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Exports

Canada Aims to Double Non-U.S. Exports, Faces Challenges in Diversifying Trade

Strategic Insights

— 2 min read

As the Canadian government seeks to diversify its trade beyond the United States, it has set an ambitious goal of doubling its non-U.S. exports over the next decade, from around $300-billion to around $600-billion. This move is driven by a desire to reduce Canada's overreliance on the U.S. market and capitalize on emerging opportunities in other regions.

Key Takeaways:

  • The federal government aims to double non-U.S. exports over the next decade, from around $300-billion to around $600-billion, as part of its efforts to diversify trade and reduce reliance on the U.S. market.
  • The goal of increasing non-U.S. exports by 50 per cent was reached in 2023, with the value of non-U.S. trade hitting $296-billion compared to $195-billion seven years earlier.
  • A significant increase in oil and gold exports, as well as a surge in foreign students from India studying in Canada, contributed to the growth in non-U.S. trade.
  • To achieve the new goal, Ottawa needs to invest in infrastructure, negotiate better market access with other countries, and support businesses and investors through taxes, regulations, or direct support measures.
  • Marc-André Roy, co-chief executive and managing partner of CPCS Transcom Ltd., emphasizes the need for a combination of infrastructure development, the production of goods that are in demand globally, and competitive market access.
  • The Association of Canadian Port Authorities estimates that Canada's ports have at least $10-billion in infrastructure needs, with only 40 per cent of this amount confirmed in funding.
  • Carlo Dade, director of International Policy at the University of Calgary's School of Public Policy, suggests that building an additional oil pipeline from Alberta to the West Coast is crucial for diversifying Canada's trade.
  • The rise of gold exports, which accounted for close to 30 per cent of Canada's increase in non-U.S. exports from 2015 to 2024, is another key driver of trade diversification.
  • However, a reversal or stagnation in the price of gold could negatively impact Canada's export picture.

Statistics:

  • The value of non-U.S. trade increased by 50 per cent between 2016 and 2023, reaching $296-billion in 2023.
  • Gold exports accounted for 29.6 per cent of Canada's increase in non-U.S. exports between 2015 and 2024.
  • Travel services exports soared 136 per cent to $61.3-billion between 2015 and 2023, driven by a surge in temporary residents from India.
  • The temporary resident population in Canada increased from 1.4 million in 2021 to 3.1 million in 2024.
  • India accounted for 35 per cent of the increase in travel exports to Canada between 2015 and 2023.

Sources:

  • [Mark Rendell and Jason Kirby, "Canada Aims to Double Non-U.S. Exports, Faces Challenges in Diversifying Trade," Globe and Mail, March 7, 2024]
  • [Government of Canada, "Trade Diversification Corridor Fund," 2024]
  • [Association of Canadian Port Authorities, "Prebudget Submission," 2024]
  • [Statcan, "Travel Services Exports, 2015-2023"]
  • [Bank of Montreal, "Doug Porter, Chief Economist, Speech," 2024]

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