The cattle and beef sector is an important driver of economic activity in Canada. However, that is not always apparent from looking at Farm Cash Receipts alone. Overall, direct impacts constitute about a quarter to a half of the total economic impacts. Indirect impacts are created through the purchase of various inputs that are required for production in each sector (or sub-sector). Similarly, the induced impacts are a result of spending of the income received by owners of these resources, thereby creating more demand for various commodities and thus increasing production. If relative contributions of a sector are estimated using direct impacts only, it will lead to serious underestimation. One of the inferences that can be drawn from the results of the study is that the cattle sector makes a much higher contribution to the economy than what is obvious from traditional measures related to direct contribution.
The first multiplier study was completed in 1992 and was updated in 2012 to consider the expansion of the cattle feeding industry in Western Canada in the late 1990s and the expanding role of beef exports. The purpose of the 2021 update was to incorporate the structural changes that have occurred in the industry over the last decade.
The 2021 study, “Economic Impacts of Livestock Production in Canada – A Regional Multiplier Analysis”. Funded by the Beef Cattle Research Council, updated past studies to more accurately reflect the overall economic impact of the cattle and beef industry. The results take into account the industry’s total economic impacts, including direct, indirect and induced impacts from primary production as well as backward and forward linked industries with related economic activities.
Using the updated methodology, the study finds that:
For Canada in the 2018-20 period, the cattle sector had $51.6 billion in goods and sales, contributed $21.8 billion to gross domestic product at market prices, including $11.7 billion in labour income and is directly or indirectly associated with creation of 347,352 full-time equivalent jobs (includes direct, indirect and induced impacts).
The cattle sector contributes $3.35 to the Canadian GDP for every dollar of farm cash receipts.
For every worker employed in the sector, another 3.9 (based on indirect and induced impacts) workers are employed elsewhere in the economy; with an employment multiplier of 4.86 person-years on a full-time equivalent basis.
For every $1 of income received by workers and farm owners, another $6.22 are created elsewhere – resulting in an income multiplier of 7.22.
Knowing the beef cattle industry’s true economic impact is important as it provides a more complete picture of what the agriculture sector contributes as a driver of the Canadian economy.
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