Canadian exports to China surged by 30% in the first half of 2026, with overall trade up 3.6% year over year, as per data analyzed by researchers at Statistics Canada. The increase in trade, totaling $66.6 billion, reflects the re-engagement between the two countries amidst Canada’s efforts to diversify its economy amid strained relations with the U.S.
The majority of domestic exports to China in this period were driven by energy and minerals, accounting for 58.4% of total exports. Energy exports, particularly crude oil and liquified propane, experienced a significant 81.8% growth, while exports of metal ores and non-metallic minerals, including copper ore, rose by 29%.
The rise in exports to China is attributed to various factors, including warming diplomatic and economic ties following tensions over the arrest of Huawei executive Meng Wanzhou in 2018. With the Canada-U.S. trade tensions escalating, Canadian Prime Minister Mark Carney emphasized the need to forge new trade agreements with other nations to reduce reliance on the U.S.
The Trans Mountain Pipeline operating at near-full capacity in June has facilitated increased access to Western Canadian crude oil in Asia. Furthermore, disruptions in oil shipments due to the U.S.-Israeli conflict with Iran have led customers to turn to Canadian producers, driving up oil exports.
The trade truce between Canada and China saw a significant shift in bilateral relations, marked by agreements that benefitted both countries. The deal allowed Chinese electric vehicles into the Canadian market in exchange for tariff concessions on Canadian agricultural products, leading to price improvements for Canadian farmers.
Despite the growth in exports, imports from China decreased by 5.8% year over year, reducing Canada’s trade deficit with China. This decline was partly influenced by a shift in manufacturing activities to countries like Vietnam. The report also noted modest improvements in agricultural exports, with some sectors showing gains while others, like lobster, experienced declines.
Farmers are aiming to diversify their markets and reduce reliance on a single trading partner, emphasizing the need to sell more domestically. While exports to China are still behind those to the UK and EU, there is potential for further growth in engaging with the Asia-Pacific region, especially given the significant market opportunities it presents.
Looking ahead, stakeholders are optimistic about surpassing the goal of increasing exports to China by 50% by 2030, with expectations of continued growth in trade relations between the two countries.