How many free trade agreements does Canada have?
Canada is a trading nation. It’s estimated that 1 in 6 jobs in Canada is related to the export of goods. An article published by the Bank of Canada entitled "The Benefits of Freer Trade” notes that economists estimate that incomes in Canada are 15-40% higher thanks to freer trade, and trade has provided consumers with a greater selection of goods and services at lower prices. To help facilitate trade, Canada has signed Free Trade Agreements with individual countries and blocs of nations, giving Canadian businesses and consumers access to more markets with fewer barriers.
In 2024, the value of Canada’s imports and exports reached $1.5 trillion, of which 85% were exchanged with countries with which Canada has signed free trade agreements.
Canada’s free trade agreements
According to the Business Development Bank of Canada, the aim of a free trade agreement (FTA) is to facilitate trade and eliminate financial trade barriers such as tariffs, and technical barriers, including laws, regulations, standards, and testing and certification processes. According to the treaties, barriers are either removed on the day the free trade agreement takes effect or over a defined period of time.
Canada has 15 active free trade agreements, giving it favourable access to the markets of 51 countries. Collectively, these nations represent 66% of the world’s total gross domestic product. Eleven free trade agreements are bilateral deals between Canada and one other country. The remaining four — Canada-United States-Mexico Agreement (CUSMA), Canada-European Union Comprehensive Economic and Trade Agreement (CETA), Canada-European Free Trade Association (EFTA) Free Trade Agreement, and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — are trade deals involving multiple countries.
Free trade agreements boost two-way trade
Generally, free trade agreements boost two-way trade. We analyzed the value of imports and exports for the five years leading up to a free-trade agreement, inclusive of the year it came into effect, and the five years after the deal came into force for trends. Trade data is only available from 1999 onwards. Therefore, our analysis excludes the Canada-Chile Free Trade Agreement and the Canada-Israel Free Trade Agreement, which came into effect in 1997, and the Canada-UK Trade Continuity Agreement, which came into effect in 2021. We also excluded CUSMA as it replaced the North America Free Trade Agreement (NAFTA), which took effect in 1994. Trade data with Chile is included in trade statistics with CPTPP, as Chile is a signatory to the free trade agreement.
Of the 10 free trade agreements we analyzed, eight resulted in increased two-way trade between Canada and the partner country or bloc of countries, while two saw declines. On average, the total value of imports and exports rose by 26% in the five years following the agreement’s implementation, compared to the five years prior.
