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Defying Gravity

Diversifying Canada’s Trade

About the Defying Gravity Project

How can Canada defy the gravitational pull of the U.S. to diversify its trade and strengthen its sovereignty?

Diversifying Canada’s trade will be one of the most significant policy challenges for Canada over the coming decade. The extent to which we can successfully diversify will determine the trajectory of our country’s economic growth, the resilience of our sovereignty and the prosperity of our local communities.   

In economics, the gravity model predicts that countries trade more with large, nearby economies. The gravitational pull of the U.S. – the world’s largest economy and Canada’s neighbour – is strong, which means government policy tools that help Canadian businesses defy gravity and expand into new markets will be increasingly important.  

Those tools need to be carefully designed and grounded in rigorous analysis and evidence. Our research project aims to provide that analysis and evidence through collaborations with leading experts, and a series of research papers, commentaries, data dashboards and events.

Defying Gravity: The Compelling but Challenging Case for Diversifying Canada’s Trade

Amid U.S. President Donald Trump’s on-again-off-again trade war, trade diversification has been the talk of the town. But for a country like Canada, diversifying trade will be no easy feat. It also shouldn’t be the goal in and of itself. This paper explores the ultimate objectives of trade diversification; it presents a diversification plan, identifies what stands in the way of implementation, and proposes a pathway to develop policy solutions to overcome obstacles.

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Op-eds

Project team

Christopher Ragan

Max Bell Foundation Senior Fellow at the IRPP

Rachel Samson

Vice-President, Research

Shaimaa Yassin

Senior Research Director

Ricardo Chejfec

Research Director

Dena Abtahi

Research Associate

Nicolas Côté

Research Associate

Georges Rigas

Research Associate

Advisory Council

Christopher Ragan (co-chair)

Max Bell Foundation Senior Fellow at the IRPP

Rachel Samson (co-chair)

Vice-President of Research at the IRPP

Stuart Bergman

Vice-President and Chief Economist, Export Development Canada

Laurent Carbonneau

Vice President of Policy and Advocacy, Council of Canadian Innovators

Matthew Foss

Vice-President, Research and Public Policy, Canadian Council for Indigenous Business

Patricia Goff

Professor, Balsillie School of International Affairs, Wilfrid Laurier University

Ruhee Ismail-Teja

Vice-President, Policy and External Affairs, Calgary Chamber of Commerce

Meredith Lilly

Professor and Simon Reisman Chair in International Economic Policy, Carleton University’s Norman Paterson School of International Affairs

Stephen Tapp

Chief Executive Officer and Chief Economist, Centre for the Study of Living Standards

Ari Van Assche

Professor, Department of International Business, HEC Montreal

Specialist Contributors

Jacob Greenspon

(Place-based and regional implications)

Glen Hodgson

(Investment)

Funders

This project was made possible in part thanks to support from the Clean Economy Fund, Export Development Canada and the Max Bell Foundation. The IRPP is an independent think tank and retains control over the scope, methodology, conclusions and recommendations of our work.

Christopher Ragan

Max Bell Foundation Senior Fellow, IRPP

Rachel Samson

Vice-President, Research

Shaimaa Yassin

Senior Research Director

Ricardo Chejfec

Research Director

Dena Abtahi

Research Associate

Nicolas Côté

Research Associate

Georges Rigas

Research Associate

Stuart Bergman

Vice-President and Chief Economist, Export Development Canada

Laurent Carbonneau

Vice President of Policy and Advocacy, Council of Canadian Innovators

Matthew Foss

Vice-President, Research and Public Policy, Canadian Council for Indigenous Business

Patricia Goff

Professor, Balsillie School of International Affairs, Wilfrid Laurier University

Ruhee Ismail-Teja

Vice-President, Policy and External Affairs, Calgary Chamber of Commerce

Meredith Lilly

Professor and Simon Reisman Chair in International Economic Policy, Carleton University’s Norman Paterson School of International Affairs

Stephen Tapp Photo

Stephen Tapp

Chief Executive Officer and Chief Economist, Centre for the Study of Living Standards

Ari Van Assche

Professor, Department of International Business, HEC Montreal

Ari Van Assche (PhD in Economics, University of Hawaii at Manoa) is full professor in international business and co-director of the International Institute of Economic Diplomacy at HEC Montreal. He is a senior fellow at the Centre for Strategic Statecraft, editor-in-chief of the Journal of International Business Policy, a visiting professor at the University of Leeds, a fellow at the Academy of International Business, a research fellow at CIRANO, and a fellow-in-residence at the C.D. Howe Institute. He specializes in the organization of global value chains and their implications for public policy.  

Jacob Greenspon

Doctoral Candidate in Economics, Oxford University

Jacob Greenspon is the Research Manager at the Harvard Kennedy School Reimagining the Economy Project and a Doctoral Candidate in Economics at the University of Oxford. He has previously served as a consultant on energy transition research at Resources for the Future and the World Bank and worked as an economist at several think tanks and government organizations in Canada and the US. He holds a Master in Public Policy from the Harvard Kennedy School of Government, a MA in Economics from Queen’s University, and a BA in Economics and Political Science from McGill University

Glen Hodgson

Chief economist, Momentus Global

Glen Hodgson has more than 40 years of experience in global macro-economics, international finance, fiscal policy and climate policy. Glen’s career has spanned time at the Canadian Department of Finance, the International Monetary Fund in Washington D.C., Export Development Canada and the Conference Board of Canada, where he was senior vice-president and chief economist for more than a decade. His current affiliations include chief economist with Momentus Global, and senior fellow at the C.D. Howe Institute. He is a graduate of McGill University (MA and PhD candidate in economics, 1981) and the University of Manitoba (BA Honours, 1978).