Question Period Note: Trade Diversification

Diversifying Canada's international trade was a key theme of the Prime Minister's May 21 Mandate Letter to Cabinet and is an issue of growing interest given current uncertainty in global trade.

• The Government is committed to helping Canadian businesses grow by diversifying to new markets. It is vital that we strengthen our partnerships with reliable trading partners around the globe.
• The Government is working to grow Canada's existing network of 15 free trade agreements, which already cover economies representing 61% of global GDP.
• The Government will also continue to help exporters enter new markets. Canada's Trade Commissioner Service offers advice and support to Canadian exporters from 160 locations around the globe. The TCS served over ten thousand Canadian clients in 2023-24.
• Trade diversification is a strategic priority for Export Development Canada (EDC). In 2024, EDC opened new representations in Japan, Vietnam and the Philippines, and served over 1,500 clients and facilitated $13 billion in trade in the Indo-Pacific region.
• Helping Canadian businesses realize their full international potential is a key part of the Government's agenda. As Minister of International Trade, I look forward to working with Cabinet and industry to make Canada one of the world's most connected and competitive economies.

While Canadian exports to non-US markets increased 50% between 2017 and 2024, 70% of Canada's exports still went to the US in 2024. The share of Canada's exports destined for the US has consistently ranged between 70-80% for decades. Trade diversification is a longstanding priority for the Government of Canada, reflecting a desire to see Canadian companies achieve their full potential through international growth and to address risks of export concentration.
Canada has an unparalleled set of 15 free trade agreements (FTAs) spanning 51 countries and covering 61% of global GDP. FTA negotiations with Indonesia and Ecuador were recently concluded; negotiations with the Association of Southeast Asian Nations (ASEAN) and exploratory talks with the Philippines are ongoing. Canada's Trade Commissioner Service (TCS) is present in over 160 cities world-wide. In 2023-24, 10,903 Canadian businesses received 57,402 services from the TCS, facilitating 1,232 business deals. TCS clients reported the estimated value of these deals at $6.4 billion. Approximately 75% of TCS services delivered to Canadian clients in that period were for markets outside of North America. The TCS also administers CanExport, a grants-and-contributions programs that includes direct financial assistance to businesses and national trade associations seeking to diversify to new export markets. In 2024-25, CanExport approved funding for projects by over 1,700 Canadian businesses and 50 business associations. To maximize impact, EDC has identified priority markets representing short and long-term potential for Canadian companies, focusing on countries with existing Free Trade Agreements (FTAs)including in the Indo-Pacific. As part of EDC's Indo-Pacific Expansion Program, in 2024 EDC opened new representations in Japan, Vietnam and the Philippines and signed MOUs with several export credit agencies in the region. This same year, EDC served over 1,500 customers and facilitated $13 billion in business in the Indo-Pacific region. The corporation's latest corporate plan aims to facilitate $25 billion in business in the Indo-Pacific by 2028. EDC also tracks business facilitated in emerging markets.

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