Despite being an agricultural powerhouse, Canada is losing ground as a supplier of food products to the rest of the world, says a new report from the Canadian Agri-Food Policy Institute.

Last year Canada imported $6.3 billion more food products and beverages than it exported — and the deficit has grown steadily since 2004 when it was $1 billion, says the report by former Agriculture Canada economist Doug Hedly. The biggest portion of the deficit, $3.7 billion, is in the trade in beverages, spirits and vinegar. Food products account for the remainder.

While the rising loonie is an obvious cause, the report says other factors — such as a drop in investment — may be at play and the situation merits a full investigation.

“There are companies that are growing and investing, but we need to better understand the implications of sustained and deepening trade deficits for the future competitiveness of the processed food sector and the agri-food sector as a whole,” said David McInnes, head of the institute.

But some industry officials say more than study is needed.

Ottawa needs to do more to support the food-processing sector, said Derek Nighbor, a senior vice-president of Food and Consumer Products Canada.

“Canada’s food and beverage manufacturing industry has the opportunity to be one of the strongest in the world,” he said. “We have the water, the land and the people, but the industry is facing some serious challenges and we need additional support from the federal government to help our industry become a global leader.”

The head of the Food Processors of Canada said the report “reflects what we see happening on the ground — fewer mid-size Canadian companies, fewer branch plants, more imports, fewer exports.”

“Executives claim that all inputs are higher in Canada than in the United States and a par dollar is disastrous,” said Christopher Kyte.

Boosting homegrown consumption with a workable Product of Canada label system would help, added Ron Davidson, director general of the Canadian Meat Council.

The government doesn’t even enforce “regulations that require imported prepackaged meat to properly display the country of origin,” he said.

“A significant volume of improperly labelled imported meat is reported in many retail locations across Canada.”