{"id":134488,"date":"2026-07-18T13:14:12","date_gmt":"2026-07-18T13:14:12","guid":{"rendered":"https:\/\/www.europesays.com\/canada\/134488\/"},"modified":"2026-07-18T13:14:12","modified_gmt":"2026-07-18T13:14:12","slug":"carmichael-services-are-canadas-true-ace-in-the-game-of-global-trade","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/canada\/134488\/","title":{"rendered":"Carmichael: Services are Canada\u2019s true ace in the game of global trade"},"content":{"rendered":"

The best example of Canada\u2019s fixed mindset<\/a> is the conversation about trade. Everyone agrees that reducing our dependence on the U.S. market is a good idea, but you\u2019ll struggle to find someone who thinks it\u2019s possible. \u201cMuch like during the Cold War, countries such as Canada will ultimately be compelled to align with one of the major powers,\u201d CIBC economists Benjamin Tal and Katherine Judge wrote<\/a> in a recent report. \u201cDespite recent developments, it is clear that Canada\u2019s alignment will remain with the United States.\u201d<\/p>\n

I don\u2019t know. Finland found itself trapped in the Soviet Union\u2019s orbit after the Second World War and still found a way to resist the economic gravity of the behemoth next door. The trick is making yourself good at producing what the world wants, rather than being a purveyor of what the world needs. The former tends to fetch a premium, while the latter tends to be commoditized and vulnerable to tariffs. So a successful diversification strategy will require moving beyond commodities. That doesn\u2019t sound so hard. In fact, it\u2019s already happening.<\/p>\n

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Meet Thomas Fox, co-founder and CEO of Calgary-based Highwoods Emissions Management and the embodiment of a modern trader. \u201cOur ambition, honestly, is global domination,\u201d Fox said. \u201cWe want to work with every oil and gas company. We\u2019re building a scalable platform that should be a no-brainer because we\u2019ve taken a process that used to take 10 people six months that now takes a couple of days to do with way more rigour.\u201d\u00a0\u00a0<\/p>\n

I interviewed Fox in March at CERAWeek, S&P Global\u2019s annual global energy conference in Houston. His confidence stood out among a Canadian delegation that was otherwise short on ambition. The oilsands producers who appeared on stage were obsessed with protecting their profit margins, while the pipeline companies complained about regulation. They showed little desire to seize the moment.<\/p>\n

A venture-backed startup like Highwood has different incentives than mature companies like Cenovus and TC Energy, but Fox was dealing with his own headwinds. Highwood\u2019s specialty is helping oil and gas companies get a handle on their methane emissions. When the firm raised US$3 million in 2023, \u201cmethane was pretty hot,\u201d Fox said. But at CERAWeek, the only time climate entered the chat was when someone would observe how little attention climate change was getting. The priorities were energy security, data centres and artificial intelligence. \u201cWe\u2019re having to reframe the value proposition,\u201d he said.\u00a0<\/p>\n

I think Canada has to reframe its value proposition when it comes to trade. We\u2019ve been immersed in the digital economy for at least a decade, and service providers account for 75 per cent of the country\u2019s gross domestic product. The $50-billion increase in export revenue between 2022 and 2025 was entirely the result of services, according to Global Affairs Canada\u2019s latest State of Trade report, published<\/a> this week by the department\u2019s Office of the Chief Economist<\/a>.\u00a0\u00a0<\/p>\n

Yet almost everything you read about trade is based on goods. That\u2019s because it\u2019s easier to imagine stuff that we can touch, taste and feel. It\u2019s also much easier to measure such things. Our biases skew the narrative, creating the impression that the national economy is heavily dependent on selling automobiles to the U.S. (for example), rather than just moderately so.\u00a0<\/p>\n

The downbeat assessment of trade diversification by CIBC\u2019s Tal and Judge was based entirely on merchandise exports. They observe that 15 separate trade agreements have done nothing to offset the gravitational pull of the U.S. market. It was probably always naive to think that they would. Tangible exports are heavy, so shipping costs will always be a determining factor in where such things are sold. Canada\u2019s goods exports are tied to the U.S. because we didn\u2019t develop enough manufacturers that make things the world wants to buy, whatever the cost. Canada has a trade deficit with South Korea because we have no Samsungs, Hyundais and SK Hynixs. <\/p>\n

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But in a digital economy, you don\u2019t need to make popular smartphones, quality cars and memory chips. According to the State of Trade report, Canada\u2019s exported commercial services, such as those provided by Highwood, were worth $144 billion in 2025. That\u2019s second only to the $162 billion the world (mostly the U.S.) paid for Canadian energy products. Travel services were more valuable than agriculture exports; lots of countries sell wheat, but there is only one where you can visit Banff National Park, eat at a Montreal restaurant or stay at the Fogo Island Inn. In all, services now account for about a quarter of Canada\u2019s exports, which suggests it\u2019s past time to update how we talk and think about trade.\u00a0<\/p>\n

The weightlessness of intangibles also lets them defy economic gravity. Distance and familiarity matters, which is why the U.S. remains the biggest market for Canadian services\u2014but only accounts for about 53 per cent of the value. You know what that means. A country determined to make itself less reliant on trade with the menacing behemoth next door will lean into the things that the rest of the world wants from it. \u201cThe services sector has quietly become a critical driver of Canadian business expansion abroad,\u201d the State of Trade report observes, \u201cencompassing digital innovation, professional expertise, intellectual property, tourism and other intangible activity.\u201d<\/p>\n

A narrative shift will mean moving beyond the origins of automobile parts and the U.S. administration\u2019s opinion of supply management. In Houston, the rule-setting body that most mattered to Fox was the International Organization for Standards, because whatever it decides on measuring methane emissions will matter more to Highwood than the North American trade agreement.\u00a0 <\/p>\n

It will also mean focusing on people rather than things. Export competitiveness will be determined by education, immigration and creating communities in which talented people want to live. Again, that shouldn\u2019t be hard. An emphasis on services means good trade policy and good domestic policy are the same.\u00a0<\/p>\n

Kevin Carmichael is The Logic\u2019s economics columnist and editor-at-large. He has spent more than two decades covering economics, business and finance for outlets including Bloomberg News, The Globe and Mail and the Financial Post, where he also served as editor-in-chief. <\/p>\n","protected":false},"excerpt":{"rendered":"The best example of Canada\u2019s fixed mindset is the conversation about trade. Everyone agrees that reducing our dependence…\n","protected":false},"author":2,"featured_media":134489,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[17,13112,5157,235,395,401],"class_list":["post-134488","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-canada","tag-canada-u-s-trade","tag-commentary","tag-economy","tag-services","tag-trade"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/134488","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=134488"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/134488\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/134489"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=134488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=134488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=134488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}