Canada's Export Diversification Lags Behind Peers

A recent announcement of sweeping US tariffs on many Canadian products has exposed Canada's lack of export diversification, according to the C.D. Howe Institute.

The issue is not that Canada trades too much with the United States, but rather that Canadian firms capture a surprisingly small share of business opportunities elsewhere.

A study shows that roughly three-quarters of the world economy lies outside the United States, yet Canadian firms earn far less export income from those markets than firms in other advanced economies.

The institute's analysis reveals that Canada ranks last among comparable advanced economies when it comes to merchandise exports outside its main trading partner. Excluding the United States, Canada's merchandise exports amount to only about 6 percent of GDP.