Trade Disruptions Stifle Growth for Canadian Food and Beverage Manufacturers
- Delta Law
- Oct 11
- 2 min read
In mid-2025, Farm Credit Canada (FCC) released a sobering update: trade disruptions are increasingly choking growth in Canada’s food and beverage manufacturing sector. While many Canadian food and beverage products enter the United States tariff free, exporters now face stricter documentation requirements and greater regulatory friction under the Canada-U.S.-Mexico Agreement (CUSMA).
What the FCC Report Shows
In the first half of 2025, the food and beverage manufacturing sector recorded a modest sales increase of 0.8 percent. However, FCC now expects a 0.3 percent decline in the second half of the year, bringing the full-year growth forecast down to just 0.2 percent - the weakest since 2005. Much of the recent growth has come from price increases rather than higher production volumes. Export-dependent sectors such as grain and oilseed milling are being hit hardest, while domestic-focused producers like dairy and meat processors are faring slightly better. Exporters continue to face growing compliance complexity, increased shipment delays, and higher costs associated with border documentation. Although input costs for grains and oilseeds may stabilize in 2026, the near-term outlook remains cautious.
How Trade Disruptions Are Impacting Manufacturers
The FCC findings reflect pressures that many food producers are already experiencing. Exporting under CUSMA now demands more detailed proof of origin and documentation. Missing or incomplete paperwork can delay shipments or result in additional costs. Compliance expenses, currency fluctuations, and logistics delays are squeezing already thin margins. Manufacturers who rely heavily on exports to the United States are most exposed to these challenges, while those with diversified markets are proving more resilient. Ongoing volatility in commodity prices also makes long-term planning and cost forecasting difficult.
How Food Manufacturers Can Respond
To stay competitive, food and beverage manufacturers must take proactive steps to strengthen their legal and operational resilience. Start by reviewing your export documentation and customs compliance processes. Even minor errors can cause significant border delays. If your revenue is concentrated in one export market, consider diversifying into other regions or expanding domestic distribution. Review your supply and manufacturing contracts to ensure they allow flexibility for sourcing alternatives, delivery timelines, and cost adjustments. Build redundancy into your logistics network by securing backup suppliers and transport routes. Finally, conduct scenario-based financial stress tests to prepare for sudden shifts in demand or input costs.
The Legal and Contractual Side of Trade Disruption
In a period of slow growth and global uncertainty, the structure of your contracts can determine your company’s financial stability. Poorly written agreements often shift too much responsibility onto the manufacturer, leaving you exposed to penalties, compliance failures, or delayed payments. Well-drafted contracts distribute risk fairly, clarify obligations, and protect profit margins when trade conditions change.
Reviewing your supplier, export, and distribution contracts at least once a year ensures that they remain aligned with the evolving trade environment.
If your business has not recently reviewed its agreements, now is the time. A targeted legal review can uncover hidden exposure, align your documentation with new trade requirements, and give you stronger negotiation leverage with partners and buyers.
