Nykole King
Regina Leader-Post
After a difficult year for Canadian canola producers, the sector has shown signs of recovery while seeking new ways to replace China as a trade partner.
That’s the word from Chris Vervaet, executive director of the Canadian Oilseed Processors Association (COPA), who expressed hope for the future despite an ongoing trade war with one of Canada’s top canola importers.
Chinese tariffs have hit especially hard in Saskatchewan, which is the country’s largest producer of canola crops.
However, there could be light at the end of the tunnel as the Canadian canola industry continues its efforts to strengthen and diversify by expanding the market.
Why the optimism?
One reason is the fact that Cargill Limited has affirmed its commitment to a new $350-million canola crush plant near Regina, scheduled to open in spring 2026.
Cargill’s one-million-tonne processing facility is expected to give Saskatchewan farmers a new outlet in light of China’s levies against Canadian canola, essentially cutting off a critical trade market.
With the help of new infrastructure, much of the 5.8 million tonnes of canola seed that would have gone to China annually is expected to be processed into canola oil and meal and end up elsewhere, says Vervaet.
“We’ve done a terrific job as an entire value chain to help and support the expansion of crush capacity in this country and, again, really provide an important market diversification opportunity when the lights go off in markets like China,” he told the Regina Leader-Post.
Impact of China’s tariffs
The Canadian canola industry was sent reeling in March when China introduced a 100 per cent tariff on canola oil and meal imports. Premier Scott Moe described it as“likely the most urgent and most significant tariff impacting the Saskatchewan economy today.”
The urgency increased in August when China added a 75.8 per cent tariff on canola seed.
As a result of China’s actions, Canada’s overall canola crush capacity — pegged at around 13 million tonnes annually — fell to a utilization rate of around 65 per cent earlier this year, says Vervaet.
Those rates have since recovered, bouncing back to around 90 per cent in the summertime, he added.
Canola seed prices have also fluctuated in 2025, reaching the year’s peak of $684 per tonne in June, but progressively falling in subsequent months. The market dipped down to $541 per tonne in October, but gained some momentum to $554 per tonne as of Dec. 10.
Despite those challenges, Saskatchewan produced a record-high of 12.2 million tonnes in 2025, according to federal estimates in December.
Vervaet says “it’s impossible to replace a market like China overnight,” so the preferred resolution is for that trade relationship to resume.
Progression amid setbacks
Amid a period of uncertainty, Cargill reiterated its long-term vision in relation to the new Regina facility and emphasized the need to work through market volatility.
“Our network is global, and we’re building flexibility into the system so we can move (canola) oil and meal to different regions at any given time,” said Jeff Vassart, president of Cargill Limited, in a prepared statement.
Cargill forged ahead with its project in a year when two other companies put their plans on hold for canola facilities near Regina. Federated Co-operatives Limited (FCL) paused its joint venture with AGT Foods for a renewable diesel facility and canola crush plant. Viterra — acquired by U.S.-based Bunge Limited in July — was also expected to build a new canola crush plant outside Regina but a springtime report from the U.S. Department of Agriculture said those plans were “unlikely to go ahead.”
Despite those apparent setbacks, Canada is expected to have an annual crush capacity of 15 million tonnes in 2026. Cargill and the Louis Dreyfus Company’s Yorkton facility are each slated to add one million to their processing capacity next year, according to Vervaet.
A few years ago, only about half of Canada’s canola seed went to crush plants, says Vervaet, who expects that number to grow closer to 75 per cent due to expanded capacity.
Finding new markets
Canola growers and processors have been aided by an increased interest in the oil as an organic matter feedstock to produce renewable fuels, according to Vervaet.
He says the industry is still dealing with a “level of uncertainty” as it awaits word on U.S. and Canadian regulations that incentivize production of lower emission fuels.
Meanwhile, growing demand for canola in the U.S., European and Canadian fuel sectors has helped offset the impacts of Chinese tariffs, says Vervaet.
“There are some positives to take away from this past year,” he added, “and we’re optimistic about the future.”
