Structure

The food and beverage processing sector remains oriented to the domestic market. However, the share of production that Canada exports has increased from about 9% to about 16% between 1988 and 1996. Imports have also increased from about 10% of the domestic market in 1988 to about 16% in 1996. In 1997, based on preliminary data, Canadian processed food exports reached $9.6 billion, while imports increased to $9.5 billion. Because exports have increased at a faster rate than imports, Canada has enjoyed a positive trade balance of $31 million in both 1996 and 1997. The trade relationship with the United States continues to strengthen, accounting for about 73% of exports and 62% of imports in 1997, up from 60% and 47%, respectively, in 1988.

Although the bulk of food and beverage processing sector activity occurs in Ontario and Quebec, the economic significance in terms of the share of regional manufacturing activity is greatest in the Atlantic and Prairie provinces (Table 2). The influence of world trade in processed food and beverage products varies significantly by region. Export orientation is greatest for the Prairie provinces and lowest in Quebec. Plant locations also vary; red meat and fruit and vegetable processing plants tend to be located near sources of farm production, while fluid milk and bakery product plants tend to be clustered near large centers of population. Activity in the major subsectors occurs in every region. Meat processing is generally the most important activity in each region, particularly in the Prairie provinces. Dairy and meat products are the major products in Quebec, with the share of total shipments of dairy products being significantly higher than in most other regions.

The food and beverage processing sector is fragmented and diverse and is dominated by 67 large and very large firms. The two largest subsectors, meat and dairy products, account for about one-third of the total value of shipments in 1996. Import penetration and export orientation vary widely among the subsectors. For example, export orientation ranges from less than 10% in the supply-managed subsectors, canned and preserved fruits and vegetables, sugar, snack food, soft drink, and brewery subsectors, to more than 60% in the distillery products subsector.

The food and beverage processing sector is composed of relatively large Canadian-owned multinational enterprises (MNEs), foreign-owned MNEs, large and small cooperatives, and small and medium-sized enterprises

* Includes fish

Figure 2. Value of transactions between various components of the Agri-food system, 1996. Source: Ref. 1.

* Includes fish

Figure 2. Value of transactions between various components of the Agri-food system, 1996. Source: Ref. 1.

Table 2. Food and Beverage Processing Sector by Region, 1996

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