Is Canada's Trade Pivot Leaving Some Cities Behind
Ottawa, Ontario--(Newsfile Corp. - May 27, 2026) - In 2025, long-standing assumptions about the stability of Canada's trade relationship with the United States were seriously challenged. How businesses responded often depended on how exposed local economies were to U.S. supply chains and how easily businesses could simply shift toward new markets. Early in 2025, the Canadian Chamber's Business Data Lab (BDL) analyzed which cities could be most affected, due to their integration and possible exposure levels in the case of trade shocks.
With 2025's data now in hand, our new analysis examines how Canadian Census Metropolitan Areas (CMAs) are responding to changing global trade conditions one year after tariffs and trade barriers disrupted North American trade flows.
Findings
This new research from BDL finds that while Canada's exports are increasingly shifting beyond the United States, much of the country's trade diversification is being driven by a relatively small number of cities, firms and sectors — leaving many communities vulnerable to ongoing U.S. trade uncertainty.
- The research identifies Calgary, Ottawa-Gatineau, Toronto, Saskatoonand Kelowna as among the cities making the strongest gains in export diversification beyond the U.S. market.
- At the same time, several highly U.S.-integrated manufacturing regions — including Oshawa, London and Kitchener-Cambridge-Waterloo — are showing some of the clearest signs of trade-related economic stress, with weaker trade performance and limited diversification momentum.
- The analysis finds that exports to non-U.S. markets rose sharply between 2024 and 2025, but much of that growth came from existing exporters expanding their reach rather than new firms entering global markets. Non-U.S. exports increased 17%, while the number of exporters grew far less.
- Roughly 90% of non-exporting businesses still describe their operations as "local" in nature, despite many potentially having international growth opportunities.
- The analysis also highlights that many Canadian firms continue to respond cautiously to trade uncertainty. Rather than fundamentally repositioning operations or diversifying internationally, businesses are more likely to raise prices, increase domestic sourcing or delay expansion plans.
According to the research, Canada's long-term diversification challenge is not only about market access but also about helping more businesses see international growth as achievable and necessary in an increasingly fragmented global economy.
Quotes
"Canada's trade relationship with the United States will always matter deeply, but this research shows us that resilience increasingly depends on our ability to diversify," said Candace Laing, President and CEO of the Canadian Chamber of Commerce. "Some Canadian cities are adapting quickly to this era of repeated global economic shocks, while others remain highly exposed to U.S. policy and demand uncertainty. Canada does not just need more trade — it needs more traders. The challenge now is ensuring more businesses and communities have the tools, agency and confidence to break out of the 'domestic comfort trap' and compete globally by better understanding where demand for Canadian goods and services already exists."
"Small to medium sized businesses are 99% of all businesses, and their ability to connect globally is a linchpin in our economic diversification strategy," said Matthew Holmes, Executive Vice President and Chief of Public Policy at the Canadian Chamber of Commerce. "To broaden our capacity to trade, the data shows where there is a growing divide between cities that are successfully expanding into global markets and those that remain heavily dependent on a single trading partner. In today's environment, diversification is increasingly essential."
"Canada's trade patterns are changing, yet it is understandably uneven and not instantaneous," said Patrick Gill, Vice President of the Business Data Lab. "If a relatively concentrated group of cities, sectors and firms are the only ones diversifying, we are not seeing the kind of needed broad-based movement that will make us more economically resilient, productive and prosperous. Some local economies are adapting to a more fragmented global trading environment much faster than others, while many businesses still appear to be waiting for a return to pre-tariff normalcy."
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Key resources:
About the Business Data Lab (BDL)
Turning the overwhelming amount of economic data out there into actionable insights is a challenge for many organizations. That's why the Business Data Lab (BDL), launched in February 2022 by the Canadian Chamber of Commerce, provides free tools and real-time insights that help organizations understand Canada's economy as it is now and as it could be in the future. With support from Statistics Canada and funding from Innovation, Science and Economic Development Canada, BDL strives to ensure that rapid economic change and shifting business dynamics don't leave Canada's decision-makers behind. BDL is democratizing data on Canadian business conditions. By providing future-focused, real-time, and local insights, we help organizations better understand and navigate the Canadian economy.
About the Canadian Chamber of Commerce — The Future of Business Success
The Canadian Chamber of Commerce is Canada's largest and most activated business network — representing over 400 chambers of commerce and boards of trade and more than 200,000 business of all sizes, from all sectors of the economy and from every part of the country — working to create the conditions for our collective success. The Canadian Chamber of Commerce is the undisputed champion and catalyst for the future of business success. From working with government on economy-friendly policy to providing services that inform commerce and enable trade, we give each of our members more of what they need to succeed: insight into markets, competitors and trends, influence over the decisions and policies that drive business success, and impact on business and economic performance.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/299100
Source: Canadian Chamber of Commerce
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