Canada Trade Diversification: What It Really Means

Calgary, Ottawa-Gatineau, Toronto, Saskatoon, and Kelowna, B.C., are the cities that made the strongest gains in export diversification beyond the US market in 2025.
Non-US exports increased by 16.8% countrywide, with Calgary and Ottawa-Gatineau posting the largest increases at 64.67% and 64.04%, respectively.
The federal government aims to double non-US exports over the next decade, with non-US goods and services exports increasing by $33 billion in 2025 over 2024.
Many Canadian firms are adapting cautiously to US tariffs, with few actively diversifying sales or suppliers outside the US.
About 90% of non-exporting Canadian businesses still describe their operations as 'local', highlighting the need for more firms to participate in global trade.

The recent report from the Canadian Chamber of Commerce highlights the progress made by some Canadian cities in diversifying their trade beyond the US market. The report notes that Calgary, Ottawa-Gatineau, Toronto, Saskatoon, and Kelowna, B.C., are the cities that made the strongest gains in export diversification beyond the US market in 2025. This is significant, as the federal government has set out to double non-US exports over the next decade. The government's spring economic update reported that non-US goods and services exports increased by $33 billion in 2025 over 2024.

The report also highlights the challenges faced by many Canadian cities, particularly those in Ontario, which continue to face weaker overall trade performance and limited diversification momentum. The manufacturing regions in Ontario, including Oshawa, London, and Kitchener-Cambridge-Waterloo, are showing signs of trade-related economic stress. These cities remain heavily tied to the US market, while growth in exports outside the US has been limited or insufficient to offset broader weakness in trade activity and local economic conditions.

Canada Trade Diversification: The Full Story Explained

The Canadian Chamber of Commerce report provides a detailed analysis of the trade diversification efforts made by Canadian cities. The report notes that the data points to a 'growing divergence' in local trade performance across Canada. Some cities are successfully expanding into global markets and building more diversified export bases, while others remain more exposed to US demand, trade disruptions, and policy uncertainty.

The report also highlights the impact of US tariffs on Canadian businesses. The Canada-US-Mexico Agreement on trade is due for a review this year, and US President Donald Trump has used different tools to hit countries around the world with tariffs. Canada is being hammered by Trump's sector-specific duties on steel, aluminum, automobiles, and cabinetry. The report notes that many Canadian firms are adapting cautiously to US tariffs, with few actively diversifying sales or suppliers outside the US.

Historical Context: Has This Happened Before?

The current trade diversification efforts made by Canadian cities are not new. In the past, Canada has faced similar challenges in diversifying its trade beyond the US market. The report notes that the federal government's aim to double non-US exports over the next decade is ambitious, but it is not without precedent. In the 1990s, Canada faced a similar challenge in diversifying its trade beyond the US market, and the government implemented various policies to support trade diversification.

One notable example is the Canada-Chile Free Trade Agreement, which was signed in 1997. The agreement aimed to increase trade between Canada and Chile, and it has been successful in doing so. The report notes that the agreement has increased trade between the two countries, with Canadian exports to Chile increasing by over 500% since the agreement was signed. This example highlights the potential benefits of trade diversification and the importance of implementing policies to support it.

Canada Trade Diversification: Economic & Real-World Impact

The economic and real-world impact of trade diversification efforts made by Canadian cities is significant. The report notes that the cities that have made the strongest gains in export diversification beyond the US market have seen significant economic benefits. For example, Calgary and Ottawa-Gatineau have seen significant increases in non-US exports, which has contributed to their economic growth.

On the other hand, the cities that have not made significant gains in trade diversification have faced economic challenges. The manufacturing regions in Ontario, including Oshawa, London, and Kitchener-Cambridge-Waterloo, are showing signs of trade-related economic stress. These cities remain heavily tied to the US market, while growth in exports outside the US has been limited or insufficient to offset broader weakness in trade activity and local economic conditions.

Expert Analysis & What Comes Next

According to

Candace Laing, president and CEO of the Canadian Chamber of Commerce, 'Canada's trade relationship with the United States will always matter deeply, but the research shows resilience increasingly depends on the ability to diversify.' She notes that 'some Canadian cities are adapting quickly to this era of repeated global economic shocks, while others remain highly exposed to US policy and demand uncertainty.' Laing emphasizes that 'Canada does not just need more trade — it needs more traders.'

The report highlights the need for more firms to participate in global trade. The report notes that about 90% of non-exporting Canadian businesses still describe their operations as 'local', highlighting the need for more firms to participate in global trade. The report also notes that many Canadian firms are adapting cautiously to US tariffs, with few actively diversifying sales or suppliers outside the US.

What This Means For You: Practical Guidance

If you are a business owner, the report's findings have significant implications for your operations. The report notes that the ability to adapt to changing trade conditions depends on where firms operate, what they produce, and how dependent they are on a single market. The report emphasizes the need for businesses to diversify their exports and reduce their dependence on the US market.

If you are an investor, the report's findings have significant implications for your investment decisions. The report notes that the cities that have made the strongest gains in export diversification beyond the US market have seen significant economic benefits. The report emphasizes the need for investors to consider the trade diversification efforts made by Canadian cities when making investment decisions.

Frequently Asked Questions

What is the current state of Canada's trade diversification efforts?

The current state of Canada's trade diversification efforts is mixed. Some Canadian cities, such as Calgary, Ottawa-Gatineau, Toronto, Saskatoon, and Kelowna, B.C., have made significant gains in export diversification beyond the US market. However, other cities, particularly those in Ontario, continue to face weaker overall trade performance and limited diversification momentum.

What are the benefits of trade diversification for Canadian businesses?

The benefits of trade diversification for Canadian businesses are significant. Trade diversification can help businesses reduce their dependence on a single market, increase their exports, and improve their competitiveness. The report notes that the cities that have made the strongest gains in export diversification beyond the US market have seen significant economic benefits.

What are the challenges faced by Canadian businesses in diversifying their trade?

The challenges faced by Canadian businesses in diversifying their trade are significant. The report notes that many Canadian firms are adapting cautiously to US tariffs, with few actively diversifying sales or suppliers outside the US. The report also notes that about 90% of non-exporting Canadian businesses still describe their operations as 'local', highlighting the need for more firms to participate in global trade.

What is the federal government's policy on trade diversification?

The federal government's policy on trade diversification is to double non-US exports over the next decade. The government's spring economic update reported that non-US goods and services exports increased by $33 billion in 2025 over 2024. The government has also implemented various policies to support trade diversification, including the Canada-Chile Free Trade Agreement.

What are the implications of the report's findings for investors?

The implications of the report's findings for investors are significant. The report notes that the cities that have made the strongest gains in export diversification beyond the US market have seen significant economic benefits. The report emphasizes the need for investors to consider the trade diversification efforts made by Canadian cities when making investment decisions.

In conclusion, the report's findings highlight the need for Canadian businesses to diversify their trade beyond the US market. The report notes that some Canadian cities have made significant gains in export diversification, while others continue to face challenges. The federal government's policy on trade diversification is to double non-US exports over the next decade, and the report emphasizes the need for more firms to participate in global trade. As an investor or business owner, it is essential to consider the trade diversification efforts made by Canadian cities when making investment or operational decisions.

Matthew Perry Death: Sentencing of Kenneth Iwamasa