Exporting to Canada: navigating the opportunities of a changing marketplace 

Summary 

Canada is now at a historic crossroads: escalating trade tensions with the United States, the main partner with which it trades 77% of its exports, is pushing Ottawa to a diversified strategy in markets. This article analyzes the current Canadian macroeconomic environment (economic slowdown, rate cuts, impact of U.S. tariffs) and the implications for Italian companies. The performance of Italian exports to Canada is examined, which remains solid with 4.1 billion euros in the first eight months of 2025, confirming Italy as the country's eighth largest supplier. The article delves into the strategic role of CETA, the free trade agreement that has grown 60% interchange since 2017, and identifies the sectors with the greatest potential: energy (LNG), critical minerals, defense, electric automotive and agribusiness. Finally, operational guidance is provided to turn this time of transition into a concrete opportunity for growth in North American markets. 

 Canada has never been more open to Europe. The trade war triggered by the Trump administration, with tariffs on steel, autos and lumber eroding demand and employment, has forced Ottawa to radically rethink its trade strategy. For Italian companies, this represents an unprecedented opportunity: a mature, high-income market with a transparent regulatory system and a growing political will to diversify its economic relations beyond the traditional North American axis. L’export to Canada is no longer just a business choice, but a strategic move to position itself in a country actively seeking alternative partners to the United States. 

The macroeconomic scenario: slowdown, but with stable prospectsi 

Understanding the Canadian economic environment is the first step in calibrating entry strategies. The country is going through a slowdown: the economy has contracted by the’1.6% in the second quarter of 2025, mainly due to the impact of the U.S. duties. The Bank of Canada responded with consecutive cuts in the benchmark rate, Bringing it to 2.5% in June 2025, with inflation falling to 1.7% in April.  

These seemingly negative data should be read with a strategic perspective. Canada maintains an active trade balance of CAD 21 billion in 2024 (+47% compared to 2023) and, more significantly, is accelerating trade with partners other than the United States. As of April 2025, exports to countries outside the U.S. increased by 2.9%, while imports from these markets grew by 8.3%, reaching a record $47.3 billion (Source: InfoMarketsEast). This figure indicates a clear trajectory: Canada is actively diversifying, and Europe, particularly Italy, is at the center of this strategy. 

Export performance in Canada: solid, but below potential 

L’export to Canada by Italy shows a largely stable performance, with a value of €4.1 billion in the first eight months of 2025 (+2.3% compared to the same period in 2024). Italy firmly maintains the 8th position among Canada's suppliers, with a market share of 1.7%. The trade balance remains strongly positive (2.5 billion euros), confirming the competitiveness and appeal of Italian products (Source: InfoMercatiEsteri) . 

The leading sectors are well diversified: food and beverages (936 million euros, 22.7% of the total), machinery (772 million, 18.7%), and textiles and fashion (399 million, 9.7%). These numbers, while solid, are below the peak of more than 6 billion euros reached in 2023-2024. The gap with Germany, which retains the top spot among European suppliers with a share of 3.10%, is significant and indicates untapped room for growth (Source: InfoMercatiEsteri). 

The real turning point is CETA (Comprehensive Economic and Trade Agreement), the free trade agreement between the EU and Canada that entered into force provisionally in 2017. Thanks to CETA, 98% of European goods exported to Canada benefit from zero tariffs, making Italian products more competitive. As of 2017, the trade between Italy and Canada is grown of the 60%, with a 37% increase in Italian exports, particularly for machinery (+25%) and wine and cheese (+50%). The agreement also allows Italian companies to participate in Canadian government procurement, a market that amounts to about CAD 100 billion annually. 

Strategic opportunities: where to target for export to Canada 

The new geopolitical context opens up concrete spaces in areas where complementarity between the two economies is evident and Italian expertise is recognized as excellent. 

• Energy and LNG: Canada has huge natural gas reserves and is planning to become a strategic supplier to Europe, reducing dependence on Russian and American gas. Although Canadian LNG costs 15-25% more than U.S. LNG because of infrastructure to be developed, Italy can play a key role. 
• Critical minerals and green technologies: Canada has vast reserves of lithium, nickel and cobalt, critical for batteries and electric vehicles. The Italy-Canada roadmap signed in 2024 calls for joint investment in research and development to process these minerals. Italian companies specializing in advanced chemistry and materials can enter these supply chains, combining access to raw materials with environmentally friendly refining and recycling technologies. 
• Defense and aerospace: Canada is strengthening its military capability, particularly for Arctic security. The bilateral roadmap aims to collaborate on drones, naval systems and advanced technologies. Italian SMEs specializing in high-precision components can enter defense supply chains. 
• Automotive electric: Canada is investing heavily in the electric vehicle supply chain. Stellantis already has plants in the country, but there is room for the entire Italian component supply chain, from propulsion systems to lightweight materials for sustainable mobility. 
• Agribusiness: the sector continues to be a pillar of the’export to Canada, with strong demand for wine, PDO cheeses, pasta and processed products. CETA protects 41 Italian appellations and opens additional space for producers who know how to communicate quality and authenticity. 

Operational strategies for exporting to Canada: from data to action 

Making the most of the moment requires a structured approach, not an episodic one. 

• Ratifying and exploiting CETA: although Italy has not yet ratified the agreement, companies can already benefit from its provisional application. It is essential to map out the specific benefits for one's sector (elimination of duties, recognition of certifications, access to procurement) and build a positioning strategy that enhances them. 
• Diversifying beyond Ontario: Toronto and Ontario concentrate much of the trade, but the Canadian market is large and diverse. Quebec (Montreal) is a hub for aerospace and AI, British Columbia (Vancouver) for clean technologies and lumber, Alberta for energy and agriculture. An effective strategy of export to Canada should consider geographic coverage and identify the most relevant industry clusters for its sector. 
• Building local partnerships: Canada is a relational market. Relying solely on generalist distributors is not enough. It is necessary to identify partners with sector-specific expertise, after-sales capabilities and an established network. The presence of an Italian-Canadian community of nearly 1.5 million people can facilitate contacts and accelerate the building of trusting relationships. 
• Presiding over public procurement: CETA opens the door to Canadian public procurement, a CAD 100 billion per year market. Italian firms specializing in infrastructure, transportation, energy, and PA technology must equip themselves with the necessary qualifications and build a track record of projects completed in North American settings. 
• Adapting product and communication: Canadian consumers and businesses have different expectations than those in Europe. Products must meet local certifications (CSA for electrical, Transport Canada for automotive), labeling must be bilingual (English and French), and marketing materials must communicate value, sustainability, and long-term reliability. 
• Monitor regulatory developments: the Canadian regulatory environment is constantly evolving, especially in the areas of environmental sustainability, emissions and the circular economy. Companies must be proactive in anticipating these changes to turn them into competitive advantages rather than barriers to entry. 

Italy's role in the new Canada-Europe economic order 

The October 2025 meeting between Minister Tajani and Canadian Minister Sidhu, with a delegation of 80 Canadian companies on a mission to Rome and Milan, marks a turning point. The two governments clearly identified strategic sectors on which to intensify cooperation: defense technologies, electric automotive, aerospace, critical raw materials and renewable energy. The imminent launch of the Italy-Canada energy dialogue was also confirmed, and Tajani proposed a system mission to Canada in the coming months, with a dedicated business forum. 

This diplomatic activism is no accident. Canada's new prime minister, Mark Carney, declared that the privileged U.S.-Canada relationship “is over” and chose Europe as the first destination of his diplomatic mission. The possibility of an increasingly integrated Canada in the European Union is no longer political fantasy, but a real possibility in a world reshaped by global trade tensions. 

For Italy, this means that the window of opportunity is open, but it will not stay open indefinitely. Businesses that move now can benefit from a historical moment when the Canada actively seeks alternative partners, and Italy is seen as a leading strategic ally. It is estimated that if even as little as 5-10% of Canadian imports from the United States (US$460 billion in 2023) were redirected to other partners, Italy could capture up to 3 billion in value added, an increase of 15-20% compared with current export levels. 

Octagona: the strategic export partner for Canada 

The Canadian context requires partners with established experience in North American dynamics and local regulatory specificities. Entering this market without a structured strategy means missing concrete opportunities. For Italian companies that want to seize the current moment, the first step is to accurately assess their competitive potential: what certifications are needed? How do you select the right distributors? Which industry clusters are most receptive in their sector? 

Octagona supports this journey with an operational approach that integrates market analysis, regulatory management, and business network building. If your company wants to concretely explore opportunities in Canada, contact us For an initial strategic assessment of your positioning.