Water is becoming one of the hard limits on how much food the world can reliably produce. For Canada and its trading partners, that turns water into a constraint that shapes resilience, trade strategy and security.
How Water is Moving Up The Security Agenda
Across countries, water is moving from background resource to strategic constraint on economic resilience and stability. Agriculture accounts for roughly 70% of global freshwater withdrawals, so any strain on water shows up first and hardest in food systems. FAO’s latest land-andwater work suggests that feeding close to 10 billion people by 2050 will require about 50% more food than in 2012 and roughly a quarter more freshwater for agriculture, even as many breadbaskets are already under pressure. A growing share of the world’s food now comes from regions where water is either scarce or unreliable, leaving less margin when something goes wrong.
Around onequarter of global crop production takes place in areas facing water stress or high variability, with staples like wheat, rice and maize especially exposed. Much irrigated output already comes from highly stressed basins, and rainfed agriculture depends on increasingly erratic rainfall. When something goes wrong in those regions, such as drought, heat, or conflict, the effects travel quickly through prices, trade routes and political stability. That is the backdrop for how allies, import-dependent states and markets are reassessing what they mean by “reliable” supply.
Source: World Resources Institute
Virtual water trade is part of the same story. When waterscarce countries import cereals or meat, they are effectively importing the water used to produce them. This “virtual water” strategy is often cheaper and more feasible than large interbasin transfers. In the Middle East and North Africa, where countries hold only a small share of global renewable freshwater but support a much larger share of the world’s population, dependence on embedded water is now a permanent feature of food security and foreign policy. Gulf states import most of their food and treat corridor reliability, diversification and insurance as standing nationalsecurity concerns. From a Canadian or allied perspective, that matters because foodimporting partners are effectively shopping for reliability as well as volume, and they know that some big exporters are themselves running out of hydrological slack.
Exporters face a risk as well in this context. While trade reduces water scarcity for many people overall, more than half of individual links still increase water stress somewhere in the network, and several of the largest virtualwater exporters already operate under high or rising stress.
At the sharp end, water insecurity is now visible as open conflict. The Pacific Institute records hundreds of waterrelated violent incidents per year, with 420 logged in 2024, and highprofile cases such as the destruction of Ukraine’s Kakhovka Dam and attacks on water systems in Sudan, Syria and Gaza have turned water weaponization into a recurring feature of modern warfare. For NATO members and partners, the message is clear: water and waterdependent food flows shape stability in key regions and the reliability of global markets that allies depend on.
Figure: +1400 Water conflict incidents catalogued from 2020 to present
Source: Pacific Institute
Markets are moving in the same direction. Big food companies, banks and insurers are starting to look at water the way they look at cyber or labour risk: as something that can disrupt supply, not just an environmental issue. They are asking where the water behind a product comes from, how stressed those regions already are, and what happens if a key basin faces drought or restrictions. That shift is raising the bar for exporters. Buyers increasingly expect suppliers to know where their water exposures sit, to manage them, and to be open about the pressures in their supply chains, rather than quietly passing those risks along to producing regions.
Canada’s Position in a Tightening Water Economy
Canada is waterrich by global standards, holding about 20% of the world’s surface freshwater and roughly 9% of renewable supplies. Only a portion is renewed annually, and much of the flow runs north toward sparsely populated Arctic regions while most people and farms are in the south. Canada is also a major net exporter of virtual water. Net exports are in the tens of billions of cubic metres per year, largely embedded in grains, livestock and fuels, with the United States as the dominant destination. Given these realities, freshwater should be treated as national capital rather than an inexhaustible inheritance. For allies and buyers looking for dependable suppliers in a tightening water economy, that is part of how Canada’s value is being judged.
The drought signal in Canadian agriculture is already clear. By late 2025, more than 80% of the Prairie region was classified as abnormally dry or in drought, with large areas of Saskatchewan and Alberta in severe to extreme categories and many producers facing stunted crops and repeated forage failures. Over time, yield declines for some crops in parts of the Prairie ecozone are linked to shifting precipitation, higher evaporative demand and more extremes. In a trading system where reliability is a competitive asset, multiyear dryness is both a production risk and a reputational one.
That reliability also depends on how shared waters are governed. The 1909 Boundary Waters Treaty and later agreements constrain largescale diversions and frame cooperation in a basin that holds a significant share of the world’s fresh surface water. Recent talk from the Trump administration about reopening or “tearing up” elements of the Great Lakes regime, and about redirecting Canadian water south, shows how quickly these arrangements can be pulled into wider bargaining, even as governors and provinces push back. In a world where water is more plainly strategic, those regimes function as sovereignty tools as much as environmental agreements.
Institutionally, Canada has begun to adjust. The Canada Water Agency, launched as a standalone federal entity in 2024, is tasked with coordinating freshwater initiatives across departments and working with provinces, territories and Indigenous partners on monitoring, data and program design. In parallel, the Carney government’s “From reliance to resilience” agenda, reflected in Budget 2025, frames tradeenabling infrastructure, supplychain diversification and corridor funding as nationalsecurity tools, choices that decide which basins and routes carry Canada’s role as a virtualwater supplier and how exposed they are to drought and lowwater disruptions. These are important shifts, but they still fall short of a full strategy that treats freshwater itself as a strategic asset the way it does, say, energy or defence procurement.
For a Canadian reader, the implication is direct. Freshwater availability, variability and governance now set the terms of Canada’s competitiveness and its reliability to food-importing partners. Agriculture is one of the sectors shaped by that reality. Because freshwater is a core criterion by which Canada’s agri-food reliability is judged, it has to be governed and communicated as strategic capital.
Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada.
