Canadian exports to China surged by 30% in the initial half of 2026, as per Statistics Canada data scrutinized by analysts. The overall trade between the two countries increased by 3.6% year over year. The figures, sourced from a recent report by the Canada China Business Council and the University of Alberta’s China Institute, signify a rejuvenation in the economic ties between the nations amid strained relations with the U.S.
During the first half of 2026, the total trade in goods between Canada and China amounted to $66.6 billion, showing a 3.6% growth, while exports soared by 30% to $21.74 billion annually. The primary exports were energy and minerals, constituting 58.4% of all domestic exports to China during that period. Energy, particularly crude oil and liquified propane, witnessed a remarkable 81.8% surge. Additionally, exports of metal ores and non-metallic minerals, including copper ore, increased by 29%.
The upsurge in trade is attributed to various factors, including the recent warming of diplomatic and economic relations between Canada and China after years of tension, notably following the arrest of Huawei executive Meng Wanzhou in 2018. Concurrently, with escalating trade conflicts between Canada and the U.S., Canadian Prime Minister Mark Carney emphasized the nation’s pursuit of diversifying trade partnerships and reducing dependence on the U.S.
The Trans Mountain Pipeline’s increased capacity to 97% in June significantly augmented Asia’s access to Western Canadian crude oil. Furthermore, disruptions in oil shipments through the Strait of Hormuz due to the U.S.-Israeli conflict with Iran led to higher oil prices, prompting customers to turn to alternative oil producers like Canada.
Despite existing tensions, there is a noted mutual benefit in trade relations between Canada and China, as remarked by Anton Malkin, head of research at the University of Alberta’s China Institute. Mark Maki, CEO of Trans Mountain, projected that Asia could potentially account for 70% of Canada’s oil exports by 2028, emphasizing the region’s significance as a key market for Canadian oil.
The trade landscape experienced a notable shift in the first half of 2026, marked by a trade agreement between Carney and Chinese President Xi Jinping, facilitating the entry of Chinese electric vehicles into the Canadian market in exchange for tariff concessions on Canadian agricultural products. This accord positively impacted the agricultural sector, particularly the canola industry, leading to a rise in prices and improved market access.
The surge in exports was primarily driven by Alberta and British Columbia, benefiting from increased trade in energy, minerals, forestry, and agriculture. Despite the overall growth in trade, import numbers declined by 5.8% year over year, attributed partly to a shift of certain manufacturing activities to countries like Vietnam. The authors of the trade report highlighted modest improvements in the agricultural sector, with notable growth in canola seed and pea exports, though lobster exports experienced a decline.
Farmers are now aiming to diversify their markets and reduce reliance on a single trading partner, especially considering the temporary nature of the tariff agreements with China. The trade report emphasizes the potential for enhanced engagement with the Asia-Pacific region, especially with China being a significant market opportunity. The projections indicate that Canada is on track to achieve its goal of increasing exports to China by 50% by 2030, with the potential to surpass this target.