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The Canadian food and agriculture sector is for the most part competitive and export-oriented: although challenges and opportunities vary significantly between regions, primary agriculture benefits from an abundance of natural resources and faces limited environmental constraints. Negative environmental impacts of agriculture relate mainly to local water pollution by agricultural nutrients. Productivity growth, resulting from innovation and structural change, has driven production and income growth without significantly increasing pressure on resource use. Nonetheless, the capacity to innovate is crucial to take advantage of the growing and changing demand for food and agricultural products at the global level.

This chapter outlines the role of infrastructure capacity, skills and education in facilitating innovation in agri-food. It describes the governance of policies to improve rural infrastructure, outlines main regional programmes and reviews briefly the quality and coverage of rural services. It then discusses efforts to respond to skills demand from the agrifood sector through labour, immigration and education policy. It also reports on trends in education expenditure and outlines the performance of education system. Finally, it provides an overview of education levels in agricultural, and enrolment in agricultural programmes, outlining the gap between skills supply and demand in the sector.

This chapter presents the framework applied in the review to analyse the extent to which Canadian policies are supportive of innovation for productivity and sustainability and the findings of the review of a wide range of policies in Canada. In each policy area, it develops specific policy recommendations.

This chapter outlines the importance of economic stability and public institutions in fostering public and private investment. It provides an overview of the performance of the overall economy, outlines macroeconomic developments and challenges, explains the federalprovincial governance system, and presents an evaluation of public institutions.

This chapter outlines the role of a well-functioning agricultural innovation system in ensuring good use of public funds, and higher responsiveness to the needs of ‘innovation consumers’ through improved collaboration between public and private participants, including across national borders. A well-functioning agricultural innovation system is key to improving the economic, environmental and social performance of the food and agriculture sector. The long-term positive impact of agricultural R&D on productivity growth is well established, and technologies and practices can help improve the sustainability of natural resource use.

Innovation, Agricultural Productivity and Sustainability in Canada, is part of the OECD Food and Agricultural Reviews series. It was undertaken at the request of the Canadian authorities, represented by Agriculture and Agri-Food Canada (AAFC). The review examines the conditions surrounding innovation in the food and agriculture sector business and allowing for increased productivity and environmental sustainability. It starts with an overview of the food and agriculture sector and outlines development challenges and opportunities (Chapter 2). A wide range of policies which influence incentives for innovation are then examined: economic stability, governance and trust in institutions (Chapter 3); a favourable and predictable environment for investment (Chapter 4); capacities and public services enabling business development (Chapter 5); agricultural policy (Chapter 6) and the operation of the agricultural innovation system (Chapter 7).

This chapter outlines the main challenges and opportunities for the food and agriculture sector of Canada, which will require innovation. It describes the overall economic, social and environmental context in which the sector operates, and the natural resource base upon which it relies. It provides an overview of the general geographical and economic characteristics of the country; and outlines the contribution of the agri-food system to the economy. It identifies the main structural characteristics of primary agricultural and upstream and downstream industries; describes the main food and agriculture outputs and markets; and reviews trends in agricultural productivity and sustainability.

This chapter presents an overview of Canadian regulations governing entrepreneurship, access to natural resources and products and processes and discusses the extent to which they affect the adoption of innovative practices and the introduction of new products in the country. It also discusses Canadian policies related to trade, investment, finance and taxation and their impact on the capacity of farms and agri-food firms to invest and take advantage of market opportunities.

This chapter provides an overview of domestic and trade agricultural measures, outlining those supporting investment, the adoption of innovation or environmental practices, and the development of bio-products. It also reports trends on the level and composition of support and discusses the likely impacts of agricultural policy measures on structural change, environmental performance and innovation in the sector.

The Canadian food and agriculture sector is for the most part competitive and export-oriented. Although the challenges and opportunities faced by the Canadian agriculture sector can vary significantly between regions, primary agriculture benefits from an abundance of natural resources and faces limited environmental constraints. Canada differs from many other agricultural net exporting countries in that agriculture accounts for a much smaller share of land and water use, reflecting its climate and geography. The negative environmental impacts of agriculture relate mainly to local water pollution by agricultural nutrients. Productivity growth, resulting from innovation and structural change, has driven production and income growth without significantly increasing pressure on resource use. The capacity to innovate is crucial for the export-oriented Canadian sector to take advantage of the growing and changing demand for food and agricultural products at the global level.