world sugar
markets - Canada

Sugar growing field

how influential, producing countries affect the industry

Sugar beet factory

Canada case study

5 June 2017


Canada has only a small domestic sugar industry and imports the majority of its domestic requirements in the form of raw sugar which is processed by its portside refineries. Canadian sugar demand is met mainly from three port refineries located at Montréal, Toronto and Vancouver which supply over 90% of consumption.

A small beet sugar plant is located south of Calgary at Taber in Alberta which produces about 100,000 tonnes/year and supplies local customers. Although a minor player in global terms, it has been included as an example of a country which is almost wholly dependent on imports to satisfy domestic demand.


The Policy Environment

Canada often claims its sugar industry has little government support, and so is a ‘free market model’ for other global producers1. However, Canada enforces an unusual system of additional duties on imports of refined sugar from its main competitors which effectively limits imports of refined white sugar2 and protects their refining industry.

Canadian sugar industry structure

Canada has no known support arrangements for its domestic beet sugar industry having scrapped its subsidy arrangements as being superfluous as the industry is protected by distance from competition.

Import arrangements

Canada’s international trade arrangements also at first sight appear to be minimal. Imports of raw sugar enter the country duty free. A small duty of CAD$31/tonne3 (equivalent to 5% - 8% depending on world prices) is applied to imports of refined white sugar. But this doesn’t tell the whole story, as other policy restrictions have been put in place.

Under the North American Free Trade Agreement (NAFTA)4, the Canadian refined sugar import duty would not usually apply to the USA, which should therefore be able to supply refined sugar to Canada duty free, except that Canada refused to include sugar in NAFTA so that NAFTA only covers trade in sugar between the USA and Mexico. 

Under normal circumstances this would be expected to be a significant source of supply, as much of central Canada is within range of the competitive US beet sugar industries in the Red River Valley and Michigan. But in reality this does not happen because of the World Trade Organisation (WTO) compliant additional duties Canada imposes on its main competitors. These duties have applied since 19955, as Canada has renewed them every time they have come-up for review despite the WTO understanding that such duties are not meant to be a permanent form of protection.

The countervailing and ‘anti-dumping’ duty system

Imports of refined white sugar to Canada from the USA are subject to ‘anti-dumping’ duties equal to 78% of the selling price to the importer in Canada6. At typical US supply prices this equates to an import duty of at least US$400/tonne which effectively prevents any significant import trade. Imports of white sugar from the USA are consequently negligible, averaging less than 1% of total imports in recent years7.

Canada also applies countervailing duties to all imports of white sugar originating in or exported from the EU - another potentially competitive supplier. In September 2014 these duties were increased to €244/tonne8. As a result, white sugar imports from the EU are close to zero - less than 0.1% of total demand9.

This is significant in the context of the recently agreed Canada-EU Comprehensive Economic and Trade Agreement (CETA)10. Under CETA, trade in sugar between the EU and Canada theoretically becomes ‘liberalised’ after seven years11. However, the continued enforcement of the countervailing duties means that the trade agreement is not reciprocal for sugar – free trade will be possible from Canada to the EU, but not the other way round. 

Canada applies both anti-dumping and countervailing duties to white sugar imports from Germany, the UK, Denmark and the Netherlands12 which similarly prevents any significant quantities of refined white sugar imports from these countries.

Our Analysis

The Canadian sugar model is less ‘free market’ than it first appears. It has introduced general and country-specific import tariffs which protects its refining industry by giving it unrestricted access to low cost raw sugar supplies from the world market at zero duty, while preventing imports of refined white sugar from Canada’s main competitors, and placing a small but significant duty on white sugar imports from all other sources. This system therefore also involves a form of government intervention, designed to be advantageous for Canada’s refining industry.

It does not, however, offer a sustainable basis for operating a competitive domestic industry. The only reason the small beet sugar operation in Alberta survives under such adverse circumstances is because of its remote location. Being 1,200km and the opposite side of the Rockies from the Vancouver refinery, and about 4,000km from the refineries in Montréal and Toronto, increased transport costs sufficiently provides a small market niche for local customers for this operation13.


  1. Canada Sugar Institute website, 2016
  2. Imports of refined white sugar currently account for less than 3% of total imports and Canadian demand, ISO yearbook, 2016
  3. Canada Sugar Institute website, 2016
  4. The North American Free Trade Agreement (NAFTA) agreed in 1994 and progressively implemented through 2008 eliminates most tariffs for goods and services, including in most agricultural products
  5. Canada International Trade Tribunal, Dumping and Subsidizing, expiry review white sugar, November 2005
  6. Canada Border Services Agency (CBSA) Statement of Reasons relating to anti-dumping and countervailing duties in respect of the USA and EU, 30 June 2005 and 30 June 2010
  7. ISO yearbook, 2016; Canada International Trade Statistics Division, 2016
  8. CBSA letter to CEFS, 4 September 2014
  9. ISO yearbook, 2016
  10. The Canada-EU comprehensive economic and trade agreement (CETA) was agreed in October 2016
  11. Under CETA import duties for sugar reduce to zero seven years after entry into force of the agreement
  12. CBSA letter to CEFS, 4 September 2014
  13. Statistics Canada, Catalogue 96-325-X, May 2008

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