Why Exports Matter More Than People Think

Exports bring new income into the country. Domestic consumption recirculates existing income. When export performance weakens:

  • national income growth slows
  • governments rely more heavily on debt
  • productivity stagnates
  • living standards erode over time

Strong export sectors is the engine that funds public services, supports high‑quality jobs, and anchors long‑term prosperity.

Canada Has No Shortage of Export Sectors

Canada has many export‑ready sectors that can be strengthened through comprehensive Industrial and Trade strategies. Example sectors and companies include:

** Parent Companies are Toyota Japan, Honda Japan

These sectors matter because they bring net new income into the country. They create high quality jobs, attract investment, and strengthen the economic foundation that supports public services.

A Two‑Pronged Approach to Export Expansion

Canada’s Industrial Strategy must pursue export expansion on two fronts at the same time.

1. Fully leverage the 51 countries covered by Canada’s existing 15 trade agreements

Canada has one of the world’s most extensive networks of trade agreements, yet the country runs trade deficits with the majority of its partners. This signals a structural underperformance:

  • Canadian firms are not exporting at the scale those agreements were designed to enable
  • market access exists on paper but is not translating into export growth
  • the industrial base is not aligned with the opportunities those agreements create

An Industrial Strategy must explicitly address this gap.  It is not enough to have agreements — Canada must use them.

2. Expand exports to China and India

Regardless of political preferences or geopolitical tensions, the economic reality is straightforward:

  • China and India are the world’s two largest population centres
  • they are the fastest‑growing major consumer markets
  • they will account for a large share of global demand growth over the coming decades

Canada cannot build a durable export strategy that ignores where global demand is expanding most rapidly.  This does not require naïveté or dependence — it requires strategic engagement, risk‑managed and diversified.

Both Prongs Must Operate Simultaneously

Canada cannot afford a sequential approach where it “fixes” trade‑agreement performance first and “later” turns to China and India. Global markets move too quickly for that.

A credible Industrial Strategy must:

  • expand exports to existing partners now
  • build new export capacity for China and India now
  • align domestic reforms with both tracks now

This mirrors the simultaneous internal/external framing that underpins the entire strategy.

Economic Risk and Resilience

Canada’s economic risk has increased because of:

  • over‑reliance on a single trading partner
  • slow productivity growth
  • supply‑chain vulnerabilities
  • talent shortages
  • capital leaving for more competitive jurisdictions

A modern Industrial Strategy reduces these risks by diversifying export markets, strengthening domestic capabilities, and building resilience into critical supply chains.

Why Industrial Strategy Matters for Prosperity

Countries grow wealth by exporting more than they import. Strong export performance expands national income, supports high-value industries, and gives governments the fiscal capacity to fund health care, education, infrastructure, and social programs.

When export growth stalls, governments often fill the gap with deficit financing. That works for a while — until it doesn’t. Canada is now at the point where rising interest payments are consuming a growing share of public revenue, leaving less available for essential services Canadians rely on.

Rebuilding Canada’s productive and export capacity is not optional. It is the foundation of long-term prosperity.

What Success Looks Like

A successful Industrial Strategy would show progress through clear, measurable outcomes:

  • rising export intensity across priority sectors
  • more globally competitive firms headquartered in Canada
  • faster project approvals and reduced regulatory bottlenecks
  • higher productivity growth
  • increased foreign direct investment aligned with strategic sectors
  • stronger economic resilience and reduced dependence on any single market

These indicators help Canadians gauge how well the country´s Industrial Strategy is working.

Canada Has Not Had an Industrial Strategy
Since ~1950

Canada once had a clear national economic vision. In the post‑war era, the country invested heavily in infrastructure, manufacturing, energy, and resource development. These efforts built the industries that supported decades of prosperity.

But over time, long‑term planning gave way to fragmented policies, short political cycles, and an excessive reliance on one single trading partner — the United States.

As a result:

  • Canada lost focus on building globally competitive industries
  • export diversification and growth stalled
  • the country’s productivity slowed
  • national economic risk increased dramatically

Canada’s failure to maintain a coherent Industrial Strategy since the mid‑20th century isn’t just a policy gap. It’s a form of political governance malpractice — a long‑term neglect of the basic responsibilities required to steward economic prosperity.

This is not a partisan critique. Successive governments, regardless of political stripe, allowed Canada’s long‑term Industrial Strategy to erode. The result is Canada does not have a coherent plan for export‑driven growth.

The rapid development and execution of an Industrial Strategy is how we course‑correct.

A Forward-Looking, Implementable Strategy

Canada has the talent, resources, and institutional strength to compete globally. What has been missing is coordination — a clear national commitment to building and expanding the industries that generate long-term prosperity.

Industrial Strategy is not about nostalgia or protectionism. It is about positioning Canada to succeed in a world where other countries are acting deliberately to strengthen their economic foundations.

Canada’s prosperity is not guaranteed. It must be built — intentionally, strategically, and with a clear national purpose. A modern Industrial Strategy gives Canada a practical, measurable, and implementable path to rebuild its productive capacity, strengthen its export performance, and restore long-term prosperity.

Some encouraging news: in its 2025 Federal Budget, the Carney government signaled the need for an Industrial Strategy. The big question is whether it will translate words into results by putting in place the integrated structure that both the Carney government and its successors can execute consistently.

My Next Post: Trade Strategy

Industrial Strategy doesn’t just set the direction — it builds the conditions for export expansion. Trade Strategy is how Canada turns those conditions into global reach.

My next post explores how Canada can fully leverage its trade agreements, expand into high-growth markets, and align trade policy with industrial priorities to drive export performance.

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