Canada Misses Out on Opportunities with Israel as Trade Relationship Falters

Thirty years ago, Canada signed its first free trade agreement with a partner outside North America, Israel. This historic deal was spearheaded by then-international trade minister Art Eggleton.

The agreement required compromise from both sides and included the removal of long-standing barriers, such as Canadian restrictions on defence-related goods. It also extended to the Palestinian Territories, providing economic benefits to Palestinian businesses and workers.

Since the Canada-Israel Free Trade Agreement went into force, bilateral trade has more than tripled. Many of Canada's largest companies have established a presence in Israel, and firms from both countries have built partnerships in technology, cybersecurity, health care, agriculture, clean energy, and environmental innovation.

However, relations between the Canadian and Israeli governments are currently at a low point, straining the broader relationship. Despite record bilateral trade of $2.15 billion in 2025, Canada is missing out on an opportunity to strengthen its economic ties with Israel.

Israel's economy is built on cutting-edge technology, rapid commercialization, and a young, highly innovative workforce. This makes it an attractive partner for Canada, particularly in defence and artificial intelligence sectors where the Canadian government has made significant investments.

As Prime Minister Mark Carney and his ministers search for new markets and investors, Israel offers something unique: a fast-growing economy with a strong track record of commercialization and innovation. By strengthening its relationship with Israel, Canada can tap into this potential and drive economic growth.