Note from CAPI

Canadian agri-food is operating in an increasingly volatile environment. Global market dynamics, climate pressure, labour shortages, geopolitical instability, and rapid technological change are all shaping how decisions get made across the sector. For producers and firms alike, uncertainty is not fleeting, it is becoming the norm.

This context informs CAPI’s study of the digitization of the sector. Digital capability is increasingly tied to productivity, resilience, and competitiveness. Yet adoption remains uneven. Canada has strong research capacity, promising technology firms, and a growing agri-food innovation ecosystem; however, adoption at commercial scale and system-wide integration continues to lag.

In 2025, CAPI and EMILI undertook a first comprehensive assessment of digital agriculture in Canada. That report established the baseline. It showed clearly that adoption is uneven and that the barriers are well known: connectivity gaps, uncertain returns on investment, skills limitations, data governance concerns, and fragmented pathways from innovation to use.

This report builds from that foundation and takes the next step. Rather than restating the challenge, it identifies the key barriers and sets out actions to address them. It also widens the lens, moving beyond the farm-gate.  Gains in primary production will only translate into stronger performance if they are matched by increased digital capacity in processing and throughout the supply chain.

The five takeaways in this report are grounded in action. Canada is not short on ideas; the priority now is disciplined execution and implementation.

Key Takeaways

1. Digital transformation is inevitable, regardless of system readiness. Digital tools are no longer optional; they are becoming foundational to productivity, resilience, traceability, and competitiveness. The choice facing Canada is whether to actively shape and accelerate this transition, or risk falling behind peers who move more decisively.
2. Gaps in digital adoption are widening. Canada has no shortage of digital tools, promising firms, or early-stage activity, but uptake remains concentrated among larger and better-resourced operations. Without deliberate action, smaller farms and food manufacturers will continue to lose ground to their competition, limiting sector-wide productivity and resilience.
3. The opportunity is bigger than the farm gate. Digital transformation in agri-food cannot be understood only through an on-farm lens. Processing, logistics, traceability, manufacturing, and supply chain coordination all shape whether digital gains are captured or lost. If those parts of the system do not keep pace, pressure simply moves downstream.
4. Canada’s digital agriculture ecosystem is growing in size and activity, but it remains fragmented and poorly connected. Various initiatives within Canada’s food system are building positive momentum across AI, connectivity, data governance, and capital, yet these efforts continue to operate in silos. Digital transformation depends on coordination across actors who rarely engage directly—academia and industry, startups and government—but there are limited mechanisms to convene them. Without these shared spaces, scaling remains difficult to navigate and misaligned with adoption goals and desired outcomes.
5. Scaling requires coordinated action. Moving from pilots to widespread adoption requires deliberate action in several key areas: reducing risk through validation and testing sites, addressing growth-stage capital gaps, improving regulatory predictability, establishing clearer data governance, and strengthening system-wide coordination.

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