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Trade Partner Profile: United Kingdom

Canadian Economics

By: Signal49 Research Economics Team

    

  • The United Kingdom (U.K.) is Canada’s third largest trading partner, behind the United States and China. In 2024, Canada exported $28.3 billion goods to the U.K. and imported $9.2 billion.
  • While the UK is an important trading partner, it represents only a small share of Canada’s exports. In 2024, the U.K. represented only 3.6 per cent of exports and 1.2 per cent of imports.
  • Trade has grown between the two countries over the last two decades. However, trade growth has been limited by the U.K.’s relatively weak growth compared to the global average in recent years, but the size of the country’s economy, and the historical relationship, provides a degree of upside.
  • Gold is Canada’s top export to the UK. Since 2010, gold has represented over 50 per cent of the value of Canadian exports to the U.K. and has been rising each year reaching 78.5 per cent of total exports in 2024 – valued at over $22.2 billion.
  • Crude oil is the second largest export to the UK, representing 2.6 per cent of exports ($726 million), followed by radioactive chemicals at 2.5 per cent of exports ($714 million). Oil exports are an opportunity for Canada, as it represents such a small share of total exports to a top trading ally, but eastward oriented capacity is limited.
  • The UK is an important source of foreign direct investment for Canada, ranking second after the United States. There are more than 1,100 UK affiliates that employ over 169,000 people in Canada.
  • Canada’s main imports from the U.K. center around transportation equipment, with the largest imports in 2024 being turbojets ($1.1 billion), petroleum oils ($908 million), motor vehicles ($850 million), and aircraft parts ($830 million).
  • Following the UK’s departure from the European Union in January 2020, Canada signed a new trade deal the Canada-United Kingdom Trade Continuity Agreement which entered into force April 1st, 2021. The Trade Continuity Agreement preserves preferential market access, for both Canadian and UK businesses and does not expire.
  • The two countries are currently working on a new trade agreement, but have run into issues mostly around agricultural products. While agricultural exports including food manufacturing make up 13.0 per cent of Canada’s total exports, they only make up 3.5 per cent of those going to the U.K., providing an opportunity if a trade agreement can be reached.
  • Trade has expanded since 2021, though much of that increase can be attributed to gold. Outside gold, areas that have seen relatively strong growth are powered aircrafts and parts to aircrafts, beauty products, and pharmaceuticals.
  • With both the U.S. and China weaponizing trade, trade with the UK offers a substantial opportunity for diversification with a country that has deep historic ties.
  • The U.K. represents a key market for Canada’s natural resources and is an opportunity to diversify from gold which makes up a substantial share of exports. Also, as U.S. auto tariffs increase on all trading partners, the automobiles and parts trade between the two countries presents a valuable opening for both countries.
  • Services, particularly tourism, also present an opportunity for Canada, as the U.K. accounts for only 13 percent of overseas visits and remains below pre-pandemic levels.
  • Canada and the U.K. enjoy strong relations and a multifaceted defence partnership, as personnel serve on reciprocal exchange and professional development programs. The U.K. is also one of the top export destinations for Canadian defence products and services and presents a mutually beneficial opportunity to strengthen bilateral trade as military spending is likely to rise in both countries.

Chart 1

What Canada Exports to United Kingdom

($CAD, billions, 2024)

Bar chart indicating Canada’s largest exports to the U.K. in 2024. In order of largest to smallest, they are: gold, petroleum oil, Radioactive chemical elements, Powered aircrafts, Wheat and meslin, Fuel wood, beauty or make-up preparations, aircraft parts

Sources: Trade Data Online, Signal49 Research

Chart 2

What the U.K. Imports From Around the World

($CAD, billions, 2024)

Bar chart indicating the United Kingdom’s largest imports from the world in 2024. In order of largest to smallest, they are: gold, mineral fuels, motor vehicles and parts, aircraft parts, smartphones, pharmaceutical products, data-processing machines.

Note: Bars highlighted in red indicate export opportunities for Canada.
Sources: Trade Data Online, Signal49 Research

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