Canada's Trade Diversification: Uneven and Concentrated

Canadian cities are facing a critical question: diversify beyond the U.S. market or remain highly exposed to trade disruption. In this latest analysis, our Business Data Lab examines which Canadian cities are successfully expanding into new markets, and which are already showing signs of local economic stress tied to U.S. trade dependence. Key findings include: • Mid-sized manufacturing cities with high exposure to the U.S. market are showing signs of economic stress • Cities with more diversified export destinations are better positioned to withstand trade uncertainty • Communities tied closely to automotive and industrial exports face greater vulnerability to shifts in U.S. demand • Export diversification is emerging as an important factor in long-term local economic resilience Read the full analysis ➡️https://hubs.ly/Q04jb3Nr0 #Trade #Economy #CanadaUS #SupplyChains #BusinessData

Canada’s trade reality: diversification is harder than it sounds There’s a lot of talk about reducing reliance on the United States. It’s a reasonable goal. But the starting point matters. The U.S. isn’t just Canada’s largest trading partner it accounts for the majority of our exports. Geography, integrated supply chains, and shared infrastructure make that relationship uniquely efficient. So when we talk about diversification, the challenge isn’t intention. It’s scale. Other regions each come with trade offs: * Europe offers opportunities, but growth has been uneven and energy costs remain a factor for many industries * China is a major market for certain commodities, but trade is more complex and often concentrated in specific sectors * Many emerging markets are growing, but not yet large enough to replace U.S.-level demand in the near term This doesn’t mean diversification is impossible. It means it’s long-term work: * Building infrastructure * Expanding trade agreements * Developing sector-specific demand * Strengthening competitiveness at home And that takes years, not quarters. That’s also why the U.S. holds significant leverage in agreements like CUSMA. Not because Canada lacks options entirely but because no alternative currently matches the speed, scale, and integration of the U.S. market. The takeaway isn’t pessimism. It’s realism. Diversification is a strategy. Dependence is the starting point. #CanadianEconomy #Trade #CUSMA #GlobalMarkets #EconomicStrategy

Gooood Moooorning, TO! StatsCan's latest economic update highlights how trade tensions, slowing labour market conditions, and shifting investment patterns shaped Canada’s economy through late 2025 and early 2026. 📌 Key highlights: 🔹Real GDP contracted slightly in Q4 2025 as manufacturing and inventories weakened 🔹Exports to non-U.S. markets increased sharply as businesses diversified trade relationships 🔹Employment improved late in 2025 before weakening again in early 2026, with Ontario seeing major losses 🔹Youth unemployment remained elevated, particularly in Ontario 🔹Grocery prices continued putting upward pressure on inflation, while shelter inflation eased 🔹Household wealth continued rising, driven largely by stronger equity markets The report also points to ongoing impacts from tariffs, weaker business investment in some sectors, and continued economic uncertainty heading into 2026. Full report here 👉️🔗https://buff.ly/4reZQEZ #Toronto #Canada #Economy #LabourMarket #StatisticsCanada #Trade #Inflation #GDP #Ontario #EconomicOutlook

A small group of cities across the country drove Canada’s progress on diversifying trade in 2025, while others fell behind, says a new report from the Canadian Chamber of Commerce, reported The Canadian Press. "The report says Calgary, Ottawa-Gatineau, Toronto, Saskatoon and Kelowna, B.C., are the cities that made the strongest gains in export diversification beyond the U.S. market last year. Of the cities surveyed, Calgary and Ottawa-Gatineau posted the largest increases in exports to non-U.S. markets between 2024 and 2025 — 64.67 per cent and 64.04 per cent, respectively." https://lnkd.in/gFpsDXWV #canada #unitedstates #trade

I’m pleased to share a piece I wrote alongside Derek Eaton, on the Centre for Industrial Policy’s new Measuring What Matters dashboard. The dashboard brings together a set of indicators designed to assess Canada’s industrial performance across investment, innovation, productivity, value added, and economic complexity. In the piece, we highlight six emerging storylines from the data, including Canada’s declining economic complexity, persistent business R&D deficit, weakening manufacturing investment, and productivity challenges in key sectors such as ICT. Read the article here: https://lnkd.in/eETiKwC7

The new Centre for Industrial Policy aims to advance our conversation on industrial strategies with a data-driven approach to examine indicators of economic structure and drivers of change that get below the headline figures on GDP, employment, and inflation occupying so much our attention. This is a very modest start. As we take this work forward, we welcome your feedback. Which metrics do you find useful? Which ones might be misleading? Kudos to Matthew Kendall for his excellent work on getting this going!

As industrial policy reemerges as a central tool of economic strategy, understanding how economies invest, innovate, and generate value across sectors has never been more critical. Countries around the world are making deliberate choices about what they produce, where they invest, and which industries they want to lead. How Canada responds will define its economic future. Today, the Centre for Industrial Policy launches Measuring What Matters, a new dashboard that collects nine meaningful indicators to provide a clear overview of Canada's current situation and how it compares with its peers, digging beneath the surface of the economy to provide insights into longer-term dynamics and structural change. The data reveals a growing divergence within the Canadian economy. Some resource-based sectors are capturing more domestic value and attracting investment, but there are signs of sustained erosion in manufacturing and advanced industries, including automotive, raising harder questions about Canada's trajectory on innovation and productivity. Explore the full dashboard here: https://lnkd.in/eCRhDi9V Derek Eaton and Matthew Kendall walk through six storylines emerging from the data. Check out their insights at here: https://lnkd.in/e9yW-5wX #CanadianEconomy #IndustrialPolicy #MeasuringWhatMatters

All countries practice industrial policy. But how do we know if it is working? We are very pleased to introduce this data dashboard as an ongoing project under the newly launched Centre for Industrial Policy. The aim of the Centre is to advance the level of conversation on industrial policy in Canada, including how we define, measure, and assess its effectiveness. These indicators are just some of the elements from Bentley Allan's broader discussion of a framework for industrial policy: https://lnkd.in/ePj9xWyn This dashboard (like the four research briefs that accompanied the Centre's April launch) is intended as a starting point for facilitating a more robust national dialog on how improving Canada's approach to industrial policy can ultimately improve Canadian prosperity. Stay tuned for more research briefs, projects like this, webinars, and more.

A new Canadian Chamber of Commerce report confirms Calgary led all Canadian cities in non-U.S. export growth in 2025 — up 64.67% year over year. Nearly double Toronto's growth and four times the national average. What makes that number striking is the context. A year ago, Calgary was flagged as one of Canada's most tariff-exposed cities, with 97% of exports heading to the U.S. That vulnerability didn't slow us down — it accelerated the pivot. As the Chamber's CEO Candace Laing put it: "Canada does not just need more trade — it needs more traders." 📰 https://bit.ly/43yxHPh Calgary Economic Development Invest Alberta Ireland Canada Business Association #Calgary #Alberta #TradeAlberta #ExportDiversification #CanadianBusiness

The Great Lake Economy is an economic powerhouse. It accounts for more than 50% of all U.S./Canadian bilateral border trade and sees over 200 million tons of cargo shipped annually. https://lnkd.in/evH8s3P7