A global wave of rising costs is threatening Canada’s food system. Most consumers have not felt it yet. But the micro, small, and medium businesses making food across this country can see it coming.
Canadian-owned food and beverage manufacturers are entering the most volatile cost environments in modern history with almost no targeted support designed for their reality.
What many may not realize is that they make up 91% of Canada’s food manufacturing sector. More than 8,000 companies operate in communities across the country. They produce the sauces, baked goods, beverages, preserves, prepared meals, snacks, condiments, and specialty products sold in farmers’ markets, grocers, retailers, and regional supply chains. They are the manufacturers most capable of sourcing locally and feeding their communities when global systems become unstable.
Yet together, they hold just 15 to 18 percent of the domestic market.
Not because Canadians do not want Canadian-made food.
Not because these businesses lack quality or innovation.
Because the systems that determine who succeeds in food manufacturing were never built for businesses at this scale, despite being the majority of food manufacturing in Canada.
Now, these businesses are being hit by a global economic shock that they simply cannot absorb on their own.
The Strait of Hormuz (which previously carried roughly one-third of the world’s oil shipments) has been effectively closed since March. The International Energy Agency has called the disruption the largest in the history of the global oil market. Gasoline prices in Canada surged more than 21% in a single month earlier this year and the World Bank is projecting major increases in both global energy and fertilizer costs moving into 2026.
For food manufacturers, these are not abstract global events. Fuel and fertilizer costs impact every layer of the food system: ingredients, packaging, transportation, production, storage, and distribution.
Price increases from this crisis have not yet appeared on grocery shelves, but it is steadily moving through the supply chain and will be hitting Canadians within weeks.
Worst of all? The businesses expected to absorb those pressures and pivot to feed their communities are the same businesses that already face disproportionate barriers to scaling in Canada.
“Ninety-one per cent of Canadian food manufacturers are micro, small, and medium businesses,” said Aaron Davis, Executive Director of the Small Scale Food Processors Association (SSFPA). “but Canada’s food systems are designed and maintained for just 9% of the largest processors who are largely foreign owned or multinational corporations. Sadly, Canada’s Big-Four grocery oligopolies where 80% of food in Canada is sold have spent decades creating that environment.”
SSFPA is calling on federal and provincial governments to recognize Canadian-owned food processors as critical food sovereignty infrastructure, and to act accordingly.
Earlier this year, Prime Minister Mark Carney stated at the World Economic Forum in Davos that “a country that cannot feed itself, fuel itself or defend itself has few options.” Yet food was absent from Canada’s recent Defence Industrial Strategy identifying sovereign capacities critical to national resilience.
SSFPA says the contradiction is becoming harder to ignore. With the sector already reeling from trade war tariffs, the oil crisis pushes them towards a breaking point. The Association says recent federal tariff-response measures, while significant, do not address the global oil crisis moving through food manufacturing.
“These food processors are told they are essential to Canadian sovereignty and then left to figure it out alone,” said Davis. “If they can’t survive what is coming, the people who feed Canada are going to end up in the same food bank lines as the people they were supposed to feed.“
The warning coming from the sector is not simply about rising costs. It is about capacity.
That means direct, non-repayable financial relief for small and medium processors facing unavoidable global cost increases. It means investment in regional food manufacturing infrastructure, including HACCP-certified shared-use facilities, cold storage, co-packing capacity, and distribution systems.
It means reducing the interprovincial barriers that prevent Canadian-made food from reaching Canadian consumers. And it means ensuring Canadian-owned processors have equitable access to the grocery system that currently remains heavily concentrated among four major chains.
Canada cannot talk seriously about food sovereignty while continuing to overlook the businesses that actually manufacture food domestically, and at the community and regional level. The country has spent years talking about resilience, local supply chains, and economic security. But small and medium food processors continue to operate inside systems designed to reward large-scale, consolidated multinationals, and imported food..
The businesses exist. The expertise exists. The demand exists.
What has been missing is coordinated political recognition that Canadian-owned processors are not peripheral to the food system – They are the key infrastructure within it.
“We’re not asking governments to build this sector from scratch,” said Davis. “The people feeding this country are already here. We’re asking for conditions that allow them to survive, grow, and continue to feed Canadians through this coming crisis, and the next.”
Because food sovereignty is not a slogan. It’s the difference between Canadians being able to eat through a crisis – and not having access to food in one of the wealthiest most food-abundant countries on earth.
What we do now will determine if the businesses capable of providing food to our communities still exist to feed Canadians when the global systems fail to do so.
