Since the early part of this century, the fast-paced development of Alberta’s oil sands and the push for more pipelines across the country have driven Canada’s economic fortunes. Indeed, the Toronto Stock Exchange is one of the most carbon-intensive exchanges in the world — with over 25 per cent market capitalization in the oil and gas sector. Changes in energy markets (including booming domestic production in the U.S. and decreasing global demand) have depressed energy prices, and the effects are felt in the broader Canadian economy. We are optimistic that the Canadian food, beverage and agribusiness sector presents a viable and attractive alternative for investors today for a safe harbour from the upheaval in global energy markets. As a northern latitude area, the Canadian Prairies are expected to experience temperature increases by a multiple of global averages, which in turn increases growing seasons. These environmental shifts are also expected to increase crop yields and the diversity of crops that can be cultivated. We anticipate Canada’s position to continue to improve as a lead global exporter as it benefits from improving agricultural conditions in the Prairies and increasing global demand.1
As in past years, the Canadian food and agribusiness sector was once again the subject of a number of high-profile transactions (see Notable Transactions, page 2). Canada continues to be a leading exporter, and a significant importer, of agricultural and agri-food products. Similarly, farmland has been a strong asset, and in recent years, we have noted increased investments in Canadian farmland assets by financial investors (e.g., Middle Eastern sovereign wealth funds and the Canada Pension Plan).
As has become customary in the last four issues of this report, in this issue, we once again present an overview of significant global and Canadian M&A transactions in the food, beverage and agribusiness sectors. We also present four feature articles. The first article highlights the push to organic pesticides. The second provides a brief primer on the regulation of the dairy industry in Canada. In our third article, we provide a short overview of the Canadian farm debt market. Finally, we conclude with a summary and some reflections on the proposed Trans-Pacific Partnership Agreement and its ramifications for the Canadian agribusiness sector. This report was prepared by the Blakes Food, Beverage & Agribusiness group based on nonconfidential information acquired through our practice and from a review of public information. The information was gathered in the first three quarters of 2015. Our goal in preparing and presenting this report is to highlight certain trends, developments and opportunities we believe will have an impact on the food, beverage and agribusiness sector going forward. The information contained in this report is intended for general informational purposes only and does not constitute legal advice. While care has been taken to ensure the information herein is accurate, we make no representations regarding its accuracy. This report should not be relied on to replace professional advice, legal or otherwise, relating to any specific circumstances.
Read more: The Food Report 2018
1. Jeff Rubin, The Carbon Bubble: What Happens to Us When It Bursts, Random House Canada, Toronto (2015)
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