Canada’s transportation system supports Canada’s global trade, evaluated at $1.1 trillion in 2017. Of that amount, 63.4% originated in or was destined for the United States, our main trading partner. The United States was the destination for 75.9% of Canadian exports and the origin of 51.3% of imports into the Canadian marketplace (tables 1 and 2).
Canada’s trade has become more diversified over the last two decades. In 1998, 84.8% of Canadian exports were destined for the United States and 68.2% of Canadian imports originated there. China and the United Kingdom are increasingly important as destinations for Canadian exports. China’s share of Canadian exports grew from 0.8% in 1998 to 4.3% in 2017, while the United Kingdom saw its share increase from 1.4% in 1998 to 3.2% in 2017. The concentration ratio of destination markets (also known as the Herfindahl-Hirschman Index, which ranges from 0 [no concentration] to 1 [perfect concentration]) decreased from 0.72 in 1998 to 0.57 in 2016. This finding indicates that the destination of Canadian exports over those two decades became significantly more diversified.
Diversification is even more pronounced with respect to imports, as a result of increased trade with China and Mexico. Imports from these two countries each accounted for 2.6% of the Canadian total in 1998, but imports from China had increased to 12.6% and imports from Mexico had reached 6.3% by 2017.
Table 1 Exports to Canada’s top trading partners, customs basis, 1998 and 2017
| Value ($ millions) | share (%) | |||
| 1998 | 2017 | 1998 | 2017 | |
| Total | 318,415 | 546,593 | 100 | 100 |
| United States | 269,905 | 414,620 | 84.8 | 75.9 |
| China | 2,498 | 23,612 | 0.8 | 4.3 |
| United Kingdom | 4,412 | 17,696 | 1.4 | 3.2 |
| Japan | 8,635 | 11,831 | 2.7 | 2.2 |
| Mexico | 1,467 | 7,853 | 0.5 | 1.4 |
| Other | 31,498 | 70,981 | 9.9 | 13 |
Source: Statistics Canada, Table 12-10-0011-01, International merchandise trade for all countries and by Principal Trading Partners (x 1,000,000).
Table 2 Imports from Canada’s top trading partners, customs basis, 1998 and 2017
| Value ($ millions) | share (%) | |||
| 1998 | 2017 | 1998 | 2017 | |
| Total | 298,386 | 561,448 | 100 | 100 |
| United States | 203,578 | 288,298 | 68.2 | 51.3 |
| China | 7,651 | 70,927 | 2.6 | 12.6 |
| Mexico | 7,682 | 35,506 | 2.6 | 6.3 |
| Germany | 6,081 | 17,935 | 2 | 3.2 |
| Japan | 14,015 | 17,522 | 4.7 | 3.1 |
| Other | 59,379 | 131,260 | 19.9 | 23.4 |
Source: Statistics Canada, Table 12-10-0011-01, International merchandise trade for all countries and by Principal Trading Partners (x 1,000,000).
Changing trade patterns have affected Canada’s transportation system by shifting some of its focus towards supporting growing trade with Asia. For example, the $2 billion National Trade Corridors Fund seeks to make Canada’s transportation system more efficient and more resilient to better connect Canada to the rest of the world.
In the coming decades, Asia, especially China and India, as well as Latin America could become more important trade partners for Canada. The United States should continue to be Canada’s most important trading partner, but to a somewhat lesser degree. The transportation system will therefore be called upon to serve these growing markets while adopting new technologies that will support Canada’s connectedness and competitiveness.
For more information on international trade and a closer look at Canada’s trade relationship with key countries, please visit the Canada and the World Statistics Hub.