Shipping disruptions in the Strait of Hormuz are adding fresh pressure to an already strained operating environment for Canadian agri-businesses, according to new survey data released by the Canadian Federation of Independent Business.
In survey results released last week, the CFIB said 44% of agri-businesses reported dealing with higher costs and supply disruptions for key inputs such as fertilizer because of shipping disruptions in the Strait of Hormuz, a critical global trade route. The disruptions come at a particularly sensitive time for producers during spring seeding operations.
“High taxes, ongoing red tape, and rising energy costs are already straining Canada’s food supply. Now, the Strait of Hormuz-related disruptions are compounding the squeeze,” Juliette Nicolay, CFIB policy analyst, said in a release.
The report also pointed to broader structural concerns within the agriculture sector, noting that Canada has not seen a net increase in agricultural businesses since the fourth quarter of 2022. Confidence within the sector remains among the weakest in the country, with CFIB’s April Business Barometer placing agri-business sentiment near the bottom of all industries at 53.3 points.
Regulatory burden emerged as one of the top concerns among respondents. Nine out of 10 agri-businesses said they are worried about the future of Canadian agriculture because of regulatory pressures, while nearly 70% said they would not recommend starting a business in the sector due to excessive red tape.
Property rights and infrastructure expansion are also becoming growing concerns in rural Canada. About 26% of respondents said projects such as the proposed Alto high-speed rail line and other infrastructure developments could threaten agricultural land and property rights.
In a letter sent to federal Agriculture Minister Heath MacDonald, CFIB urged Ottawa to improve competitiveness in the sector by reducing taxes, cutting regulatory burdens and strengthening protections for farmland. Among its recommendations, the organization called for reducing the small business tax rate from 9% to 6%, increasing small business deduction thresholds, simplifying labour and business risk management programs, and implementing a “two-for-one” rule on new regulations.
CFIB director of national affairs Christina Santini said governments must work more closely with producers to preserve farmland and ensure agriculture businesses remain competitive during a period of heightened economic uncertainty.
