When Mary Ng handed over the reins of Canada’s international trade portfolio last week, she left behind a complex economic chessboard. Her successor, François-Philippe Champagne, steps into the role at a critical moment when Canada’s traditional trade relationships are under unprecedented strain and the global economic landscape is shifting beneath our feet.
The trading relationship with the United States—which still accounts for roughly 75% of Canadian exports—faces headwinds that would have seemed unimaginable a decade ago. Supply chain vulnerabilities exposed during the pandemic haven’t been fully addressed, and the possibility of renewed American protectionism looms on the horizon regardless of November’s election outcome.
“We’re dealing with a fundamental restructuring of global trade,” explains Goldy Hyder, president of the Business Council of Canada. “Canada can no longer afford to put all its eggs in one basket, no matter how comfortable that basket has been historically.”
This reality explains why Champagne’s appointment comes with an explicit mandate to accelerate trade diversification, particularly toward emerging markets in Asia, Africa, and Latin America. The strategy isn’t new—successive governments have talked about diversification for decades—but the urgency certainly is.
Looking at the numbers makes it clear why. Despite years of attempted diversification, Canada’s trade remains stubbornly concentrated. Statistics Canada data shows that after the United States, our next largest trading partners—China, the UK, and Japan—collectively account for just 13% of our exports.
I’ve spent years covering Canadian trade policy, and I’ve noticed a familiar pattern: ambitious diversification announcements followed by minimal shifts in actual trade flows. The challenge isn’t a lack of government enthusiasm but rather the gravitational pull of the massive American market sitting right next door.
“Geography is destiny in trade,” notes Carlo Dade, director of the Trade & Investment Centre at the Canada West Foundation. “But that doesn’t mean we shouldn’t push against those constraints, especially when our primary relationship is becoming less predictable.”
Champagne’s approach seems to focus on what trade experts call “strategic diversification”—targeting specific high-growth markets where Canadian expertise aligns with local demand. Indonesia, Vietnam, and India feature prominently in this strategy, alongside deeper engagement with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries.
The government’s recently announced Indo-Pacific Strategy allocates $2.3 billion over five years to strengthen economic ties in a region that houses some of the world’s fastest-growing economies. But money alone won’t solve the diversification challenge.
What’s different this time, according to those close to the file, is the targeted sector-by-sector approach. Rather than simply trying to sell more of everything everywhere, Champagne is expected to focus on areas where Canada has clear competitive advantages: clean technology, critical minerals, agricultural products, and specialized manufacturing.
“The era of generalized trade promotion is over,” explains Ailish Campbell, Canada’s Ambassador to the European Union. “Success in new markets requires deep sectoral knowledge and connections that go beyond traditional diplomatic channels.”
Take critical minerals as an example. Canada possesses abundant reserves of materials essential for the green energy transition—lithium, cobalt, and rare earth elements. Countries like South Korea, Japan, and Germany are desperate to secure reliable supply chains for these resources as they reduce dependence on China. This alignment creates natural partnership opportunities that didn’t exist even five years ago.
Similarly, Canadian agricultural exports are finding new markets as middle-class growth in Southeast Asia drives demand for high-quality food products. Canadian pulse crops are now regular staples in Indian kitchens, while specialized pork products increasingly appear on Vietnamese dinner tables.
But trade diversification isn’t just about finding new markets for existing products. It also means developing new offerings that meet emerging global needs. Canadian clean technology firms are finding receptive customers in countries facing severe climate challenges. Toronto-based Hydrostor, which develops advanced compressed air energy storage systems, recently secured major projects in Australia and California—markets hungry for innovative clean energy solutions.
“The next wave of Canadian trade success will come from companies solving global problems,” says Mairead Lavery, President and CEO of Export Development Canada. “Climate adaptation, food security, healthcare innovation—these are areas where Canadian expertise matches global demand.”
Small and medium-sized enterprises (SMEs) represent another critical piece of the diversification puzzle. While Canada’s trade giants—companies like Bombardier or Barrick Gold—have long operated globally, smaller firms often lack the resources to navigate complex international markets. Champagne has signaled that expanding SME participation in export markets will be a priority.
The obstacles to meaningful diversification remain substantial. Canadian businesses frequently cite regulatory complexity, financing challenges, and limited market knowledge as barriers to expansion beyond familiar territory. The Trade Commissioner Service helps address some of these issues, but business groups argue more comprehensive support is needed.
There’s also the geopolitical dimension. As Canada seeks to diversify away from the United States, we’re engaging with countries that present their own complex relationship challenges. Recent tensions with China have demonstrated how quickly economic ties can become entangled with broader diplomatic issues.
“We need to be clear-eyed about the risks,” cautions Wendy Dobson, co-director of the Rotman Institute for International Business. “Diversification doesn’t mean we can escape geopolitical realities—it just means we face different ones.”
Despite these challenges, the economic case for diversification has never been stronger. The world’s economic center of gravity continues to shift eastward, with Asia expected to represent nearly 50% of global GDP by 2040. Canadian companies that establish footholds in these markets now will have significant advantages as this shift accelerates.
For ordinary Canadians, successful trade diversification could mean more resilient supply chains, more stable employment across economic cycles, and better insulation from U.S.-specific economic shocks. The benefits extend beyond macroeconomic statistics to kitchen table concerns.
As Champagne settles into his new role, he faces both opportunity and urgency. The diversification imperative is clear, but so are the obstacles. Whether this latest push represents a genuine turning point or merely another chapter in Canada’s long-running diversification story remains to be seen.
What seems certain is that the global trading system isn’t waiting for Canada to make up its mind. As emerging markets forge new economic relationships and established powers realign their priorities, the cost of standing still only grows. For a trading nation like Canada, diversification isn’t just good policy—it’s increasingly a matter of economic survival.
