Canada’s exports set to grow in 2026—but risks are building

After a challenging 2025, marked by frequent tariff changes, supply chain disruptions and persistent uncertainty, Canadian exporters got some relief early this year. But while the tariff backdrop appeared to have stabilized, geopolitics have come to the fore, complicating an already fragile global growth outlook.

It began with the United States’ special operation to exfiltrate Venezuelan President Nicolás Maduro. Then, in late February, the conflict with Iran and the closure of the Strait of Hormuz resulted in logistical constraints and a sharp increase in the price of oil, natural gas, fertilizers and other key industrial inputs.

The resulting disruption to critical global supply chains has further eroded household purchasing power, magnifying affordability concerns worldwide. At the same time, U.S. tariffs on metals, autos and other sectors remain in place, with additional action still possible in the leadup to the review of the Canada–United States–Mexico Agreement (CUSMA).

Taken together, these developments are reshaping Canada’s export outlook—potentially lifting near-term growth, but increasing downside risks over the medium term. Export Development Canada’s (EDC) latest Global Export Forecast points to strong headline growth for Canadian exports in 2026. That strength, however, is largely driven by the favourable commodity price environment—and is likely to prove temporary.

Commodity prices drive Canada’s export growth in 2026

Higher global energy prices are the primary driver. With the Strait of Hormuz disruption constraining supply, oil and gas prices have moved sharply higher, boosting the value of Canadian energy exports. At the same time, prices for metals—particularly gold and copper—remain elevated, further supporting export values.

This price environment is expected to push overall export growth above 7% in 2026. But the momentum is unlikely to be sustained, as supply chains adjust and prices ease. We expect export growth to slow materially in 2027, to slightly more than 2%.

Sector outlook uneven as tariffs and supply pressures persist

While stronger commodity prices are lifting headline exports, the benefits won’t be evenly distributed. Energy and metals exports are expected to see the largest gains in the near term, driven almost entirely by higher prices rather than volume gains. In contrast, sectors tied to manufacturing—particularly autos—continue to face significant headwinds from tariffs and production disruptions.

Elsewhere, the picture is more mixed. Agri-food exports are stabilizing after recent tariff-related challenges, supported by improved market access and strong production, but remain exposed to weather risks. Services exports continue to expand steadily, benefiting from travel and technology-related demand. Other sectors—including fertilizers, chemicals and aerospace—are shaped by a combination of higher input costs, supply chain disruptions and firm global demand.

Global uncertainty and rising costs weigh on exporters’ outlook

While Canada’s export outlook has strengthened in the near term, largely due to higher prices, the underlying environment has become more uncertain. The longer disruptions in global energy markets persist, the greater the risk that higher fuel, fertilizer and transportation costs will undercut broader economic conditions.

Tighter financial conditions, elevated input costs and ongoing geopolitical tensions could weigh on global demand and trade flows. For Canadian exporters, this means navigating a more volatile environment—where strong top-line performance may mask rising costs and operational risks.

The bottom line: Strong growth today, sustainability in question

Canada’s exports are set to grow strongly in 2026—but that growth is driven largely by prices, making it more of a short-term surge than sustainable, repeatable expansion. Durable growth will depend on investment and continued development of trade-enabling infrastructure.

Higher commodity prices are boosting headline performance, but they also reflect a more fragile and uncertain global environment. As these price effects fade, growth is expected to slow and risks to the outlook will become more apparent. For exporters, the challenge will be sustaining momentum in a world where volatility—not stability—is becoming the norm.

For more insights, watch EDC’s Global Economic Outlook webinar, featuring EDC’s deputy chief economist Ross Prusakowski and other experts on what shifting global conditions mean for exporters in 2026.

This week, a very special thanks to Ross Prusakowski, deputy chief economist and director of EDC’s Country and Sector Intelligence team.

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