A new analysis by the Canadian Chamber of Commerce’s Business Data Lab (BDL) sought to examine the responses of Canadian census metropolitan areas (CMAs) to shifting global trade conditions a year after the disruption of North American trade flows due to tariffs and trade barriers.
BDL’s new research acknowledged that Canadian exports were increasingly shifting away from the US.
“To broaden our capacity to trade, the data shows where there is a growing divide between cities that are successfully expanding into global markets and those that remain heavily dependent on a single trading partner,” said Matthew Holmes, the chamber’s executive vice president and public policy chief, in the news release. “In today’s environment, diversification is increasingly essential.”
However, BDL’s new analysis found that many communities remained vulnerable to continuing US trade uncertainty because relatively few cities, businesses, and sectors have driven most of the country’s trade diversification.
“Canada’s trade relationship with the United States will always matter deeply, but this research shows us that resilience increasingly depends on our ability to diversify,” said Candace Laing, the chamber’s president and chief executive officer. “Some Canadian cities are adapting quickly to this era of repeated global economic shocks, while others remain highly exposed to U.S. policy and demand uncertainty.”
“If a relatively concentrated group of cities, sectors and firms are the only ones diversifying, we are not seeing the kind of needed broad-based movement that will make us more economically resilient, productive and prosperous,” added Patrick Gill, BDL’s vice president. “Some local economies are adapting to a more fragmented global trading environment much faster than others, while many businesses still appear to be waiting for a return to pre-tariff normalcy.”
Key findings
According to BDL’s new research:
- Calgary, Ottawa–Gatineau, Toronto, Saskatoon, and Kelowna were some of the cities with the most gains in export diversification beyond the US market
- Significantly US-integrated manufacturing regions — such as Oshawa, London, and Kitchener-Cambridge-Waterloo — displayed some of the clearest signs of trade-related economic stress, weaker trade performance, and limited diversification momentum
- Exports to non-US markets rose sharply between 2024 and 2025, with that growth mostly coming from current exporters expanding their reach and not from new entrants to global markets
- Non-US exports grew by 17 percent, while the number of exporters increased by much less
- Approximately 90 percent of non-exporting businesses continued to characterize their operations as “local” despite potential international growth opportunities
- Many Canadian businesses continued to respond carefully to trade uncertainty
- Rather than fundamentally adjusting operations or diversifying internationally, businesses were more likely to increase prices, drive domestic sourcing, or delay expansion plans
- The responses of businesses often depended on local economies’ extent of exposure to US supply chains and the degree of ease with which they could shift to new markets
“Canada does not just need more trade — it needs more traders,” Laing said in the news release. “The challenge now is ensuring more businesses and communities have the tools, agency and confidence to break out of the ‘domestic comfort trap’ and compete globally by better understanding where demand for Canadian goods and services already exists.”