Canada has a vision and strategy to diversify global trade, but are our companies ready to do what it takes to execute?

Another stalled trade negotiation with the United States brings Canadians back to the new path they started to trek more than a year ago: trade diversification with new partners worldwide. 

Canadians are still fiercely supportive of pushing back on the U.S., determined to not buy American and to look elsewhere for trade and business. But are Canadian companies, from small and medium-sized enterprises (SMEs) to larger firms, really ready to do the work required of them to make Canada stronger and more self-sustainable?

The vision: keep Canada sovereign, make Canada strong. 

The strategy: diversify trade partners, attract foreign investment, and distribute subsidies for affected sectors.

The execution: Larger businesses and SMEs need to activate and do the work in going abroad and establishing new customers.

Stronger trade diversification has been the drum beat since U.S. President Donald Trump was elected for the second time. Prime Minister Mark Carney and his team have been busy activating this strategy, and have been rigorously establishing new global trading partners and reigniting existing trade agreements in the spirit of trade diversification. 

The federal government is offering financial support for SMEs and others in order to ease the blow of yet another round of tariffs. Further, federal, provincial, and local governments have a plethora of SME support programs to encourage international expansion, beginning long before the tariff trade war threats. However, international expansion and diversification guidance are under applied by SMEs. I often observed this as a global trade consultant over the last 10 years; the curiosity is there, but sustained activation wanes. Understandably, Canada was too comfortable doing business mostly across the border versus across the oceans. 

While the government has a lot in place to enable trade diversification, the question is whether SMEs and larger companies are ready to do what it takes to execute on this larger strategy. Waiting for the “way it was” is neither an option nor a strategy, and as our ministers have said, its back to "Plan A." Truly  transformational change needs to start taking place in how Canada does business, and with whom. This is the hard work. 

It’s not easy, but it is necessary. It requires a mindset shift and the development of a cultural IQ to understand new markets and customers, what they need, and how they do business differently than what we know from the U.S. It means incorporating geopolitical risk considerations into business strategies before jumping into the next potential customer offer just because it presents itself at a vulnerable time. 

The new strategy and execution mindset should also involve business model innovation. This includes moving beyond just selling commodities and point products towards moving up the value chain into processing and other value-added solutions, which results in more revenues and supply chain security. Business model innovation also involves adapting and evolving your offer to local market preferences and relevant solutions, which is especially applicable in emerging markets. And, most simply, business model innovation is about optimizing the monetization of the products, innovations, intellectual property, and know-how—i.e. making the most money from what you have. 

Another contributor to Canada Strong success is for domestic companies to co-develop with the government a comprehensive, national industrial strategy: what are Canada’s priority sectors, geographic markets, technology investments, and so forth. What centres of excellence will Canada claim? Then, companies can align their priorities with the national strategy in order to collectively build growth and differentiation. This is particularly important for the emerging technologies sector, where the race is on between nations’ global competitiveness in AI, quantum, super computing, and more. 

Closer collaboration between government and the private sector is not only good for business, it also fuels economic and national security. 

A comprehensive industrial strategy will also move Canada away from tactical negotiations on a piecemeal sectoral basis, and enable a broader negotiation approach, allowing for clearer decisions about what is on the table. 

Canadians are very angry at the U.S.’s tactics—I hear it everywhere. Now is the time to transform this heat into the execution of a long-term plan, a mindset shift, and a new way forward with agility.  

It’s time to transform SMEs’ approach away from trekking exploratory “trial” paths through the international expansion forest, and then letting the weeds grow after short-lived, unsuccessful attempts only to revert to the known roads that no longer exist.  

It’s time to pave new roadways to new markets with long-term value. Let the hard work begin.

Amy Karam is a senior fellow with the Graduate School of Public and International Affairs at the University of Ottawa, and a senior adviser at StrategyCorp.

The Hill Times