The data shows diversifying Canada’s trade won’t happen overnight. But that doesn’t mean it’s not happening.
OTTAWA — Prime Minister Mark Carney pledged during the spring election campaign to reduce Canada’s economic reliance on a relationship with the United States he described as over—or at least forever changed—because of President Donald Trump’s targeted tariffs.
The Liberal government has since dialed back that rhetoric and lifted most retaliatory tariffs on U.S. goods, but Carney is still working to secure new and stronger trading relationships around the world. In October, he pledged to double exports to non-U.S. markets by 2035.
Talking Points
Canada began increasing exports to non-U.S. countries this year, but the higher price of gold makes it hard to tell how much of the shift is here to stay
International Trade Minister Maninder Sidhu said Canadian businesses are waking up to the need to reduce reliance on exports to the U.S.
Diversifying Canada’s trade will not happen overnight, though. And the country’s progress toward its goal may be slow to show up in trade data, which this year’s U.S. government shutdown delayed more than usual. The freshest information suggests the shift has just begun. Canada exported nearly $430 billion worth of goods to the U.S. from January through September of this year—the latest month for which Statistics Canada has figures available. While down about three per cent over the same period last year, Canada still sent about three-quarters of its total exports to its largest trading partner.
Still, there are signs that exports to other countries are growing, with the United Kingdom, the European Union, China, Singapore and Indonesia leading the way. The skyrocketing price of gold amid global uncertainty has played a role, but a close look at the markets where Canada’s exports increased the most suggest other, more lasting, ways to grow.
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International Trade Minister Maninder Sidhu said the country’s collective sense of urgency will help. “Canadians have woken up,” he told The Logic in a recent interview. “We are overexposed to the U.S., and we need to be able to diversify into other markets.” He recently launched consultations on trade talks with several countries, including India, but he will also announce a trade diversification strategy aimed at making better use of existing deals.
Sidhu ran a customs brokerage before entering politics, but things have changed since then. At that time, he said, businesses were disinclined to look beyond the U.S., viewing the need to adapt to unfamiliar regulations, languages and packaging requirements as not worth the risk. Now, they are asking for help as they take the plunge. Ottawa pledged $159 million over three years in the budget for trade-financing programs to assist firms trying to enter and grow in new markets
Here is what The Logic’s analysis of export data reveals about the challenges and opportunities.
Much of what glitters is actually gold
The value of Canada’s merchandise exports to the United Kingdom grew by about $9.7 billion from January to September this year—a bigger year-over-year increase than any other market. Nearly 96 per cent of that growth, however, came from exports of unwrought gold. Gold has long been Canada’s top export to the U.K., with crude oil a distant second. The price of gold has soared this year, and the U.K. is one of many countries where it is inflating the value of Canada’s outbound trade. While the value of Canada’s gold exports to the U.K. increased by nearly 58 per cent in the first three quarters of 2025, the actual quantity of gold shipped across the pond grew by just eight per cent.
Plan B: Europe
Canada’s merchandise exports to the European Union grew by just over $5 billion as of September compared to the same period last year—an increase of just over 20 per cent in customs value. Oil exports led the way, but exports of canola seeds increased more than tenfold, which is likely a result of China’s 100 per cent tariffs on the key Canadian agricultural export. Canada also significantly increased its shipments of aluminum to Europe as a result of Trump’s tariffs on the metal, which are now at 50 per cent. As The Logic reported, that shift is unlikely to last.
Canola vs. Crude
China effectively closed its market to Canadian canola this year, but crude oil is a different story. After the Trans Mountain pipeline expansion came online in May 2024, Canadian crude exports to China began to soar, especially as China moved away from U.S. oil. The value of petroleum exports to the country grew by more than 240 per cent in the first three quarters of 2025 compared to the same period last year. As the prospect of a new pipeline from the Alberta oilsands to the B.C. coast takes shape, energy is expected to play a big role in Canada’s diversification strategy.
Taking off
The value of Canada’s exports to Singapore increased by 67 per cent this year compared to the first nine months of 2024. Exports of crude oil saw the biggest increase, but some of the growth occurred in the aerospace sector, including turbojet parts, as Singapore is a global aviation hub where Bombardier operates a major aircraft maintenance centre. The sector could play a big role in other markets too. As Sidhu noted, Canada’s work to meet the new NATO target of spending five per cent of GDP on defence will also support trade diversification.
Indonesia now and next
Canada signed a free trade deal with Indonesia this year that is now before the House of Commons. Once fully implemented, the agreement would increase Canada’s annual exports to Indonesia over the long term by about $216 million, or just over five per cent, according to an economic impact assessment by Global Affairs Canada. Potential growth areas include electronics, machinery, auto parts, chemicals, metals and business services. This year, Canada’s merchandise exports to Indonesia grew by $530 million from January to September compared to the same period last year. About 31 per cent of that increase came from coal—typically used to produce steel or electricity—and 30 per cent from potassium chloride, used in potash-based agricultural fertilizers. Sidhu said Indonesia is also keen on Canadian technology that could reduce the environmental impact of mining.
