Wildest dreams: Exploring Canada’s services trade

The cultural phenomenon known as the Taylor Swift Eras tour is now well-past the 100-show mark, spanning almost 20 countries. These concerts have not only entertained millions but also sparked discussion about their economic impact. According to one estimate, the U.S. leg alone generated $6.8 billion in consumer spending. The U.S. Travel Association estimates that “Swifties” pump an average of $1,800 into local economies on travel, accommodations, food, and merchandise. As Swift prepares for her Toronto and Vancouver dates this fall, it’s worth examining the role of entertainment and other services exports in Canada’s economy.

According to industry experts, Toronto is the third-largest concert market in the world, after New York City and Los Angeles. Fans flocking to the city inject significant spending into local businesses—from hotels and restaurants to retail stores and transportation services. But Canada’s allure in the entertainment world extends beyond concerts. The 2026 FIFA World Cup in North America is also expected to boost tourism. Like concerts, major sporting events draw international visitors and generate substantial economic activity. They also showcase Canada’s capacity to host large-scale international gatherings, further promoting the country as a prime destination for global travellers.

Canada’s education sector is another important source of services exports, with more than one million study permit holders registered in Canada last year. The benefits here extend far beyond the revenue generated, to knowledge transfers, research and development spinoffs and the cultural exchanges that enhance Canada’s standing as a global soft power; serving as an important reminder that exports aren’t just comprised of things you can drop on your foot.

While Canada’s overall exports grew by just 1.7% between 2019 and 2023, services exports surged by 8.6% over that time. As a result, services made up 22% of our foreign sales last year, up from 18% in 2017, accounting for a larger share than automotive or energy exports. What’s more is that since services, like transportation and financial intermediation, are embedded in the shipment of goods, the value-add share of services exports is likely much higher, generating an increasingly important amount of jobs and economic activity.

Canada has multiple advantages when it comes to our services export potential. The bilingual nature of the Canadian workforce enhances its appeal in sectors, like education, consulting, and other professional services. Our world-class universities not only attract international students but also produce highly skilled professionals and tradespeople. Being home to vibrant film and performing arts centres helps bolster Canada’s cultural export potential and attract international productions that further contribute to the growth of Canada’s creative industries. And, of course, our proximity and links to the U.S. make Canada a lower-cost springboard into the world’s largest market.

Current global conditions are also working in our favour. Traditional tourist destinations in Spain, Italy, and the Netherlands are suffering from over-tourism, and local governments are taking action to manage travel inflows. Reshoring trends are bringing manufacturing supply chains into markets where Canada has traditionally enjoyed strong relationships, creating opportunities for Canadian commercial services firms. The surge in populist politics and rhetoric across developed markets has also made Canada an attractive destination for global talent. And, finally, as borrowing costs recede, global private equity, mergers and acquisitions, and venture capital activity could offer opportunities for established financial and technology hubs, like Toronto and Montreal.

The bottom line?

The evolution of Canada’s services exports and our growing influence in the global services market is a testament to the dynamism of the Canadian economy. But more can be done to enhance the competitiveness of our services exporters, helping to move Canada up the value-add ladder.

Realizing the full potential of Canadian services exports requires sustained investment in tourism, housing, transit infrastructure, talent development and immigration. It also calls for more deliberate support of the small- and medium-sized champions of this sector. With a concerted effort to foster the innovation and creativity needed, the future of Canada’s services exports looks promising.

This week, a very special thanks to Hassan Goreja, senior economist in our Economic and Political Intelligence Centre.

As always, at EDC Economics, we value your feedback. If you have ideas for topics that you would like us to explore, please email us at economics@edc.ca and we’ll do our best to cover them.