By Daniel Araya

Confronted by a perilous convergence of trade shock, underinvestment and population churn, the

Canadian economy

is now facing enormous headwinds. The

Organization for Economic Co-operation and Development

forecasts a very gloomy future for Canada, with little or no economic growth on the horizon. Navigating this new reality will require careful planning.

The challenges facing the Canadian economy are about more than recent trade disputes with the United States; they are about a changing geopolitical order. Given the abundance of opportunities found outside North America, it’s time for Canadians to prioritize trade with Asia. Diversifying toward Asia is not only prudent, it is necessary for Canada to realize its economic potential.

For much of our country’s history, Canadian prosperity has been tethered to the economic development of the U.S. Currently, three-quarters of Canadian exports flow south of the border. However, Washington’s embrace of protectionism and restrictive trade measures has exposed Canada’s unique economic and political vulnerability.

Indeed, even as America’s electorate favours isolationism and the country’s global primacy wanes, Canada risks becoming hostage to American decline. Diversifying trade, especially trade with growing markets in Asia, is critical to strengthening Canada’s economic resilience.

For Canada — a trading nation — deeper engagement with Asia offers enormous opportunities.

In agriculture, Canadian wheat, canola and pulses already enjoy a strong reputation across Asia. In energy, Asian demand for

liquefied natural gas

(LNG) is surging as countries transition away from coal. And in technology, Asian states are becoming the world’s largest markets for investments in

artificial intelligence

(AI), quantum computing, clean energy and robotics. Canada’s reputation as a technology leader is an asset that could translate into strategic opportunities.

Policy action on Asia is long overdue

The truth is that policy action on trade with Asia is long overdue. By strengthening ties with Asia, Canada would secure economic resilience

and

enhance its diplomatic leverage, navigating the shift to a multipolar order. Most importantly, by engaging more deeply with Asia, Canadian industries would have the exposure they need to grow in markets that North America and Europe simply can no longer match.

Asia is now the engine of the global economy, accounting for more than 40 per cent of global

gross domestic product

and is projected to surpass 50 per cent by the end of this decade. Taken together, India, China and Southeast Asia represent more than 3.5 billion consumers in some of the fastest-growing economies in the world.

Asian-Canadians make up 20 per cent of Canada’s population (about seven million people) and are projected to reach 30 per cent to 35 per cent by 2073, providing a unique economic and cultural bridge to the Asian region.

Asia’s expanding middle class will soon be the world’s largest consumer market, driving surging demand for food, energy, infrastructure and advanced manufacturing — sectors where Canadian exports are globally competitive.

By securing our place in Asian trade networks, Canada could reduce its structural vulnerability and unlock new growth opportunities in a world that is no longer organized around American unipolarity.

Becoming a strategic nation

Proximity to the U.S. has been uniquely beneficial to Canada, but it has also left Canadians vulnerable to America’s political volatility and social decay. Shifts in U.S. policy — such as protectionist trade measures or abrupt changes in energy policy — are deliberately designed to disrupt Canadian industries and risk eliminating certain export markets altogether.

Expanding into Asia would dilute these risks, giving Canadian exporters more resilience and greater bargaining power.

Building on established Canadian trade agreements such as the

Comprehensive and Progressive Agreement for Trans-Pacific Partnership

and ongoing negotiations over free trade with the Association of South-East Asian Nations, Canada should begin to chart a new path.

This would mean:

  • Accelerating infrastructure investment to connect Canadian resources to Asian markets, particularly through Pacific shipping, ports and rail corridors;
  • Deepening trade diplomacy, leveraging bilateral agreements with India, Indonesia, Vietnam and China;
  • Investing in export promotion, supporting Canadian small and medium-sized enterprises (SMEs);
  • Navigating Asian regulatory systems and consumer preferences;
  • Aligning our immigration and education policies with trade strategy: attracting Asian scientists, entrepreneurs and professionals in order to build long-term cultural and economic networks.

In sum, the pivot to Asia is less an option than an imperative for Canada’s long-term sovereignty and prosperity.

Strategically, deepening trade ties with Asia enhances Canada’s geopolitical autonomy and positions it as a key player in a multipolar world order. Our continued over-reliance on the U.S. market is unsustainable in an era of geopolitical realignment. Asia represents not just an alternative to dependence on the U.S., but the defining arena of 21st-century trade and finance.

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Canada’s comparative advantages — its food security, critical minerals and high standards in health care, digital services and education — align directly with Asia’s long-term needs. The choice is clear: adapt and engage with Asia’s rise, or risk watching the global economy’s centre of gravity shift beyond Canada’s reach.

Daniel Araya is a Centre for International Governance Innovation senior fellow, a senior partner with the World Legal Summit and a consultant and an adviser with a special interest in artificial intelligence, technology policy and governance.