Warning: How U.S. Tariffs Could Crush Canada’s Greenhouse Export Economy

As U.S. tariffs on Canadian goods increase, the greenhouse sector faces significant risks due to its heavy reliance on exports to the United States. The repercussions of these tariffs have already been felt, with the Ontario greenhouse sector losing over $6 million in just three days.

1. Impact of Tariffs on the Greenhouse Sector:
   • The recent tariffs enacted by U.S. President Donald Trump on Canadian and Mexican imports have disrupted the greenhouse industry.
   • The Canada-U.S.-Mexico Agreement rules-of-origin requirements have put a strain on exports to the U.S.
2. Vulnerability of the Greenhouse Industry:
   • The greenhouse industry in Canada, especially in Ontario, is heavily reliant on the U.S. market.
   • The U.S. accounts for 99.5% of the $1.7 billion worth of Canadian greenhouse vegetable exports in 2023.

The greenhouse sector has expanded significantly over the years to meet the growing demand, but the industry faces challenges in the face of the trade war. Experts warn that Canada cannot absorb all the excess produce that might be left stranded due to the trade disruptions.

1. Challenges for the Greenhouse Sector:
   • Limited capacity to grow a diverse range of crops at scale.
   • Reliance on the U.S. market for exports, causing vulnerability to trade disruptions.
2. Diversification Efforts and Opportunities:
   • Some greenhouse companies are investing in research to diversify their crop offerings.
   • A 2024 RBC report identified key opportunities for the greenhouse sector in Canada, including spinach, bananas, coffee, okra, and certain berries.

While the sector faces infrastructure challenges and the need for access to essential resources, the vertical farm industry presents a unique opportunity amid the trade war.

1. Opportunity for Vertical Farms:
   • Vertical farms offer a local alternative and cater to the growing demand for Canadian produce.
   • These farms have seen increased interest from grocers and suppliers seeking Canadian products.

Despite the challenges posed by tariffs, the greenhouse sector remains resilient. Vision Greens, a Welland-based company, has experienced a surge in demand for its products and plans to triple its capacity. Although the path forward may be challenging, the greenhouse industry in Canada is adaptable and primed for growth.

In conclusion, the greenhouse sector in Canada faces challenges due to U.S. tariffs, but opportunities for growth and diversification remain. By leveraging innovation and investing in new technologies, the industry can navigate trade disruptions and emerge stronger in the long run.