rail line can seek competing service from the next closest railway within a specified distance.

The Prairie-based extended interswitching pilot that expired in March 2025 should be extended, with a path to permanency that includes all Class 1 carriers, an expanded distance to 500 km, and incorporates the grain-growing regions of British Columbia.

For the long term, transportation corridors must be upgraded to handle future increases in shipping volumes as Canada invests in diversified trade flows. Only one rail line, tunnel, and lift bridge service the north shore terminals at the Port of Vancouver. This is insufficient, with no alternative route when there’s an obstruction. The federal government must prioritize infrastructure improvements that will help facilitate exports, especially through the Western corridor to supply growing Asian markets.

DID YOU KNOW?

The average tonne of Canadian-grown canola travels 1,520 km to reach a Canadian port.

Sustainability & Canadian Canola

For decades, Canadian canola farmers have demonstrated efforts toward sustainability while continuing to feed and fuel the world. They understand that the health of their land is linked to the success of their farm, so their farming practices continually evolve.

Growth opportunities: Recognize farmers for their contributions to the environment and prioritize support for continued advancements in plant breeding, crop protection products, and agronomic practices that promote sustainable intensification and competitiveness.

The transition to reduced tillage, a farming practice which involves little to no digging up of the soil, is a clear example of farmers and agriculture becoming more productive, avoiding additional greenhouse gas emissions, and maintaining healthy soils. A practice that was previously occurring on 7% of Western Canadian seeded acres in 1991 improved to 60% of seeded acres by 2021. 1Soil organic carbon has increased in the prairies, seeing significant improvements from 1981-2016, mainly due to reducedtillage practices and reduced summer allow.2 Environmental contributions associated with soil organic carbon and carbon sequestration on agricultural lands should be recognized through Canada’s carbon 
offset credit system.

In addition, payment for the ecosystem goods and services provided by agricultural fields and surrounding areas, such as wetlands and riparian areas, is key in recognizing farmers for their efforts while helping them remain profitable, competitive, and able to adopt beneficial management practices.

Future environmental and production benefits of canola will depend on sustained innovation in plant breeding, crop protection products, and agronomic practices that support sustainable intensification. Increased investments in these areas will help canola farmers mitigate and adapt to the effects of climate change while remaining competitive. 

1 Statistics Canada. Table 32-10-0367-01 Tillage and seeding practices, Census of Agriculture, 2021

2 Agriculture and Agri Food Canada. Figure 4. Cumulative soil organic carbon change (kg/ha) from 1981 to 2016 due to changes in tillage and summerfallow, Soil Organic Matter Indicator