TORONTO – A former Ambassador of Canada to Italy, ecstatic that he had the opportunity to occupy the post, confided that he knew truly little about the expectations Canada might have of his duties. Another offered that during his tenure the main issue was to raise awareness that Canada exists.
Our Ambassadors to the USA are not confused about their task: ensure that Canadian economic interests – primarily in the manufacturing [auto and related] and natural resources sectors are protected and nurtured. In 2023, almost 80% (77.6% to be more precise, according to worldexports.com) of Canadian exports were bought by American importers.
Globally, as an exporter of goods (primary and downstream products), Canada does not rank in the top 10 (see charts on this page either as a percentage – volume of trade – or in USD totals). Nonetheless, it did export USD $569 Billion (CDN $794 Billion) worth of products, 78.8% to its North American Free Trade Agreement (NAFTA) partners – USA and Mexico.
Therein lies our vulnerability to the musings of newly elected President Donald Trump on Industrial strategy (decidedly nationalistic) and trade objectives (protectionist). Those exports to the USA represented 26% of Canada’s GDP in 2023, according to Statista. Put differently (worldexports.com), that translates into $ 14,000 per Canadian resident – already lower than the $15,400 per capita from 2022.
As the saying goes for all nervous Nellies: ‘forewarned is forearmed’. Trump has been speaking aloud about increasing tariffs by 10%. Our exporters may face the disruptive decision to raise their prices by that amount and weaken their competitiveness or cut their prices and diminish their revenue. Where do they go to broaden their market, to the list of exporting countries in the charts attached?
The unhappy fact is that Canada has great difficulty selling to the top ten exporters: only 21.2 % of our exports go to markets outside our North American partnership. In the large scheme of things, our trade with countries outside NAFTA is relatively “small”. As with Italy, according to Statistics Canada data, we are in a trade deficit situation with them.
It is a wake-up call for government policy makers who have been focused on diversity, equity and inclusion (DEI). The trading partner responsible for twenty-six cents of every dollar of wealth we create as a country no longer cares what we think. It is all about the money.
The top two exports from Canada are mineral fuels and vehicles. Nothing else comes close.