Canada's Trade Diversification Efforts Yield Mixed Results, Report Reveals

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A recent report from the Canadian Chamber of Commerce highlights the uneven progress of Canadian cities in diversifying trade away from the U.S. market, with some cities excelling while others lag behind.

OTTAWA — A newly released report from the Canadian Chamber of Commerce indicates that a select group of cities in Canada has successfully advanced in diversifying their trade in 2025, while many others have not kept pace. The report identifies Calgary, Ottawa-Gatineau, Toronto, Saskatoon, and Kelowna, B.C., as the cities that made the most significant strides in expanding their exports beyond the U.S. market last year.
According to the findings, Calgary and Ottawa-Gatineau recorded the most substantial increases in non-U.S. exports, with growth rates of 64.67% and 64.04%, respectively. Toronto followed with a 32.82% rise in exports to non-U.S. markets, while Saskatoon and Kelowna experienced increases of 32.04% and 28.63%, respectively. On a national scale, Canada saw an overall increase of 16.8% in non-U.S. exports.
The report emphasizes that this small group of cities accounts for a disproportionate share of Canada's recent gains in export diversification, highlighting the uneven nature of trade adjustments across different regions of the country. In contrast, many other cities have not experienced similar growth. Manufacturing hubs in Ontario, such as Oshawa, London, and Kitchener-Cambridge-Waterloo, continue to struggle with weaker overall trade performance and limited momentum towards diversification.
“Regions that are heavily integrated with the U.S. market are showing some of the clearest signs of economic stress related to trade,” the report notes. While certain cities are effectively expanding into global markets and building more robust export bases, others remain vulnerable to U.S. demand, trade disruptions, and uncertainty in policy.
The Canadian Chamber of Commerce had previously warned that cities like Calgary, Saint John, N.B., and Windsor, Ont., would likely be among the hardest hit by U.S. tariffs. In contrast, cities such as Victoria and Halifax have been less affected due to their stronger ties to Asian and European markets. The latest report suggests that this exposure is now manifesting in local economic conditions, although the outcomes are not entirely consistent with prior predictions.
The federal government aims to double non-U.S. exports over the next decade, with a recent economic update revealing that non-U.S. goods and services exports rose by $33 billion from 2024 to 2025. As the Canada-U.S.-Mexico Agreement on trade approaches a review this year, U.S. President Donald Trump continues to impose various tariffs on countries, affecting Canadian exports, particularly in sectors such as steel, aluminum, automobiles, and cabinetry.
The latest report references Statistics Canada data indicating that many Canadian businesses are adapting cautiously to U.S. tariffs instead of making significant changes to their operations. Although there has been a marked increase in non-U.S. exports between 2024 and 2025, much of this growth can be attributed to existing exporters enhancing their market reach rather than new companies entering global markets. The number of Canadian exporters to non-U.S. markets grew by only six percent year over year.
The report highlights that while fewer businesses report taking no action compared to the previous year, a relatively small number are actively diversifying their sales or suppliers outside the U.S. Instead, many firms are opting to raise prices, increase domestic sourcing, or postpone expansion plans.
Data suggests that many businesses remain hopeful for stabilization in Canada-U.S. trade conditions, despite the increasingly fragmented and unpredictable global trading environment. The report warns that trade conditions are likely to remain volatile and uncertain moving forward, with the ability to adapt largely depending on the firms' operational locations, production types, and reliance on single markets.
Approximately 90 percent of non-exporting Canadian businesses still view their operations as local. The report cautions that Canadian firms may be underinvesting in long-term diversification at a critical moment when resilience and market expansion are paramount for competitiveness and growth. For Canada to achieve structural diversification, a broader participation of firms, especially small and medium-sized enterprises, in global trade is essential.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, stated that while the trade relationship with the United States is vital, the findings underscore the importance of diversifying trade. “Some Canadian cities are adapting swiftly to the challenges posed by recurring global economic shocks, while others remain highly vulnerable to U.S. policy and demand uncertainties,” she remarked. “Canada needs not just more trade, but more traders.”

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