Productivity growth has stagnated in Canadian agriculture equipment manufacturing

This is the first of two posts looking at productivity in the Canadian agriculture equipment manufacturing sector.

Canadian farm equipment manufacturers are powering an $10B industry — but the shop-floor metric that matters most is slipping. Between 2015 and 2021, labour productivity rose just 11%, and the broader trend is downward. With tariffs, tight farm margins, and a heavy reliance on the U.S. market, standing still is quickly becoming a competitive risk.

Canadian farm equipment manufacturers are essential to supporting the food value chain and Canada’s competitiveness in global markets by producing machinery tailored to Canada's unique growing conditions. Despite global consolidation, Canadian manufacturers have stayed successful by being adaptable and focusing on niche, "shortline" products (ones that attach to tractors and other machinery). Recent innovations — such as autonomous platforms, precision seeding, and advanced seeders and sprayers — highlight the strong partnership between manufacturers and producers, where challenges on the farm and in the fields translate into solutions in the factory. In this post, we examine productivity growth in Canadian agricultural equipment manufacturing sector and assess the importance to Canada’s economy.

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