Canada

Canada is the 10th global economy and is noted for having a diversified and strong economy, driven by its abundance in natural resources, particularly oil, gas and minerals, but also for its growing technology sector, manufacturing and financial services. Canada is also a key player in international trade, with the United States as its main trade partner under the USMCA Trade Agreement, and with free trade agreements with the European Union and different economies of the Pacific. Its stability, diversification and trade openness make Canada one of the markets where Basque companies have greatest potential.

A very competitive market with a global outlook

Canada, with a population of around 40 million people, has a strong and diversified economy, driven by its wealth in natural resources such as oil, gas and minerals, as well as by growth sectors such as technology, manufacturing and financial services. This diversification has been key for its resilience to global fluctuations of the prices of raw materials. Cananda is an important player in international trade, with the United States as its main partners under the USMCA Trade Agreement, and free trade agreements with the European Union and economies of the Pacific. Politically, it enjoys stability and a robust democratic system that facilitates consistent macroeconomic policies, such as the Bank of Canada’s monetary policy focused on controlling inflation. Its political stability, commercial openness and economic diversification, together with an ageing but growing population, position Canada as one of the most advanced and competitive economies of the world.

The Canadian economy has performed strongly, driven by its sectoral diversification, which combines a strong base of natural resources such as oil, gas and minerals, with growth sectors including technology, advanced manufacturing and financial services. This diversification has allowed Canada to better withstand the fluctuations in the prices of commodities and the dynamics of global trade. However, it is facing important challenges such as the need to reduce its dependency on energy exports, to adapt to the trade tensions with China and to manage the transition towards cleaner energies. Looking to the future, the outlook is for moderate growth, with a focus on environmental sustainability and trade diversification, while Canada is seeking to consolidate as a competitive and resilient economy on the global stage.

Canada is one of the leading players in international trade. Natural resources, particularly energy products such as oil and gas, dominate its exports, accounting for over a quarter of the total. The country is also an important exporter of minerals, forestry products, agricultural products (such as wheat and canola) and manufacturing, such as vehicles and machinery.

The United States is its largest trade partner, absorbing around 70% of Canadian exports, mainly through the United States-Mexico-Canada Agreement (USMCA). Furthermore, Canada has free trade agreements with the European Union (CETA) and with several economies of the Pacific under the CPTPP, which has allowed it to expand its outreach towards markets such as Japan and Australia. In recent years, the demand for Canadian raw materials has grown in Europe and Asia, partly due to the efforts of those regions to lower their dependency on Russian energy exports.

However, Canada is facing challenges in its international trade, including the strained relationship with China, one of its main markets for agricultural products, and the need to diversify its trade partners to reduce its dependency on the United States. Its exports are forecast to grow by 2.7% in 2025 and an annual average of 2% between 2026 and 2028.

The Canadian market is robust, dynamic and highly integrated in the global economy, with a structure that reflects both its economic development and its proximity to large markets such as the United States. Even though it has traditionally depended on its vast natural resources, such as oil, gas, mining and forestry products, the Canadian market has experienced growing diversification. Sectors such as technology, advanced manufacturing, biotechnology, financial services and clean energy have become more prominent, turning cities such as Toronto, Vancouver and Montreal into leading global financial and technological hubs.

The Canadian consumer market is one of the most advanced in the world, with a population that enjoys a high standard of living and there is strong demand for goods and services. The retail, property and services sectors are key for the domestic economy. Further, consumer spending has been driven by an immigration policy that attracts talent and capital, which in turn fuelling growth in different areas of the market. Canada is an attractive destination for foreign direct investment (FDI) due to its political stability, its advanced infrastructure and its favourable business climate. However, the Canadian government has begun to restrict certain investments, particularly in strategic sectors such as natural resources and technology, to protect economic security and sovereignty.

Canada’s country risk for trade and investment is low, due to its political stability, robust legal framework and economic diversification. However, some factors generate moderate risks. Dependency on exports of natural resources, particularly oil and minerals, expose Canada to the volatility of global prices. The possibility of a more protectionist trade climate in the USA, involving proposed tariffs and stricter border controls, could lead to challenges for Canadian trade and investment. The overheated property market in key cities also poses a financial risk. Despite these challenges, Canada continues to be an attractive destination for investments with a favourable regulatory environment and an advanced economy, although it must manage those risks properly to remain competitive in the long term.

Government intervention in Canada’s economy achieves a balance between free market policies and strategic regulation to guarantee stability and social wellbeing. The Canadian government plays an important role in sectors such as health, education and social services, where universal access is prioritised. In economic terms, the intervention includes policies to manage natural resources, promote clean energy and regulate foreign investment in strategic industries such as technology and energy, limiting, for example, Chinese investment in those sectors. At the same time that it drives innovation and competitiveness, Canada also implements measures to protect national industries and to address environmental challenges, thus ensuring sustainable growth in the long run.

Canada has 15 Free Trade Agreements covering 49 countries. Given the openness of the economy, where one of every five jobs are directly or indirectly linked to exports, the liberalisation of trade will continue to be supported by the parties that govern from 2025. Policies in this area will be partly guided by the need to maintain close relations with the USA, which is by far Canada’s largest trade partner. Trade certainty has improved with the implementation of the USMCA, the agreement that replaced the North-America Free Trade Agreement (NAFTA) in 2020, during Joe Biden’s administration, and Trump coming to power is not expected to alter this relationship.

Trade barriers in Canada for Basque companies are relatively low, thanks to the EU-Canada Comprehensive Economic and Trade Agreement (CETA). However, challenges may emerge such as the adaptation to Canadian regulatory standards in sectors such as food, technology or pharmaceuticals, along with differences in the provincial regulations. Furthermore, it is mandatory in Quebec to comply with the French linguistic legislation. Despite these barriers, Canada offers a favourable landscape for Basque companies.

Canada’s regulatory environment support foreign companies by facilitating their operations, a robust protection of patents and pro-innovation policies. The efficient and transparent judicial system guarantees the effective protection of the intellectual and real property rights, the fair settlement of disputes and the enforcement of arbitration decisions. With good insolvency legislation, improvement recovery rates and efforts to stop money laundering, Canada continues to be an attractive destination for foreign investments despite some regional legal differences.

Contact office

David Cormier

Director of Basque Trade & Investment Canada

Basque Trade & Investment Canadá

393 Rue St-Jacques #250, Montreal, Qc, H2Y 1N9 (Walk In customer)

747 Rue du Square-Victoria #250, Montreal, Qc, H2Y 3Y9 (Official / Mail)

+1 (514) 970 2007

dcormier@basquetrade.eus

* Office hours:

Monday to Friday: 8.00 a.m. to 5.00 p.m.

Latest news

See more
Euskadi y República Checa analizan oportunidades conjuntas para su industria en robótica y automatización

Euskadi y República Checa analizan oportunidades conjuntas para su industria en robótica y automatización

May 6, 2025
Read More
WonderShop, WordPress-erako (“WP”) diseinatutako plugina, online denden jabeei katalogoen kudeaketa errazten die

WonderShop, WordPress-erako (“WP”) diseinatutako plugina, online denden jabeei katalogoen kudeaketa errazten die

Mar 20, 2025
Read More
CIC biomaGUNE launches a company that will transform disease diagnosis by using nanosensors

CIC biomaGUNE launches a company that will transform disease diagnosis by using nanosensors

Feb 18, 2025
Read More

How can we help you?

At Basque Trade & Investment, we help you with your internationalisation process, whether you need personalised services and if you are looking for information to expand your company abroad.
CONTACT US