The Canadian food and agriculture sector is for the most part competitive and export-oriented: although challenges and opportunities vary significantly between regions, primary agriculture benefits from an abundance of natural resources and faces limited environmental constraints. Negative environmental impacts of agriculture relate mainly to local water pollution by agricultural nutrients. Productivity growth, resulting from innovation and structural change, has driven production and income growth without significantly increasing pressure on resource use. Nonetheless, the capacity to innovate is crucial to take advantage of the growing and changing demand for food and agricultural products at the global level.