(Bloomberg) — Prime Minister Mark Carney set an ambitious target last year for the country to double its non-US exports over the next decade, a goal that built on his election campaign pledge to make Canada\u2019s economy less reliant on its southern neighbor.<\/p>\n
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Since then, his government has claimed early signs of success. Its recent budget update said trade diversification efforts \u201care bearing fruit,\u201d noting that non-US goods exports are up by about 36% since 2024.<\/p>\n
But a closer look at the trade data reveals the increase in Canadian exports to countries outside the US has been driven by two price-volatile commodities \u2014 gold and oil \u2014 rather than businesses breaking ground in new markets.<\/p>\n
While increasing the share of goods exported to countries other than the US would normally suggest trade diversification, much of that increase has to do with bullion and crude, Marc Ercolao, an economist at Toronto-Dominion Bank, said in an interview.<\/p>\n
A strong run-up in gold prices has driven a surge in Canadian exports of precious metals, which rose by 70% between December 2024 and March 2026, according to customs-based data. That increase has been driven by higher shipments of gold to the UK, rising by nearly three-fold during that period.<\/p>\n
Excluding precious metals, Canada\u2019s non-US exports remained essentially flat relative to December 2024, prior to the US trade war, according to the customs data.<\/p>\n
Some of the gold counted among Canada\u2019s exports isn\u2019t even leaving the country. That\u2019s revealed when one looks at the difference between the customs data, which shows goods crossing the border, and balance-of-payments data, which tracks ownership. The gap suggests a portion of the \u201cexported\u201d precious metals in March simply changed owners without physically moving.<\/p>\n
Energy exports to non-US countries have also risen, which partly reflect increased shipments to Asia following the 2024 opening of the expanded Trans Mountain pipeline. But overall energy exports were relatively flat over that period \u2014 despite some monthly volatility \u2014 up until the start of the Iran war in late February.<\/p>\n
\u201cBottom line is that we haven\u2019t yet seen durable evidence that we\u2019re building out new export channels for new products to new markets,\u201d which is likely to be a multi-year process, Ercolao said. \u201cIt took decades to build these supply chains with the US.\u201d<\/p>\n
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Carney promised to diversify trade in response to US tariffs squeezing the Canadian economy and driving panic about the country\u2019s heavy dependence on access to the American market. The prime minister has spent a considerable amount of time jetting around the world to build closer businesses ties with countries such as China and the United Arab Emirates.<\/p>\n
But Andrew DiCapua, principal economist at the Canadian Chamber of Commerce, said it\u2019s \u201ctoo early to tell\u201d if the diversification push has paid off.<\/p>\n
\u201cWe\u2019re not really, from a value perspective, exporting more energy products, but we are exporting more energy products to non-US markets,\u201d DiCapua said. \u201cIf these trends continue, we\u2019ll be able to diversify our exports. But at the end of the day, the value to non-US markets is still very small, so it\u2019s not really changing the numbers that much.\u201d<\/p>\n
Another way to assess trade diversification is to look at the number of Canadian businesses exporting to non-US markets. DiCapua noted this category grew by about 300 firms last year, marking the first increase since 2019. But fewer businesses exported to the US, dragging down the total number of exporting firms.<\/p>\n
Carney has made building major energy projects and export-enabling infrastructure a cornerstone of his political agenda. Last week, his government announced consultations on proposed regulatory changes designed to speed up federal project reviews, with a commitment to deliver decisions within a year.<\/p>\n
The consultations followed comments by Fatih Birol, the executive director of the International Energy Association, urging Canada to move more quickly to develop and export its energy resources.<\/p>\n
DiCapua echoed Birol\u2019s call, saying Canada must remain focused on developing its capacity to export energy to the world if it wants to advance its trade-diversification goals.<\/p>\n
\u201cRight now, the initial signs are that we\u2019ve been able to replace the hole that was created in the trade data from US tariffs,\u201d said DiCapua. \u201cThe trajectory of our future trade is going to depend on how much we\u2019re able to build the domestic capabilities of our country to take advantage of global opportunities.\u201d<\/p>\n
–With assistance from Erik Hertzberg, Melissa Shin and Brian Platt.<\/p>\n
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