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Trade Partner Profile: The European Union

Canadian Economics

By: CBoC Economics Team

    

The European Union is Canada’s second largest trading partner, with Canada exporting $34 billion and importing $84 billion in 2024.

  • Two-way trade has been growing over the past decade, with exports up over 57 per cent between 2015 and 2024, while imports have increased by 61 per cent over the same period. This compares to nominal Canadian GDP growth of 53 per cent over the same period, suggesting a deepening of our trade relationship. The Canada-European Union Comprehensive Economic and Trade agreement (CETA), which was ratified in 2017, likely contributed to the strong trade growth.
  • Canadian imports from the EU primarily consist of advanced manufactured products, including pharmaceutical and other medical products, aircraft parts and other transportation equipment such as passenger and agricultural vehicles and parts.
  • Canada’s major exports to the EU include natural resources—oil, uranium, iron and other precious metals—as well as advanced manufacturing products, such as aerospace products.
  • The European Union’s largest imports align with many products in which Canada specializes, presenting opportunities to further expand Canadian market share. Key areas for growth include liquefied natural gas (LNG), iron, aerospace products, agriculture, and critical minerals.
  • The European Union is also facing tariff threats from the United States. As a result, Canada could shift some of its imports from American suppliers to European ones, while Europeans buyers may look to Canada as an alternative to American products, especially for their energy needs. Some examples of major imports that could be switched from American to European producers include passenger vehicles, aerospace products, farming equipment and pharmaceuticals.
  • Trade between Canada and the European Union is already strong, providing a solid foundation for future expansion. Canada exports many resources to Europe, and the bloc’s import patterns suggest room for Canadian products to gain further market share. At the same time, Canada benefits from Europe’s strength in high-end manufacturing. While slower economic growth in the EU could constrain upside potential, it remains a wealthy market where Canada has a well-established presence.

Chart 1: What Canada exports to the European Union

($CAD, millions)

Bar chart showing the largest exports from Canada to the European Union. The exports presented, in order of magnitude, are iron ore, uranium, oil, pharmaceuticals, diamonds, wheat, nickel, coal

Sources: Trade Data Online, The Conference Board of Canada

Chart 2: What the European Union Imports from the World

($US, billions)

Bar chart showing the largest imports of the European Union. The imports presented, in order of magnitude, are Oil, Natural Gas, Pharmaceuticals, organic chemicals, plastics, chemical products, ores slag and ash (mostly iron), seafood products, inorganic chemicals, fruits and nuts, coal. Some bars are highlighted in red to indicate export opportunities for Canada. These are: Oil, natural gas, pharmaceuticals, ores slag and ash (mostly iron), seafood products and coal.

Sources: U.N. Comtrade, The Conference Board of Canada

Note: Bars highlighted in red indicate export opportunities for Canada.

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