Carney’s Trade Push Beyond the US Is Just a Gold Rush, For Now

Article link: https://www.bloomberg.com/news/articles/2026-05-13/carney-s-trade-push-beyond-the-us-is-just-a-gold-rush-for-now

Prime Minister Mark Carney set an ambitious target last year for the country to double its non-US exports over the next decade, a goal that built on his election campaign pledge to make Canada’s economy less reliant on its southern neighbor.

Since then, his government has claimed early signs of success. Its recent budget update said trade diversification efforts “are bearing fruit,” noting that non-US goods exports are up by about 36% since 2024.

But a closer look at the trade data reveals the increase in Canadian exports to countries outside the US has been driven by two price-volatile commodities — gold and oil — rather than businesses breaking ground in new markets.

While increasing the share of goods exported to countries other than the US would normally suggest trade diversification, much of that increase has to do with bullion and crude, Marc Ercolao, an economist at Toronto-Dominion Bank, said in an interview.

A strong run-up in gold prices has driven a surge in Canadian exports of precious metals, which rose by 70% between December 2024 and March 2026, according to customs-based data. That increase has been driven by higher shipments of gold to the UK, rising by nearly three-fold during that period.

Excluding precious metals, Canada’s non-US exports remained essentially flat relative to December 2024, prior to the US trade war, according to the customs data.

Some of the gold counted among Canada’s exports isn’t even leaving the country. That’s revealed when one looks at the difference between the customs data, which shows goods crossing the border, and balance-of-payments data, which tracks ownership. The gap suggests a portion of the “exported” precious metals in March simply changed owners without physically moving.

Energy exports to non-US countries have also risen, which partly reflect increased shipments to Asia following the 2024 opening of the expanded Trans Mountain pipeline. But overall energy exports were relatively flat over that period — despite some monthly volatility — up until the start of the Iran war in late February.

“Bottom line is that we haven’t yet seen durable evidence that we’re building out new export channels for new products to new markets,” which is likely to be a multi-year process, Ercolao said. “It took decades to build these supply chains with the US.”

Carney promised to diversify trade in response to US tariffs squeezing the Canadian economy and driving panic about the country’s heavy dependence on access to the American market. The prime minister has spent a considerable amount of time jetting around the world to build closer businesses ties with countries such as China and the United Arab Emirates.

But Andrew DiCapua, principal economist at the Canadian Chamber of Commerce, said it’s “too early to tell” if the diversification push has paid off.

“We’re not really, from a value perspective, exporting more energy products, but we are exporting more energy products to non-US markets,” DiCapua said. “If these trends continue, we’ll be able to diversify our exports. But at the end of the day, the value to non-US markets is still very small, so it’s not really changing the numbers that much.”

Another way to assess trade diversification is to look at the number of Canadian businesses exporting to non-US markets. DiCapua noted this category grew by about 300 firms last year, marking the first increase since 2019. But fewer businesses exported to the US, dragging down the total number of exporting firms.

Carney has made building major energy projects and export-enabling infrastructure a cornerstone of his political agenda. Last week, his government announced consultations on proposed regulatory changes designed to speed up federal project reviews, with a commitment to deliver decisions within a year.

The consultations followed comments by Fatih Birol, the executive director of the International Energy Association, urging Canada to move more quickly to develop and export its energy resources.

DiCapua echoed Birol’s call, saying Canada must remain focused on developing its capacity to export energy to the world if it wants to advance its trade-diversification goals.

“Right now, the initial signs are that we’ve been able to replace the hole that was created in the trade data from US tariffs,” said DiCapua. “The trajectory of our future trade is going to depend on how much we’re able to build the domestic capabilities of our country to take advantage of global opportunities.”