Canada Aims to Double Non-U.S. Exports in a Decade Amid Shifting Trade Landscape

Strategic Insights -

Canada set a goal of increasing overseas exports by 50 per cent by 2025 to reduce its reliance on the U.S. market, and it reached that goal last year with $296-billion in non-U.S. trade. Now, Prime Minister Mark Carney is aiming to double non-U.S. exports over the next decade, from around $300-billion to $600-billion, citing the need to diversify trade in a continental market upended by President Donald Trump. However, Canada's ability to hit its goal depends on various factors, including foreign demand, competition, and investment in infrastructure.

Key Takeaways:

  • The federal government's goal of increasing non-U.S. exports by 50 per cent by 2025 was reached last year, with the value of non-U.S. trade hitting $296-billion compared to $195-billion seven years ago.
  • The surge in oil and gold exports, alongside a jump in foreign students from India studying in Canada, contributed significantly to Canada's non-U.S. trade growth.
  • Ottawa aims to double non-U.S. exports over the next decade, from around $300-billion to $600-billion, with Prime Minister Carney highlighting the need to diversify trade in a continental market disrupted by President Trump.
  • Key factors influencing Canada's ability to hit its goal include foreign demand, competition, and investment in infrastructure.
  • Recent idiosyncratic factors, such as the price of gold or the number of foreign students, could significantly impact Canada's diversification hopes.
  • Governments don't trade; the private sector does, and Ottawa needs to change the playing field by investing in infrastructure, negotiating better market access, and nudging businesses and investors through taxes, regulations, or direct support measures.
  • Ottawa has announced a $5-billion Trade Diversification Corridor Fund and stated its intention to fast-track "nation building" projects through its new Major Projects Office.
  • Canada's ports have at least $10-billion in infrastructure needs, with only 40 per cent of the required funding confirmed, and the number could rise to $21-billion through 2040.
  • Canadian companies are jetting around the world to promote business opportunities, including getting included in European defence supply chains and striking deals around critical minerals.
  • Carlo Dade, director of International Policy at the University of Calgary's School of Public Policy, suggests building another oil pipeline from Alberta to the West Coast as a crucial factor in diversifying Canada's trade.
  • Energy products and gold have been the primary drivers of Canada's non-U.S. trade growth, but a reversal or stagnation in the price of gold would crimp Canada's export picture.

Statistics:

  • Canada's non-U.S. trade reached $296-billion last year, exceeding the goal of a 50 per cent increase by 2025.
  • The value of non-U.S. trade in 2018 was $195-billion, compared to $296-billion in 2025.
  • Gold accounted for close to 30 per cent of Canada's increase in non-U.S. exports from 2015 to 2024, with most of it going to the United Kingdom.
  • The rise in precious metal prices has made it so gold and silver combined now match exports of cars and light trucks at around $58-billion.
  • Travel services delivered a significant boost to Canada's non-U.S. exports over the last decade, with Canada's travel exports soaring 136 per cent to $61.3-billion between 2015 and 2023.

Sources:

  • "Canada Makes $296b Non-US Trade Surpass Goal", By Mark Rendell, Jason Kirby
  • Statistics Canada data
  • Association of Canadian Port Authorities
  • Bank of Montreal chief economist Doug Porter
  • Statscan data
  • University of Calgary's School of Public Policy