Canola ripples felt widely through the Alberta and Canadian economies

The crop now contributes $26.7 billion a year to the Canadian economy, 
with a quarter of that in Alberta

Like a rock thrown in a lake creates ripples on shore, a new study shows the canola sector’s impact is growing large, causing ripples to turn to waves.

Canola’s contribution to the Canadian economy has tripled over the past decade to $26.7 billion a year, according to an independent analysis done for the Canola Council of Canada by agribusiness research firm LMC International. The report shows the canola industry generates a total of 250,000 jobs and $11.2 billion in wages for Canadians.

“There’s been a substantial increase in the benefits from canola that are rippling through the Canadian economy,” said Brian Innes, the Canola Council’s vice-president of government relations. “Compared to the previous three-year period of 2009-11, the total impact of canola has increased by nearly $6 billion.”

The total annual impact on the Alberta economy is pegged at $7.1 billion, including 72,500 jobs (on farms, in related industries and other sectors) and $3.5 billion in wages.

“Albertans know that canola is an important crop, but they may not realize that part of their own livelihood is linked to it,” said Innes. “In fact, the canola value chain generates a substantial amount of revenue and investment, and the benefits are felt throughout Alberta’s economy.”

Of the $26.7-billion national total, growing and developing seed accounts for the largest impact at $16.4 billion. Processing is next at $4.7 billion, domestic markets (including vegetable oil and meal for livestock) $3.1 billion, transportation $1.8 billion, elevation $400 million, and port activities $300 million.

‘A source of great pride’

A number of factors was cited as contributing to the growth of the canola sector’s economic impact over the past decade including increased production, research, and processing.

“The canola value chain is working hard to grow these economic benefits by continuing to increase yields, expand into new markets, and build on the advantages of our exceptional products,” said Innes. “Canola’s benefits reach across Canada — it’s a source of great pride for our industry.”

Of the 250,000 jobs linked to the sector nationally, the canola industry was directly accountable for over 74,000 jobs. When additional family members are factored into the equation the number of people directly supported by the canola sector rises to nearly 150,000.

Jobs linked to canola have higher-than-average wages, according to the report. The average salary for jobs generated by canola for this three-year period was $62,000, compared to the average Canadian salary of $50,000.

LMC studied 11 distinct links in the canola value chain, and found that most of the resulting economic benefits can be traced back to growing the crop. In addition to providing a substantial proportion of farm family income, canola production leads to investment in things such as research, variety development, equipment, fertilizer, crop protection products and a wide range of business management services.

About the author

Contributor

Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg-based company specializing in grain and commodity market reporting.

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