Uneven Gains in Export Diversification
Canada's efforts to broaden its international trade relationships beyond the United States are yielding mixed results, according to a recent report from the Canadian Chamber of Commerce. While overall exports to non-U.S. markets saw a notable increase between 2024 and 2025, much of this growth is attributed to existing exporters expanding their reach rather than new businesses entering global markets. The report highlights that the number of Canadian exporters selling to non-U.S. markets grew by only six percent year-over-year, suggesting a cautious adaptation strategy among many Canadian firms.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, emphasized that while the trade relationship with the U.S. remains crucial, resilience in the face of global economic shocks increasingly depends on diversification. "Some Canadian cities are adapting quickly to this era of repeated global economic shocks, while others remain highly exposed to U.S. policy and demand uncertainty," Laing stated. "Canada does not just need more trade — it needs more traders."
Cities Leading the Diversification Charge
The report identifies Calgary and Ottawa-Gatineau as frontrunners in export diversification, posting the largest increases in exports to non-U.S. markets between 2024 and 2025, with gains of 64.67 percent and 64.04 percent, respectively. Toronto followed with a 32.82 percent increase, alongside Saskatoon (32.04 percent) and Kelowna, B.C. (28.63 percent). Nationally, non-U.S. exports increased by 16.8 percent. These cities are disproportionately contributing to Canada's recent export diversification gains, underscoring the uneven nature of this trade adjustment across the country.
Conversely, manufacturing regions in Ontario, including Oshawa, London, and Kitchener-Cambridge-Waterloo, are showing signs of trade-related economic stress. These areas, highly integrated with the U.S. market, have experienced weaker overall trade performance and limited diversification momentum. Instead of fundamentally repositioning their operations, many Canadian businesses are opting for strategies such as raising prices, increasing domestic sourcing, or delaying expansion plans, according to recent Statistics Canada data cited in the report.
Economic Outlook and Future Strategies
This report emerges amidst broader economic discussions in Canada. Consumer confidence has stabilized, remaining above the 50-point mark, indicating a cautious optimism regarding job security and household finances, though broader economic prospects remain subdued. The Business Development Bank of Canada (BDC) is also actively investing in dual-use technology innovators to strengthen Canada's defence capabilities, signaling a focus on technological advancement and economic sovereignty.
Furthermore, Prime Minister Mark Carney is undertaking a visit to New York City to position Canada as a premier investment destination, highlighting the nation's energy resources, skilled workforce, and competitive tax environment. These initiatives aim to attract foreign investment and bolster the Canadian economy. However, the report on trade diversification suggests that a more targeted approach may be needed to ensure that the benefits of global trade are more broadly distributed across all Canadian regions and industries, fostering a more resilient national economy.