Ottawa open to Chinese investment in Canada’s food processing, manufacturing industries

Ottawa is encouraging China to invest in Canada’s food processing and manufacturing industries, an area where the country has struggled to secure the capital it needs to stay globally competitive.

Agriculture Minister Heath MacDonald said in an interview that he sees “lots of opportunities” under new trade agreements signed with Beijing for Chinese investment in areas such as domestic value-added processing – facilities that transform raw ingredients into marketable products – and in Canadian agricultural research.

“They want our expertise and we have expertise in agriculture,” he said. “I think they have a keen interest.”

Mr. MacDonald made the comments after returning from Prime Minister Mark Carney’s trade mission to Beijing. The delegation set out last week to recalibrate an increasingly fraught relationship with China. The trip resulted in significant cuts to a number of tariffs on agricultural products, and agreements between the two countries on food safety standards and investment in energy and food production.

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Investors and agri-food industry spokespeople welcomed the prospect of increased Chinese capital, but are also warning that Canada must ensure it maintains control of its resources in that sector.

A historically low-priority file for Ottawa, agriculture has long struggled to secure the capital required to transform Canada into the food juggernaut it could be, said Evan Fraser, director of the Arrell Food Institute at the University of Guelph.

“Canada is likely to become the most important breadbasket in the world over the next few years,” he said, noting the effects of climate change and rising aridity in other more southern agricultural competitors.

“This will either put a target on our back – as some nations pursue empire – or we will form coalitions that situate Canada between China, the EU and the US … if we don’t seize the moment, the moment will seize us.”

Canada’s agricultural industry generated around $149.2-billion – 7 per cent – of the country’s gross domestic product in 2024 and accounted for one in nine jobs, according to Statistics Canada.

However, the sector is still falling short of its potential, according to some metrics.

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In 2017, Canada ranked fifth in global agricultural exports. According to a Royal Bank of Canada report from February, 2025, Canada has since dropped to seventh place and, without corrective action, could drop to ninth by 2035. A global model developed by the Boston Consulting Group’s Centre for Canada’s Future and RBC shows Canada’s global market share has relatively declined since 2000 by 12 per cent.

The RBC report said Canada is an “innovation commercialization laggard.” Government spending on agri-food research and development has declined by 9 per cent on average, annually, over the past decade. Investments in value-added operations have grown, climbing from around $1.5-billion in 2000 to $5.3-billion in 2025. Yet more capital is required to keep Canadian products competitive with new agricultural powers such as Brazil, the report said.

Canadian agri-food is “starved of capital,” Mr. Fraser said.

A host of factors are to blame for this, said Alison Sunstrum, chief executive at Conserve X, a Canadian company developing and investing in emerging agri-tech. Ms. Sunstrum is also a general partner of The51 Food and AgTech Fund, which invests in outliers transforming the business of food and agriculture.

Canada has an abundance of crops and low-cost energy, she said, but agri-food businesses struggle to scale because of limitations with transportation infrastructure, regulatory burdens that delay approval times, and opaque standards and labelling when bringing new products to retailers.

Attracting foreign capital will require Ottawa address these challenges, she said. “We need to make sure we’re the most investable environment.”

Should Canada attract Chinese investment, the returns could be substantial. Ms. Sunstrum’s fund is primarily focused on Asian markets. The size of the population in those countries means the opportunities are enormous, she said. For example, India and Southeast Asia are expected to account for 31 per cent of global agriculture and food consumption growth by 2033, according to the OECD 2024 outlook.

Foreign investment from those areas would boost exports. But Canada should nevertheless tread carefully, said Dana McCauley, CEO of the Canadian Food Innovation Network.

“We can use money from any source, depending on the strings,” she said.

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Before joining CFIN, Ms. McCauley worked in food innovation and research at the University of Guelph. In this role, she says, she was constantly warned about intellectual property threats from China.

But this is not a reason to shun Chinese money, she said. A long-term, stable relationship with foreign investors pays dividends, especially when it comes to agriculture – a key industry in rural Canada. Moving forward, airtight contracts will be key, Ms. McCauley said.

Mr. MacDonald echoed this sentiment in the Wednesday interview. Foreign investment and trade do not equate to dependence, he said. Instead, they are part of the path to Canadian resilience.

“The global landscape continues to evolve in all aspects. We have to continue to evaluate and manage these threats,” he said. “We don’t tolerate foreign interference. We’ll continue to look for trading opportunities with major economies, while always upholding our Canadian values.”