An offshore oil rig support vessel leaves the harbour in St John's, on Feb. 2.Greg Locke/Reuters
As Canada faces the threat of steep tariffs from the United States, politicians and business leaders are renewing calls for the country to look further afield for trade partners and to rely less on our southern neighbour.
The trouble? Despite Canada signing a number of free-trade agreements over the past decade, trade diversification is arguably getting worse.
Around three-quarters of Canadian exporters sent their goods to a single country in 2023, the highest share since 2003, according to Statistics Canada figures. And that single customer is fairly obvious: Over all, nearly nine out of 10 exporters shipped their merchandise to the U.S.
On the surface, it seems that diversification peaked in 2010, when more than 30 per cent of Canadian exporters had two or more partner countries. But there was a sharp drop in the total number of exporters between 2007 and 2010, and particularly those reliant on one country. Many Canadian companies saw their U.S. business dry up when the global financial crisis hammered the American economy.
Over the past decade, Canada has signed free-trade pacts that have enhanced market access to Europe and Pacific Rim countries. But the Statscan numbers suggest that tapping these new markets can be a hard-won battle.
Another issue: the number of Canadian companies that export to begin with. Nearly 49,000 enterprises sent their goods abroad in 2023 – similar to figures in the mid-2000s. The ranks of exporters are on an upward trend, but that follows the decimation during the financial crisis.
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