Key Takeaways
- A handful of Canadian cities—Calgary, Ottawa‑Gatineau, Toronto, Saskatoon, and Kelowna—drove most of the country’s export‑diversification gains in 2025.
- Calgary and Ottawa‑Gatineau posted the largest year‑over‑year jumps in non‑U.S. exports, rising 64.7 % and 64.0 %, respectively.
- Nationally, non‑U.S. exports grew only 16.8 %, underscoring the uneven nature of Canada’s trade adjustment.
- Manufacturing‑heavy Ontario centres such as Oshawa, London, and Kitchener‑Cambridge‑Waterloo remain tightly linked to the U.S. market and show limited diversification momentum.
- The report highlights a growing divergence: some cities are building broader export bases while others stay highly exposed to U.S. demand and policy shocks.
- Most of the 2024‑2025 export increase came from existing exporters expanding their reach; the number of firms selling abroad rose just 6 %.
- About 90 % of non‑exporting Canadian businesses still describe themselves as “local,” suggesting underinvestment in longer‑term diversification.
- To make diversification structural, especially among small and medium‑sized enterprises, more firms need to participate in global trade.
Overview of the Canadian Chamber of Commerce Report
The Canadian Chamber of Commerce released a new analysis examining how Canadian municipalities performed on export diversification during 2025. The study compares non‑U.S. export growth between 2024 and 2025 across surveyed cities, highlighting both successes and laggards. Its central finding is that a relatively small group of urban centres accounted for a disproportionate share of the nation’s progress in reducing reliance on the United States market, while many other regions continued to experience trade‑related economic stress.
Cities Leading the Diversification Push
Calgary, Ottawa‑Gatineau, Toronto, Saskatoon, and Kelowna, B.C., emerged as the top performers. Calgary led with a 64.67 % increase in exports to markets outside the United States, closely followed by Ottawa‑Gatineau at 64.04 %. Toronto’s non‑U.S. sales rose 32.82 %, Saskatoon gained 32.04 %, and Kelowna posted a 28.63 % increase. Collectively, these cities drove the bulk of Canada’s export‑diversification gains, illustrating how localized strengths in sectors such as energy, technology, and agri‑food can translate into broader international reach.
National Export Growth in Context
Despite the impressive figures from the leading cities, Canada’s overall non‑U.S. export growth amounted to only 16.8 % from 2024 to 2025. This modest national increase reveals that the gains were highly concentrated; many other municipalities either stagnated or saw modest improvements. The disparity underscores an uneven trade adjustment across the country, with certain regions benefiting from proactive diversification strategies while others lag behind.
Ontario Manufacturing Hubs Falling Behind
The report points out that manufacturing‑intensive regions in Ontario continued to experience weaker overall trade performance and “limited diversification momentum.” Cities such as Oshawa, London, and the Kitchener‑Cambridge‑Waterloo corridor remain heavily integrated with the U.S. market. Their export growth outside the United States has been insufficient to offset broader weaknesses in trade activity and local economic conditions, leaving them vulnerable to U.S. policy shifts and demand fluctuations.
Emerging Divergence in Local Trade Performance
A core theme of the analysis is the “growing divergence” in local trade performance across Canada. While some cities are successfully expanding into global markets and building more diversified export bases, others remain more exposed to U.S. demand, trade disruptions, and policy uncertainty. This split suggests that regional economic resilience increasingly depends on the ability to look beyond the southern neighbour for growth opportunities.
Linking Prior Predictions to Current Outcomes
A previous chamber report had identified Calgary, Saint John, N.B., and Windsor, Ont., as the cities most likely to suffer from U.S. tariffs, while Victoria and Halifax were deemed less exposed due to stronger Asia‑Europe ties. The newest findings show that the anticipated exposure is indeed manifesting in local economic outcomes, although the exact match was not perfect. As expected, municipalities with greater reliance on U.S. trade are experiencing heightened economic stress, confirming the earlier risk assessment.
Federal Goals and Recent Trade Figures
The federal government has set a target to double non‑U.S. exports over the next decade. In its spring economic update, the government reported that non‑U.S. goods and services exports rose by $33 billion in 2025 compared with 2024. This aggregate increase aligns with the chamber’s data but also highlights the challenge: achieving the doubling goal will require broadening participation beyond the current cadre of high‑performing cities.
Impact of U.S. Trade Policies
Although the Canada‑U.S.-Mexico Agreement (CUSMA) is slated for review this year, former President Donald Trump’s administration has employed sector‑specific tariffs on steel, aluminum, automobiles, and cabinetry to exert pressure on trading partners. Canada has been particularly affected by these duties, which have contributed to the uneven trade landscape described in the report. The tariffs reinforce the urgency for Canadian firms to seek alternative markets.
Business Adaptation Patterns
Statistics Canada data cited by the chamber indicate that many Canadian firms are responding to U.S. tariffs cautiously rather than undertaking fundamental operational shifts. While fewer businesses report taking no action compared with the previous year, relatively few are actively diversifying sales or suppliers outside the United States. Instead, companies tend to raise prices, increase domestic sourcing, or delay expansion plans, reflecting a preference for short‑term mitigations over long‑term strategic repositioning.
Limited Entrant Growth in Export Markets
The report notes that the majority of the 2024‑2025 export growth stemmed from existing exporters expanding their reach, not from new entrants. The number of Canadian exporters selling to non‑U.S. markets rose by only six percent year over year. This modest increase in participant count suggests that barriers—such as market knowledge, financing, or regulatory hurdles—remain significant for firms considering their first forays abroad.
Expectations of Stability Amid Volatility
Despite signs that the global trading environment is becoming more fragmented and less predictable, many businesses still anticipate that Canada‑U.S. trade conditions will stabilize. The chamber warns that this optimism may lead to underinvestment in diversification efforts precisely when resilience and market expansion are critical for competitiveness. Firms that rely heavily on a single market expose themselves to heightened risk when that market experiences turbulence.
The Predominance of Local‑Oriented Firms
Approximately 90 percent of non‑exporting Canadian businesses continue to characterize their operations as “local.” This statistic highlights a sizable segment of the economy that remains insulated from international markets, potentially missing out on growth opportunities and lacking the buffers that diversification can provide during domestic downturns.
Path Forward for Structural Diversification
To transform export diversification from a sporadic achievement into a structural feature of the Canadian economy, the report argues that more firms—especially small and medium‑sized enterprises (SMEs)—must engage in global trade. Policymakers and industry groups should consider targeted support measures, such as export‑ readiness training, access to international market intelligence, and financing incentives, to lower the barriers for SMEs and encourage broader participation.
Conclusion: The Need for More Traders
Candace Laing, President and CEO of the Canadian Chamber of Commerce, emphasized that while the Canada‑U.S. relationship will always be vital, Canada’s future resilience hinges on the ability to diversify. “Canada does not just need more trade — it needs more traders,” she stated, encapsulating the report’s call to action. Encouraging a wider base of businesses to explore and sustain overseas markets will be essential for reducing regional disparities, mitigating exposure to U.S. policy shocks, and securing long‑term economic growth.