Canadian exports to China surged by 30% in the first half of 2026, as per data analyzed by researchers at Statistics Canada. The overall trade between the two countries increased by 3.6% year over year during this period. These numbers are part of a recent report released by the Canada China Business Council and the University of Alberta’s China Institute, indicating a strengthening trade relationship between Canada and China amid efforts to diversify the Canadian economy given strained ties with the U.S.
The total trade in goods between Canada and China reached $66.6 billion in the first half of 2026, with exports soaring by 30% to $21.74 billion compared to the previous year. Energy and minerals were the primary drivers of this growth, constituting 58.4% of all Canadian exports to China. Notably, energy exports, including crude oil and liquified propane, witnessed an impressive 81.8% surge, while metal ores and non-metallic mineral exports, such as copper ore, increased by 29%.
The recent uptick in trade can be attributed to various factors, including the warming diplomatic and economic relations between Canada and China following years of tensions, especially around the arrest of Huawei executive Meng Wanzhou in 2018. As Canada aims to reduce its dependence on the U.S., Prime Minister Mark Carney has emphasized the importance of forging new trade alliances with other nations.
Moreover, the Trans Mountain Pipeline operating at near-full capacity in June has significantly enhanced Asia’s access to Western Canadian crude oil. The disruptions in oil shipments caused by the U.S.-Israeli conflict with Iran have also played a role in driving customers towards Canadian oil producers. Mark Maki, CEO of Trans Mountain, forecasts that Asia could potentially account for 70% of Canada’s oil exports by 2028.
In a significant trade agreement, Carney negotiated with Chinese President Xi Jinping to allow the entry of tens of thousands of Chinese electric vehicles into the Canadian market in exchange for tariff adjustments on Canadian agricultural products, such as canola meal and peas. This deal has led to positive outcomes for Canadian farmers, with canola seed prices rebounding from a low of $12 to $17 per bushel.
While the trade deficit with China decreased by 25% due to a 5.8% decline in imports, there are concerns about Canada’s reliance on China for specific commodities. The report highlights that while some sectors, like agricultural exports, have shown modest improvements, there is room for diversification and broadening trade ties with other regions in the Asia-Pacific market to sustain long-term growth. Overall, Canada remains on track to achieve its goal of boosting exports to China by 50% by 2030, with the potential to surpass this target.