The Advisory Council on Economic Growth says Canada must choose a small number of promising sectors for growth as the US, UK, New Zealand and Australia have done with varying degrees of success. And while the council does not provide a specific list, it does single out agriculture and food, energy and renewables, mining and metals, healthcare and life sciences, advanced manufacturing, financial services, tourism and education as the best bets.
“We recommend identifying a few sectors (e.g., 6-8) where Canada has a strong endowment, untapped potential, and significant global growth prospects. We then recommend Canada take a focused approach that removes barriers and galvanizes the sector around a bold growth agenda,” states the report, Unleashing the Growth Potential of Key Sectors. “The Council believes that the government and private sector can collaborate effectively to identify within specific economic sectors which obstacles can and which barriers should be overcome through well designed policy actions.”
The Council says adopting a sectoral approach to promoting economic growth requires adherence to four directives:
- Identify high-potential sectors that offer the best prospects for catalyzing inclusive economic growth
- Identify the most important obstacles to growth in these sectors, and verify that these do not stem from other essential policy objectives
- Take clear policy actions to overcome these obstacles, thus improving the sector’s competitive position and prospects for growth, taking advantage, where appropriate, the new toolkit of policy instruments
- Galvanize the sector around a growth agenda
Agrifood is singled as the best sector to pilot the new policy thrust. More than two million people are directly or indirectly employed in the sector which accounts for 6.7% of GDP and generates US $26.1 billion in exports with a compounded annual growth rate of 2.7%.
“It’s one (sector) where all the trend lines are saying there’s going to be massive demand,” Council chair Domini Barton said at an Ottawa conference just hours prior to the reports’ February 6 release. “Demand will go up at least 50% in the next 20 to 25 years. Canada has very good agricultural research but we’re a laggard”.
The Council says it’s imperative for Canada to move up the agrifood value chain by processing more of our products and increasing the sector’s productivity by striking preferential trade agreements with the likes of China, India, and Japan. It also recommends establishing top-down, sector-wide goals that are “quantified, and shaped by analysis that estimates global demand for broad categories of products and tested against Canada’s potential to increase agricultural output and agfood processing”.
The objective is to increase Canada’s share of global agrifood exports from 2.8% to 5.6% by 2027. Areas identified in the report for growth potential are oilseed and pulse crops, aquaculture, dairy and technology, such as equipment, digital and scientific services, including genomics.
To rally industry, the Council advocates for the creation of an Agfood Growth Council representing the broad value chain and to be champions for the sector’s growth potential.
Key elements of a vibrant agrifood sector strategy would include the formation of a private-sector led Innovation Marketplace centred on:
- raising agfood productivity by connecting start-ups with established companies across the country
- drawing commercial concepts out of university research centers, and providing initial funding to help offset the risk of pilot projects
- a patent box regime to incent commercialization
- modernizing regulations to streamline approvals and remove barriers to bringing new solutions to market
- growth capital by encouraging Canada’s leading banks and institutional investors to establish patient capital funds focused on smaller businesses
- a big data strategy to securely collect agronomic and economic data from farmers and food processors, providing them with enhanced decision-making tools.
The Council says use of big data would help to “enhance yield, crop quality, and competitiveness, foster system-wide transparency and traceability, and furnish researchers with data for their work–all through partnerships with analytical platform providers and scientists.”