Export markets are critical for Canadian sugar and processed foods containing sugar. Efficient sugar production, based on world market sugar pricing, has resulted in the development of a vibrant value-added food processing sector in Canada. Canada’s sugar industry depends on food processors for 80% of sugar sales and food processors in turn depend on Canada’s local supply of high quality, competitively priced sugar.

The United States is, by far, the most important market for Canada’s sugar and sugar-containing products (SCPs) exports. Canada can supply the U.S. with high-quality SCPs, from certified production facilities on a just-in-time basis. The U.S. similarly depends on Canada as the key destination for its exports.

The majority of sugar-containing foods are freely traded between Canada and the United States with two-way trade valued at $11.3 billion in 2019, up from $1.7 billion in 1995. Based on sugar, other ingredient costs and a number of other competitive factors, both countries have enjoyed a similar rate of growth in exports to each country. Overall, Canada-U.S. trade in SCPs is complementary – producers and consumers in both countries have benefitted.

Canada-United States Value of Sugar-Containing Products Trade Canada exports to US Canada imports from US Trade Balance
Thousands Canadian Dollars
1995 831618 871746 -40128
1996 976211 959665 16546
1997 1180766 1165879 14888
1998 1499276 1362186 137089
1999 1624983 1425040 199943
2000 1774053 1454307 319746
2001 2230515 1629946 600569
2002 2958444 1902281 1056163
2003 3301201 1972451 1328750
2004 3403020 2061221 1341798
2005 3375406 2182600 1192806
2006 3350516 2251964 1098552
2007 3273304 2293027 980277
2008 3379128 2636974 742154
2009 3355219 2930605 424614
2010 3465855 2892016 573839
2011 3588365 2990192 598174
2012 3801862 3248317 553545
2013 3989953 3523516 466436
2014 4484910 3882304 602606
2015 5296922 4616828 680094
2016 5750814 4796016 954798
2017 5760885 4747317 1013568
2018 5950611 4782406 1168205
2019 6419400 4914618 1504782

Canada-US-Mexico Agreement (CUSMA)

The North American Free Trade Agreement (NAFTA) was implemented in 1994 and provided for gradual free trade in sugar between the United States and Mexico. In fact, Mexico achieved full duty-free access to the U.S. in 2008. Canada was excluded from the NAFTA sugar agreement so Canadian sugar exports continue to be limited to one-tenth of one percent (0.1%) of the 10.5 million tonne U.S. sugar market. Canada also continued to faces quota limitations on a wide range of sugar-containing products while Mexico's access has been unlimited since 2003. 

On November 2018, Canada, the United States, and Mexico signed the text of the Canada-United States-Mexico Agreement (CUSMA). The CUSMA preserves the existing sugar and sugar-containing product (SCP) provisions between Canada, the US, and Mexico, and adds new access to the US for Canadian sugar and SCPs. The agreement entered into force on July 1, 2020. 

The CUSMA agreement preserves current access to the US for Canadian refined sugar and SCPs. This includes the current access of 10,300 tonnes beet sugar and 59,250 tonnes SCPs. These are Canada-specific shares of US WTO tariff rate quotas (TROs) which were specified in a 1997 Canada-US bilateral understanding. The provisions of this bilateral understanding have been incorporated into the CUSMA agreement. 

The CUSMA added two new quotas providing an increase in US access for Canadian beet sugar as well as an increase for Canadian SCPs, i.e. 9,600 tonnes of beet sugar and 9,600 tonnes of SCPs on an annual (calendar year) basis. The additional SCP access has a wider range of products and more flexible rules than the WTO quotas to ensure the quota will be fully utilized, i.e., all products from cane sugar "refined in Canada" can be shipped to US retail, food service or food processing establishments. 

When the US market requires additional imports of refined sugar, the CUSMA provides Canada with a 20% share of any increase in the US WTO refined sugar TRQ. This additional sugar can be supplied from Canadian beet sugar or cane sugar refined in Canada. See: Additional Tariff-Rate Quota Volume for Refined Sugar From Canada Under the USMCA - July 1, 2020.  

Canadian exports of refined beet and cane sugar as well as SCPs under these provisions must obain a Canadian export permit from the Government of Canada. 

See: Notices regarding sugar and SCPs under Canada's Export and Import Permits Act (EIPA) and corresponding regulations: 

U.S. Sugar Policy

Unlike Canada’s free market sugar policy, the U.S. government intervenes in its sugar market to support domestic production of cane and beet sugar. The policy artificially supports U.S. domestic sugar prices above world and Canadian price levels, restricts imports and uses a special “re-export program” to encourage exports of sugar and sugar-containing products.

The sugar program uses three tools to ensure that U.S. growers and sugar processors receive a minimum price for their sugar.

  • The U.S. Department of Agriculture (USDA) makes loans available to U.S. processors of sugarcane and sugar beets at set loan rates that support the market price above world prices
  • “Marketing allotments” are set to limit the amount of sugar that processors can sell in the U.S. market but do not limit the amount of production so the excess must be stored or exported
  • Quotas (TRQs) restrict the amount of foreign sugar allowed to enter the U.S. market.

Tariff rate quotas (TRQs) on imports of raw and refined sugar and a number of sugar-containing products continue to limit imports into the United States from all countries except Mexico. TRQs set a fixed volume of access at a low or duty-free rate but limit access above that quota with a much higher, usually prohibitive tariff.

U.S. global imports of refined sugar are restricted by a very small TRQ of 22,000 tonnes (U.S. fiscal year October 1 - September 30). Canadian refined beet sugar is limited to a 10,300 tonne share of this TRQ, representing less than 0.1% of the 10.5 million tonne U.S. sugar market. Canadian refined beet and cane sugar can also complete with other global suppliers for a share of the small 7,090 tonne global portion of the TRQ. Any exports of Canadian sugar above these TRQs face the U.S. high tariff rate of $US 357 per tonne which is almost always prohibitive. Under the CUSMA, Canada obtained an additional TRQ of 9,600 tonnes beet sugar annually (calendar year).

Canada does not produce raw cane sugar so cannot access the much larger U.S. TRQ of 1,117,195 tonnes reserved for preferential raw cane suppliers. Refined cane sugar from Canada does not qualify given the U.S. restrictive “rule of origin” which only allows cane sugar from a country that produces raw sugar. A limited number of countries have also negotiated modest additional TRQs through bilateral trade negotiations (see Regional and Bilateral Trade). Canada also achieved flexibility under the CUSMA to supply cane sugar refined in Canada from "non-originating" raw sugar for any additional US import needs above its international trade commitments. 

U.S. imports of sugar-containing products that contain more than 10% sugar also face a number of TRQ restrictions. Examples of Canadian products that continue to be restricted include fruit flavoured beverage mixes, cocoa mixes, tea and coffee mixes, flavouring syrups, cake and cookie mixes and doughs, pancake and muffin mixes, dessert mixes and various condiments and seasonings. The CUSMA provides for a small new TRQ of 9,600 tonnes with more flexible rules to allow all products to be made with sugar refined in Canada.

U.S. sugar policy is implemented through its Farm Bill, which is the main agriculture and food policy tool of the federal government. The main provisions of the U.S. sugar program date back to the 1981 Farm Bill. The program has been reauthorized with some changes in subsequent Farm Acts. Under the 2008 Farm Bill, U.S. sugar TRQ import restrictions were continued but with new provisions that make it more difficult for the U.S. government to increase imports at times of short supply. This is particularly the case for U.S. imports of refined sugar, which makes it almost impossible for Canada to increase exports to the U.S. unless there is an "emergency shortage". The 2014 and 2018 Farm Bills did not change these restrictions. 

For more information on U.S. sugar policy, visit:

Canada-U.S. Trade in Refined Sugar

The United States is Canada’s logical export market for the majority of Canada’s agri-food exports. However, unlike other agri-food products, Canadian sugar exports to the United States remain at low levels (about 2% of Canadian production) with only very sporadic increases at times of emergency short supply in the U.S.. Such increases are unusual as was the case in 2008 and 2010 due to hurricane damage as well as a refinery explosion and more recently a greatly reduced sugar beet crop in 2019.

Canada Exports of Refined Sugar to the United States

Year Tonnes % Canadian production
2015 24,080 2%
2016 14,085 1%
2017 17,533 1%
2018 22,818 2%
2019 31,640 2%

Canada-U.S.-Mexico Trade in Sugar-Containing Products

U.S. imports of SCPs from Mexico have grown at a much faster rate than imports from Canada since 2003 when Mexico was granted duty-free access to the US for all SCPs under the NAFTA. US imports from other countries have also grown at a faster rate given ffree trade agreements negotiated with the US. The result has been that US net imports (imports minus exports) from Mexico and other countries has grown more signficantly than for Canada. Since 2015, Mexico, Canada, and the rest of the world have improved their trade balance with the US. This largely reflects a higher priced US sugar market following US imposition of suspension agreements limiting imports of sugar from Mexico. 

US Net Imports of SCPs Sugar Content Metric Tonnes Canada Mexico Rest of World
Sugar content metric tonnes
2002 210612 152945 104399
2003 250432 151960 146548
2004 309644 184440 158864
2005 301010 240473 160841
2006 278638 340750 173454
2007 226864 280659 174982
2008 165768 297670 141973
2009 123323 284873 152995
2010 131909 324119 152954
2011 131832 319005 109157
2012 148619 312089 148187
2013 143777 326654 136394
2014 132523 306704 164930
2015 107426 329542 170460
2016 139693 391546 214882
2017 146399 390343 256497
2018 167540 429637 279461
2019 202248 443230 300128