What's Driving Vertical Farming in Canada?

May 26, 2023

Written By Murray Coleman, Lorelei Graham and Julia Schatz

Vertical farming is gaining momentum in Canada, driven in large part by changing consumer tastes, the need for greater sustainability and advanced technology.

In grocery stores and restaurants, Canadians are demanding more fresh local produce year-round. The world's changing climate threatens the reliability and sustainability of some food supply chains. Controlled environment agriculture (CEA) technology and innovation continue to improve at a rapid pace. Canadian governments and agencies have introduced new policies and funding to support vertical farming, both in the countryside and in cities.

Technology and Location

Vertical farming crops are grown indoors on vertically stacked or inclined layers and rely solely or largely on artificial lighting. Small crops (e.g., strawberries and microgreens) and leafy greens (e.g., herbs, lettuces and vegetables) may be grown in vertical farms, although the variety of fruits and vegetables is growing. The practice is not new, but its acceleration is an exciting development in Canadian agribusiness.

In March 2023, Canada's first ever hands-free vertical farm opened in British Columbia, using a touchless technology from seeding to harvest. More vertical farming operations are being established in urban settings and the first hydroponic-based high yield facility in Canada opened in a former cereal plant in Ontario. Quebec is a Canadian leader in urban agriculture as it has many urban farms, community-led rooftop gardens and the world's first commercial rooftop greenhouse operation. Several floors of an office building in Calgary have been rented to a vertical indoor farming startup. Successful vertical farms operate in rural and in remote areas across Canada. 

Government Funding and Policy in Canada

Several government supports are available for vertical farms. 

Federal—The Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a 5-year agreement between the federal, provincial and territorial governments. It took effect on April 1, 2023 and provides $1 billion in federal programs and activities, along with $2.5 billion in cost-shared programs and activities funded by federal, provincial and territorial governments. Significant adaptions of robotics equipment used in vertical farms is included in the AgriInnovate Program. The Sustainable CAP also includes an AgriScience Program to accelerate innovation by providing funding and support for pre-commercial science activities and research that benefit the agriculture and agri-food sector.

British Columbia—In February 2022, the B.C. government announced it was improving the Agricultural Land Reserve (ALR) Use Regulation to allow for more vertical farming. 

The B.C. Centre for Agritech Innovation opened in September 2022 and a vertical farming project was one of the first to receive funding.

Commercial greenhouse vegetable operators in British Columbia can apply for the Greenhouse Carbon Tax Relief Grant Program until May 31, 2023.

Alberta—The Alberta Investment Growth Fund was first introduced in 2021 and Alberta's 2023 budget proposes $15 million annually for the Fund. The first project to receive funding was a vertical farm operation.

Quebec—In November 2020, Quebec announced more than $100 million to double the size of the province's greenhouse operations by 2025. As of January 2023, the province has reached 50 percent self-sufficiency for greenhouse-grown fruits and vegetables, which is an increase of 20 percent from 2020. 

Investissement Québec, which partners with Quebec-based and international businesses looking to locate in the province, has funded various vertical farming projects.

Challenges

Proponents of vertical farms need to be aware of local laws and regulations, such as building codes. While some municipalities are beginning to develop frameworks for urban agriculture, farm operations may still run into challenges, including whether they should be following the building code requirements of a traditional high-occupancy development. 

An important consideration in all indoor agriculture is energy consumption. Energy costs for greenhouses are high, as indoor facilities require a supply of energy around the clock. Vertical farms in Quebec have the advantage of being in a province that produces relatively inexpensive hydroelectricity. New technologies are continually being developed to help reduce energy consumption in vertical farms, such as LED lighting.

No Pesticides Registered for Use in Vertical Farming

Greenhouse crops are generally grown in a single, horizontal layer and rely mostly on natural sunlight. Certain pesticides are registered with Canada's Pest Management Regulatory Agency (PMRA) for use in greenhouse growing, but these products have not been assessed for use in vertical farming, which may involve different risks to human health and the environment.

The PMRA made it clear to growers and other stakeholders in an Information Note issued in August 2022 that there were (at that time) no pesticides registered or authorized for use in Canada for use in vertical farming.

A Health Canada Working Group, in cooperation with the provinces, has been established to determine if further data may be required for the registration of pesticides for use in vertical farming. Stakeholders can also communicate their interest to the PMRA in adding vertical farming production use to a registered product label under the User Requested Minor Use Label Expansion program.

Bennett Jones' Agribusiness, Food and Beverage team includes lawyers from a range of disciplines who have a comprehensive understanding of the legal issues and challenges faced by clients involved in food and beverage production and agriculture. To discuss vertical farming opportunities in Canada, please contact one of the authors.

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