Canada’s food and drink sector responds to federal budget plans

Canada’s federal budget for 2025 has left its food and drink industry both “encouraged” and “concerned” about the future.

Speaking about the decisions, Food and Beverage Canada (FBC) said in a statement that it welcomed “the federal government’s continued recognition of the agri-food sector’s importance to Canada’s economic and food security in Budget 2025, including new tax credits, productivity-supporting measures, and investments in trade-enabling infrastructure.”

In fact, the FBC noted that “these initiatives are essential to spur investment, improve competitiveness, and ensure companies can meet growing domestic and international demand.”

The association also added that it was “encouraged to see the government commit to addressing greenwashing provisions in the Competition Act, an important step to ensure companies are not discouraged from investing in sustainability.”

There was, however, a raft of disappointment and caution also present across the sector following the decisions that were tabled on 4 November.

For instance, the government’s 2026-2028 immigration levels plan and the knock on effect it would have upon the sector is also causing concern.

The FBC said in a statement: “Foreign workers are essential to operations across the country – particularly in rural and remote regions – and play a crucial role in ensuring Canada’s food security. We appreciate recognition of this reality and look forward to working with government to ensure future immigration policies support the stability of our workforce and supply chain.”

Challenging

Responding to the cuts to immigration, Restaurants Canada said in a statement that the government’s decisions will be “challenging for foodservice businesses to hire for hard-to-fill roles and in rural, remote and tourism areas.”

The trade association explained: “Temporary residents make up a small part of our total workforce, but they fill essential positions like chefs and cooks, hard-to-staff overnight shifts and roles in rural, remote and tourism regions where there are not enough local workers available. These workers allow our industry to be the fourth largest private sector employer, with over 1.2 million workers in every community. If a restaurant can’t hire a trained sushi chef, for example, it may have to cut staff hours or opening hours, or close entirely, putting Canadian jobs in jeopardy.”

The FBC added: “We are encouraged by the proposed one-time measure to create clear pathways to permanent residency for up to 33,000 work permit holders in 2026 and 2027. This is an important step to retain experienced workers who are vital to our operations, and we look forward to further details.”

Another element that has not emerged centres around the fact that Canada’s federal government has not created any kind of Domestic Processing Fund which was announced by the Liberal Party in the last federal election. This year, db looked into what Mark Carney could for the Canadian wine and spirits industry. There had been a call for a CA$2-billion, five-year fund to strengthen Canada’s food and beverage processing capacity, but whether this will actually become addressed reportedly still hangs in the balance.

Beer tax

Beer Canada has also highlighted its dismay that the government has not scrapped the beer tax escalator, which has impacted the industry since it was first introduced in 2017 and allowed taxes to rise more than 18% since.

Geopolitical tensions between America and Canada have already starting to shake up the sector, which has had its fair share of challenges to face already of late.

Describing the issue, Beer Canada president Richard Alexander explained: “Affordability starts with ending automatic tax hikes on beer. Canadians already shoulder the highest beer taxes in the G7. The federal beer tax escalator keeps prices climbing and strains consumers, brewers, and the hospitality sector at a time when affordability is a major concern.”

Canada’s food and drink sector responds to federal budget plans

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