As of today, Canadian agriculture has generally avoided the brunt of the tariff escalation with the U.S. going back to early March, but the canola seed market is a notable exception where tariffs remain a challenge, with harvest approaching.
While around 70 per cent of canola seed used in Canada is produced domestically, approximately 25 per cent is grown in the U.S., with another 5 per cent produced in South America, mainly in Chile.
And as of the end of June, canola seed (HS code 1205.10.00) remains on Canada's list of products facing a 25 per cent counter-tariff that was implemented on March 4, explains Lauren Comin, director of policy with Seeds Canada, in this interview.
"We still have significant concerns with canola seed being on that first list, and those concerns are really going to come to a head here in a couple of months, when canola seed is harvested from the Pacific Northwest in the U.S. to be moved up into Canada to be used for domestic canola production," she explains.
Prices for canola seed in 2025 were not significantly affected by the March 4 counter-tariffs as seed companies moved seed into position prior to the tariff escalation, but the impact will be felt in 2026 unless there are changes in the next month or two, says Comin.
The Canadian government issued a wide-ranging remission order in April that included a tariff exemption for products from the U.S. used for processing, but canola seed for sowing was not included. Comin says Seeds Canada is encouraging seed company members to submit remission requests, but changes to the actual tariff will depend on talks at the highest level between Canada and the U.S.
The solution in the longer-term is not as simple as producing more seed domestically in southern Alberta, as Comin explains the seed production system for canola is sensitive, with isolation and climate requirements that lead seed companies to produce hybrids in multiple geographies.
Canada imports and exports around $500 million worth of seed to and from the U.S. each year, she notes. "We don't have those trade deficits that have been mentioned previously, and because of the free trade relationship that both countries have enjoyed in the past, we've built that into our production systems."
In the meantime, canola growers are getting hit from both sides, notes Comin, with Chinese tariffs on exports impacting demand and Canadian counter-tariffs on seed potentially raising the cost to produce canola next year.
Prime Minister Carney had expressed hopes of concluding a trade deal with President Trump in July, which could potentially result in the removal of counter-tariffs on canola seed. However, the Canada-U.S. trade is once again facing new uncertainty, as the U.S. president — upset with Canada's collection of a digital service tax from U.S. tech giants — announced on Friday afternoon (after this interview was recorded) that he was cutting off trade talks with Canada. Trump also said he's planning to announce a blanket tariff on Canadian imports within the next week.
