How natural gas dependence exposes a regional supply chain gap
Energy security debates generally ask whether fuel and electricity remain available to households and industry. That focus overlooks fertilizer. Natural gas is the principal feedstock for ammonia, the basis of mineral nitrogen fertilizer, so gas shocks reach agriculture through cost and availability. If fertilizer misses the crop calendar, farmers may reduce or forgo applications, with effects appearing later in yields and food supplies. This delayed transmission makes fertilizer dependence a national preparedness issue, not merely an agricultural one.
Canada appears insulated: it has abundant natural gas, produces nitrogen fertilizer, and is the world’s largest potash producer. Yet nitrogen production is concentrated in the West, while Eastern suppliers have relied on imports because delivery by sea is cheaper than rail from Western plants. Canada can therefore export fertilizer while Eastern agriculture remains exposed to foreign production, ports, shipping routes, and narrow delivery windows.
The issue is not national scarcity, but whether the right product can reach the right region at a workable price during disruption. In 2024, UN Trade and Development reported that Suez Canal transits had fallen 42 per cent and Panama Canal transits 49 per cent from their peaks. Although these are not Canada’s only routes, the episode showed how quickly maritime capacity can contract. Fertilizer thus exposes the gap between national production and regional resilience.
From gas markets to farm inputs
Natural gas supplies ammonia’s hydrogen and much of its production energy. The International Energy Agency estimates that gas underpins just over 70 per cent of global ammonia production and that roughly 70 per cent of ammonia becomes fertilizer. Gas is therefore a major cost, although demand, export restrictions, shipping, plant outages, and market concentration also shape prices.
High gas prices alone do not cause shortages or smaller harvests; the risk rises when pressures converge. A gas shock can raise costs or curtail output, export restrictions can narrow replacement supply, and port or rail disruption can consume the weeks remaining before application. FAO found that fertilizer prices in 2021–22 rose with energy prices and were pushed further by trade restrictions and volatile transportation costs. Farmers can use inventories, buy earlier, reduce applications, or shift acreage, but once fertilizer misses its crop-specific window, a later cargo cannot restore that season’s yield. Energy-price pressure can thereby become a physical shortage and, months later, lower output or higher food prices.
Canada produces fertilizer but access remains regional
Canada’s fertilizer position varies by nutrient. Potash is mined, and Canada accounted for 32 per cent of global production in 2023. Nitrogen is manufactured using natural gas. Canada has no active phosphate mines and relies mainly on the United States for phosphorus. Aggregate industry size does not ensure regional access to every nutrient.
Nitrogen provides the clearest energy-security case. Agriculture and Agri-Food Canada describes Canada as a marginal net exporter, with production concentrated in the West. Eastern Canada imports nitrogen because sea delivery is significantly cheaper than rail from Western plants. Russia supplied 39 per cent of Eastern Canada’s nitrogen fertilizer imports in 2021—654,509 tonnes worth approximately $356 million. After the invasion, distributors secured replacement supplies from the United States, North Africa, and the Caribbean, but at higher cost.
That adjustment reduced dependence on Russia and showed that importers can adapt. Yet Eastern Canada still depends on foreign production, ports, and timely delivery, while Western output can move east only if distance, rail capacity, price, and timing permit. Domestic production is capacity, not a contingency plan.
Nor is a public stockpile a good fit: requirements vary by crop and region, while storage creates safety, cost, and product-matching problems. A domestic-purchasing mandate would replace foreign dependence with a rail bottleneck. Canada instead needs multiple commercially and physically viable supply routes.
A preparedness gap rather than an absence of action
Canada has acted. Agriculture and Agri-Food Canada monitored fertilizer supply and affordability, Eastern distributors secured non-Russian supplies, and Ottawa funded transportation improvements and established the National Supply Chain Office. The 2026 National Food Security Strategy recognizes the need for reliable crop inputs and would speed approvals, use evidence from trusted jurisdictions to register critical inputs, and explore Atlantic natural gas for future fertilizer production.
These measures address regulatory delays and long-term capacity, but not regional supply interruption. The Strategy neither assigns an owner to map fertilizer flows nor tests whether western railways or eastern ports could absorb diverted supply, pre-arrange alternatives, or sets emergency thresholds. Routine monitoring cannot establish how quickly importers could switch origins while rail and port capacity remain available; general transportation investments do not prioritize fertilizer within a short agricultural window. Closing that operational gap requires three steps using existing assets and suppliers.
First, Canada should assess fertilizer flows by product, region, and season. Data from producers, importers, farmers, railways, ports, and governments would reveal concentrated dependencies, routes without substitutes, and redirection times. Stress tests should determine whether Western nitrogen could move east, and Eastern ports could receive alternative supplies during a broader shortage.
Finland offers a model. During the 2022 fertilizer shock, its National Emergency Supply Agency combined private-sector information, alternative sourcing, and reserves of fertilizer raw materials. Its TIETO26 exercise brings more than 180 public and private organizations together to test food-supply continuity. Canada should not copy the reserves: varying regional and crop requirements make large finished-product stocks costly, difficult to match, and hazardous to store. The transferable practices are shared information, pre-arranged alternatives, and pre-crisis exercises.
Second, diversification should be routine, not emergency improvisation. Private firms should choose suppliers, while customs, inspection, ports, and transportation systems remain able to handle established sources from several regions. Officials should know which alternatives are commercially viable. Temporary support may be justified when disruption threatens planting; higher costs alone do not justify permanent subsidies.
Third, the contingency plan needs an institutional owner. Agriculture and Agri-Food Canada understands farm demand and fertilizer markets, but the risk spans trade, customs, ports, railways, and emergency coordination. The National Supply Chain Office is the logical coordinator, with AAFC responsible for agricultural analysis and Transport Canada for route capacity. The Canadian Food Inspection Agency must also participate because imports may require registration before sale. Together, they should maintain a shared picture of critical flows and determine which department acts when a defined threshold is crossed.
Those thresholds should reflect viable suppliers, inventories, time before application, and alternate-route capacity. When markets cannot restore access within the agricultural window, action could include expedited regulatory processing, temporary financing, transport priority, or coordination with the United States and other suppliers. The objective is to prevent a short logistics failure from costing a planting season.
Conclusion
Canada’s fertilizer industry provides capacity, not immunity. Geography, product differences, and transportation economics leave Eastern farmers exposed in ways national totals obscure. Importers adapted after 2022 because alternative suppliers and functioning routes remained available in time. Canada therefore needs neither self-sufficiency nor permanent intervention, but a preparedness framework that maps regional flows, diversifies routes, assigns a contingency plan, and sets thresholds for temporary action. This would give practical effect to NATO’s expectation that Allies understand critical inputs and cross-sector dependencies without involving the Alliance in procurement. Fertilizer marks the boundary of conventional energy-security planning: keeping gas available is insufficient if the inputs and transportation networks that turn it into food production cannot withstand the same disruption. Planning for that second-order effect turns capacity into resilience.
