Innovation is considered one of the critical determinants for improved competitiveness and economic performance of the food processing industry, if Canada is to meet the challenges of the rapidly changing global food market and to exploit niche markets for products and remain competitive in the long run. The report provides useful information about innovation in the food processing industry by examining the nature and extent of innovation, drivers behind its implementation, the challenges facing innovating establishments and the significance of support services. The report shows that the tendency of establishments to conduct R&D or innovate may be influenced by their characteristics, and there are several challenges to innovation.