Last week, I spent a day with Martin Lavoie, a third-generation farmer outside Ottawa who showed me his aging tractor—a 2012 John Deere that desperately needs replacement.
“I’d budgeted $175,000 for a new model this spring,” Lavoie told me, pointing to rust spots on his current machine’s frame. “Now with the tariff changes, that same tractor costs over $200,000. I simply can’t make those numbers work.”
Lavoie isn’t alone. Farmers across Canada are facing sticker shock as the recent expansion of Canadian tariffs on U.S. farm equipment has created a perfect storm for agricultural producers already battling thin profit margins, extreme weather, and rising input costs.
The Canadian government introduced these measures as a response to ongoing trade tensions, with duties ranging from 10% to 25% on certain categories of imported agricultural machinery. While designed as economic countermeasures, the reality on the ground reveals unintended consequences rippling through rural communities.
According to data from Statistics Canada, Canadian farmers imported more than $2.3 billion in agricultural machinery last year, with approximately 65% coming from U.S. manufacturers. Farm equipment dealers across Ontario and the Prairies report price increases of 12-18% on most new equipment since the tariffs took effect.
“We’re seeing farmers delaying purchases, seeking repairs instead of replacements, or looking at used equipment from Europe where no tariffs apply,” explains Jennifer Wong, chief economist at AgriInvest Canada. “This creates a dangerous cycle where older equipment means higher maintenance costs and potential downtime during critical planting or harvest windows.”
The timing couldn’t be worse. The Bank of Canada’s April Monetary Policy Report indicates that while inflation is cooling in some sectors, agricultural input costs continue rising at above-average rates. Feed prices are up 7.3% year-over-year, fertilizer costs remain elevated despite recent pullbacks, and now machinery prices are climbing sharply.
For consumers, these hidden costs eventually find their way to grocery shelves. The Canadian Agri-Food Policy Institute estimates that equipment cost increases could translate to food price increases of 1.5-2% beyond normal inflation as farmers pass along expenses.
Robert Saik, agricultural technology consultant and author of “Food 5.0,” puts it bluntly: “When you add 20% to a farmer’s largest capital expense, something has to give. Either farmers absorb those costs and some go out of business, or consumers pay more for food. There’s no magic third option.”
The equipment crunch has created strange market dynamics. At Maple Ridge Equipment in Saskatchewan, sales manager Thomas Hedley notes that used tractors and combines that would normally depreciate are actually holding value or even appreciating.
“I’ve got three-year-old combines trading at 95% of their original purchase price,” Hedley said. “That’s unprecedented in my 22 years in this business.”
The tariff situation isn’t just a financial calculation—it’s transforming long-term planning for operations like Sunrise Valley Farms in Manitoba. Owner Amrit Singh had been transitioning toward precision agriculture technology that requires new equipment with advanced software and sensors.
“We’d mapped out a five-year modernization plan,” Singh explained during a phone interview. “Now we’re looking at stretching that to eight years, which means falling behind competitors in other countries who don’t face these barriers.”
This technology gap worries agricultural economists like Dr. Maya Richardson at the University of Guelph. “Canadian agriculture competes globally. If our farmers can’t access the latest equipment at competitive prices, we risk erosion of our agricultural competitiveness over time,” she told me.
Industry associations haven’t remained silent. The Canadian Federation of Agriculture has submitted analysis to the Department of Finance showing that for every dollar collected in tariff revenue, farmers face approximately $4.70 in additional costs due to market distortions and pricing adjustments.
“It’s a net negative for the agricultural economy,” says Evan Chisholm, CFA’s trade policy director. “What looks like leverage in international trade negotiations translates to real hardship for family farms.”
Some farmers have found creative workarounds. In southern Alberta, a cooperative of 17 grain farmers pooled resources to purchase equipment through a European broker, navigating complex import rules to avoid tariffs. Others are extending maintenance contracts and pushing old equipment well beyond recommended service lives.
The situation highlights agriculture’s unique vulnerability in trade disputes. Unlike manufacturers who might pass costs to consumers quickly, farmers operate as price-takers in global commodity markets, often unable to dictate what they receive for crops or livestock.
Back on his Ottawa-area farm, Martin Lavoie shows me maintenance records for his tractor—over $27,000 in repairs over the past two years. “At some point, patching up old equipment costs more than replacement would have,” he says. “But what choice do we have?”
Government officials maintain that targeted relief programs and existing agricultural supports should help offset these impacts. However, interviews with farmers across four provinces suggest that current programs aren’t structured to address this specific challenge.
As spring planting season approaches across much of Canada, the equipment decisions farmers make now will affect food production and prices throughout 2024 and beyond. The hidden costs of trade policy are being calculated in farm offices across the country—and the math isn’t working out for those who grow our food.
