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Commodities, energy sector will drive Canada’s economic growth for 2022: report

Canada could be in a position to satisfy swelling global agricultural commodity demand in light of the ongoing invasion of Ukraine.

That’s according to mid-market focused consultation firm RSM Canada, which launched its second 2022 edition of The Real Economy, Canada. The Real Economy, Canada is a quarterly report for economic analysis into how the middle market can navigate current complex economic and geopolitical issues.

The report states that Canada, as well as the U.S., are in a strong position to alleviate global food insecurity caused by the invasion of Ukraine and other global geopolitical disruptions – if they increase production and exports. However, increasing production could also have its drawbacks, the report argues, such as the impact of higher labour and energy costs, as well as the impact of climate change on grain production.

Already, such challenges are being observed across Canada’s western growing regions; the most recent grain reports for the Prairie provinces show that excess rainfall, cold temperatures and other external factors are posing challenges for growers. This is particularly pronounced in Manitoba, where seeding is at four per cent, compared to 50 per cent, the five-year average for comparable weeks.

Tu Nguyen, economist and ESG director with RSM Canada, said in the report that Canada is “in a position to replace some of the agricultural products currently in short supply. North American businesses that produce agricultural commodities will need to look ahead and prepare accordingly, whether by increasing production or securing future contracts, as global food supplies are disrupted into next year.”