A world of opportunity: Navigating high-growth markets for Canadian exporters

Canadian exporters have a unique opportunity to expand into high-growth markets by leveraging their comparative advantages. In our latest analysis, we identify the top products and destinations where Canada holds a competitive edge, providing a roadmap for businesses looking to diversify their portfolios.

In our Feb. 20 Trade Matters, entitled Beyond the fog of uncertainty, there’s a world of opportunity, we highlighted several high-potential markets for Canadian exporters seeking to better diversify their portfolio mix. But the reality facing companies hoping to break into these markets will often differ by industry.

First and foremost, there are demand considerations. Does the market need what you’re selling? What about the competition? While the drivers of trade are shifting, now more than ever, trade is about cost competitiveness and comparative advantage. Here you must think of not just production costs, but also transportation costs. Are there unique regulatory dynamics to be navigated?

Leveraging comparative advantage to match high-potential Canadian goods to growth markets

So, as a follow up, we looked to identify which Canadian products have the greatest potential for growth in our Top 25 markets of opportunity. To do that, we leveraged a well-established metric of revealed comparative advantage (RCA) as well as country-level import forecasts.

For example, if aircraft account for roughly 2% of Canada’s goods exports, and globally account for 1% of the world’s total exports, the RCA metric is greater than one, indicating that we possess a relative advantage. This is a simple, yet powerful metric that can be highly effective at identifying products where countries inherently hold a competitive edge, which could stem from lower costs, greater productivity, access to specialized skills or key resource availability. 

Top markets and products for Canadian exporters

EDC Economics identified those products where Canada holds a greater advantage than each of our Top 25 markets of opportunity. On top of that, we overlayed our import forecasts for those products in each market, to establish products of opportunity in regions of opportunity, which are projected to grow the fastest.

So, what did we find?

1. While Canadian exports are highly concentrated by destination, they’re remarkably well-diversified by product. More than 80% of Canada’s goods exports in 2024 were made up of more than 25 distinct products, ranging from forestry to pharmaceuticals and even chocolate products.

2. Four of our Top 5 exports in 2024 were products where Canada has an advantage and that are in high demand in several markets of opportunity. This, in general, bodes well for Canadian export growth.

Opportunities in metals, minerals and forestry products

Our analysis shows that across certain high-potential markets, there are strong advantages and opportunities for Canada in 2026, including in:

• minerals (specifically ores),
• transportation (vehicles and aircraft),
• fertilizers,
• wood and pulp products, and;
• metals (nickel and zinc).

Canada holds middle-order advantages and opportunities in:

• animal and vegetable products (including seafood and oil seeds),
• other metals (aluminium and copper), and;
• furniture products.

Conversely, textiles, including silks, wool and apparels, are on the low-end of the index.

When it comes to minerals, specifically ores, there are 11 markets of solid opportunity for Canadian exporters. This list includes a good mix of advanced and high-growth markets such as Mexico, France, Spain, Japan, South Korea, Belgium, Switzerland, Malaysia, Türkiye, Ireland and Colombia. For agri-food, specifically oil seeds, we identified nine markets of opportunity in the short term, including the United Kingdom, India, Singapore, Poland, Belgium, Switzerland, Türkiye, Sweden and Colombia.

In these cases, opportunities should be balanced against logistical considerations. For instance, when it comes to aluminum and aluminum products, China, Singapore and Brazil are markets of opportunity for Canadian exporters. Similarly, for nickel, Switzerland, Malaysia and Colombia are promising markets to explore. For zinc, there are seven potential markets of opportunity, including the U.K., Netherlands, Sweden, Brazil and Poland. Opportunities for diversification to some of these markets, however, need to be weighed against transport costs.

Similarly, some sectors that are highly integrated across North American supply chains also have considerable opportunities for growth elsewhere. For instance, Canadian lumber and forestry products have high potential for growth in markets such as Germany, China, the U.K., Italy, Malaysia, Ireland and Vietnam.

Canadian aircraft and parts suppliers could, in theory, reap advantages in markets, like India, Japan, Italy, Belgium, Switzerland, the United Arab Emirates and Malaysia. Automotives exporters might find considerable opportunities for growth in countries such as Brazil, Singapore and Colombia. But given a large part of the advantages enjoyed by these products stems from the integrated nature of their North American supply chains, a thorough consideration of how they fit into other regional supply chains would be needed.

The bottom line: Canada’s trade advantages

Canada’s substantial natural resource endowments have translated into key trade advantages. While Canadian exports are generally well-diversified, we don’t necessarily export more of the products in which we hold a comparative advantage and where opportunities for growth exist.

We must give serious thought to products where we’re naturally placed to lead, especially where these products align with strong needs in the high-potential markets of the future. With the global economy facing new challenges, the case for trade diversification has never been stronger.

This week, a very special thanks to Meena Aier, Prerna Sharma and Marina Malcheva. As always, at EDC Economics, we value your feedback.

If you have ideas for topics that you’d like us to explore, please email us at economics@edc.ca and we’ll do our best to cover them.