Global Affairs Canada released a report entitled State of Trade 2026 that provides clear evidence of the importance of trade in services to modern economies. While the report covers the Canadian situation only, government and business in both Canada and Caribbean need to recognize the role of services and ensure that their policies are tailored to advance the services economy.
State of Trade 2026 paints a clear picture of how international trade is demonstrating a clear structural shift: services are no longer a niche complement to goods — they are a central driver of export growth, resilience, and diversification. Between 2010 and 2025 services exports tripled in value and were the sole contributor to Canada’s $50 billion export gains since 2022, underscoring how digitally enabled and commercial services are reshaping Canada’s international economic footprint.
Why services matter now
- Scale and resilience. Services exports grew faster than goods and are less exposed to tariffs and commodity price swings, making them a stabilizing force for Canada’s trade balance.
- Diversification away from the U.S. Services are less U.S.-centric than goods: just over half of services exports go to the U.S., compared with more than 70% of goods exports, helping Canada broaden market exposure.
- Four delivery channels. The report highlights four ways services cross borders: digitally enabled services, services requiring movement of people, services embodied in goods, and services sold via commercial presence abroad — each with distinct policy and business implications.
Key trends to watch
- Digitally enabled services are scaling fast. These services — software, data, professional and financial services delivered remotely — accounted for 13% of exports in 2025 and have grown at more than twice the pace of goods exports since 2010.
- Commercial presence remains dominant. Sales by Canadian foreign affiliates in services reached $1.0 trillion in 2024, showing that local presence abroad still matters even as remote delivery expands.
- Services value-added in goods. Over 17% of the value of goods exports in 2024 came from domestic services value-added (R&D, design, software), highlighting the invisible but critical role of services in goods competitiveness.
Implications for business and policy
- For firms: Invest in digital delivery capabilities, cloud and data infrastructure, and talent that can scale services internationally. Consider hybrid models that combine remote delivery with targeted local presence.
- For policymakers: Strengthen digital infrastructure, streamline cross-border data flows with robust privacy protections, and negotiate services-friendly provisions in trade and investment agreements to reduce regulatory friction across the four delivery channels.
- For educators and workforce planners: Prioritize skills that support digitally enabled services — software, data analytics, cybersecurity, and professional services — and ensure immigration and mobility policies support temporary movement where needed.
The full State of Trade 2026 report is found here State of Trade 2026: The rise of services in Canada’s trade landscape