Latin America’s US$6 trillion economy dwarfs Canada, yet Canada exports only $18.6 billion there
Canada’s portfolios are still heavily tied to a trading partner that is openly weaponizing tariffs, while a US$6tn neighbouring region with deep Canadian roots remains underused.
According to the Canadian Council for the Americas (CCA), Latin America is “the neglected ... close cousin of Canada,” in the words of report co‑chair Janice Stein, as reported by The Canadian Press.
She argued that Canada should stop treating the region as an afterthought and start using existing trade deals and relationships more strategically.
For institutional investors, the case is straightforward: diversification, growth and geopolitical hedging.
According to RBC’s Trade Zone, Latin America’s GDP sits around $6tn, more than double Canada’s and more than double its size 20 years ago, yet Canadian exports to the region were just $18.6bn in 2024 and fell nearly 11 percent that year as agri‑food shipments were disrupted.
RBC said simply focusing on Brazil, Mexico, Chile, Colombia and Peru would give access to nearly 500m people, about half of them middle class.
RBC added that Canada has spent 25 years signing free trade deals in the region, but “most did much less than was promised.”
One example: $24bn of Canadian investment in Chile and less than $1bn in exports.
The CCA report points to specific levers that matter for long‑term capital:
• Infrastructure: Build consortium approaches to help close an estimated $150bn infrastructure gap in transport, energy and digital systems.
• Energy and critical minerals: Focus on LNG, pipelines, mining technology and critical minerals partnerships that include processing, not just extraction.
• Megaprojects: Target machinery and equipment (such as buses and tunnelling equipment) tied to large projects.
• Services and security: Use Canada’s strength in services, cybersecurity, defence and security tech (including space) as export assets.
• Labour mobility: Get more sophisticated about attracting students, skilled workers and entrepreneurs from the region.
John Price of Americas Market Intelligence said Canada’s mining sector needs more predictable, favourable regulation to reinforce its claim to responsible resource extraction, according to The Canadian Press.
He noted that Latin American governments look to Canadian firms for higher environmental standards but face urban voters who associate mining with “dirty practices” and “bad labour practices.”
He said Canada has “the track record,” built over “decades of mistakes” and pressure from local communities.
Price told The Canadian Press that Canadian firms should propose joint projects on critical minerals such as lithium that bundle mining, processing and even battery production, arguing that many governments want to reduce China’s dominance in rare‑earth processing.
At the same time, groups such as MiningWatch Canada warn that federal oversight of Canadian miners abroad still lags European standards for business and human rights.
Services are already pulling more of the diversification weight.
RBC said services now make up nearly a quarter of Canada’s exports and account for 62 percent of real export growth since 2014.
Services trade is more geographically diversified—about a 50/50 split between US and non‑US markets—compared with goods, 75 percent of which still go south.
In agri‑food, RBC highlighted pulses as a live example of successful diversification.
Canada is the world’s largest exporter of pulses, with about 24 percent of global trade.
Top markets for dried lentils and peas include India, Turkey, the UAE, Colombia and Peru.
RBC said exports of dried peas and lentils were close to $4bn in 2024, with global pulse consumption expected to rise 15 percent over the next decade.
RBC argued that Canada’s wider export strategy can learn from this playbook: scaling domestic production, investing in logistics and targeting markets where demand is set to grow.
All of this is happening as Ottawa races to reduce its exposure to US policy risk.
Business Insider reported that, as of November, the US has imposed a 35 percent tariff on Canadian goods not covered by the US–Mexico–Canada Agreement (USMCA), and a 50 percent duty on Canadian steel and aluminum.
Canada has matched some of these measures, while US President Donald Trump has repeatedly threatened to end trade talks.
According to Business Insider, Canada has responded by signing a comprehensive free‑trade agreement with Indonesia, securing a bilateral investment treaty and expanded air pact with the United Arab Emirates, fast‑tracking a previously stalled deal with India and pushing for a free trade agreement with ASEAN by the end of 2026.
A federal campaign page now declares “diversification is a national imperative,” Business Insider said.
Phil Luck of the Center for Strategic and International Studies told Business Insider that Canada “took our extreme turn in our trade relationship with them pretty seriously,” and warned that the US risks long‑term reputational damage with allies who see tariffs as personal and unpredictable.
At the same time, The New York Times reported that the Trump administration has started hearings to revisit USMCA, with US Trade Representative Jamieson Greer saying Trump could decide next year to withdraw.
The paper said officials have discussed turning the three‑country pact into two bilateral deals and that Trump has suggested the US should stop importing Canadian cars, lumber and other goods.
Canada has concentrated exposure to a politicized US trade relationship and has under‑used opportunities in a growing, familiar hemisphere where it still has “its largest and historically deepest footprint,” in the words of CCA president Ken Frankel, cited by The Canadian Press.
