How concentrated are Canadian exports across provinces and territories?
Deconstructing destination, product, and origin Herfindahl-Hirschman Indices (HHI) from 1988 to 2025
National trade accounts report Canada's overall merchandise export concentration as a single aggregate: in 2025, the national destination market concentration ratio stood at 0.52 on a normalized Herfindahl-Hirschman scale of 0 to 1, while national product concentration was 0.10 (Statistics Canada Table 12-10-0129-01). These national metrics reflect Canada's high reliance on the United States as an export destination paired with an internationally broad commodity basket.
However, trade exposure is not distributed evenly across the Canadian federation. Under the Canadian Constitution and geography, provincial economies possess distinct natural resource endowments, logistics infrastructures, and industrial bases. This investigation examines 38 years of official Statistics Canada concentration indices (1988–2025) and UNCTAD international benchmarks to document how export market and product concentration vary across Canada's ten provinces and three territories.
Destination market concentration ratios for domestic merchandise exports in 2025. Ratios range from 0.19 in Newfoundland and Labrador to 0.82 in New Brunswick and Yukon (national average: 0.52).
The data demonstrates substantial dispersion in buyer concentration across provinces. At the upper boundary, New Brunswick (0.82) and Alberta (0.74) report the highest destination concentration ratios among the provinces. Per StatCan trade by industry records (Table 12-10-0176-01), New Brunswick's merchandise export value is concentrated in petroleum refinery shipments from the Saint John complex to the US East Coast, while Alberta's export value is led by pipeline transmission of heavy crude oil into the US Midwest and Gulf Coast.
Conversely, Newfoundland and Labrador records the lowest destination concentration ratio in Canada at 0.19, followed by Saskatchewan (0.30) and British Columbia (0.31). Newfoundland's primary export commodities (offshore crude petroleum, iron ore, and frozen seafood) clear customs to European, Asian, and transatlantic markets directly. Saskatchewan's agricultural commodities and potash are dispersed internationally across China, India, Brazil, and Southeast Asia, and British Columbia operates as a Pacific gateway shipping metallurgical coal, softwood lumber, and copper concentrates into East Asian economies.
Comparison of export destination concentration ratios with all trading partners versus excluding the United States (2025). Excluding the US causes the national concentration ratio to decline from 0.52 to 0.10 (-80.8%).
When the United States is excluded from trade calculations ('Countries other than the United States'), destination concentration ratios drop below 0.10 across most provinces: New Brunswick falls from 0.82 to 0.05 (-93.9%), Prince Edward Island from 0.66 to 0.05 (-92.4%), Quebec from 0.52 to 0.05 (-90.4%), and Saskatchewan from 0.30 to 0.05 (-83.3%). Two jurisdictions do not show this decline: Northwest Territories (0.61 to 0.62) and Nunavut (0.36 to 0.36), because their mineral exports (rough diamonds and base metals) are predominantly cleared through European trade hubs (Belgium and the UK) rather than the United States. Ontario's non-US ratio remains at 0.32, reflecting concentrated precious metal shipments (unwrought non-monetary gold) to the United Kingdom.
Bivariate distribution of destination concentration versus product concentration in 2025. Northwest Territories exhibits complete product concentration (1.00), while Quebec and Manitoba report the lowest product concentration (0.06).
Cross-referencing destination and product concentration reveals differing profiles of export specialization. At the national level, Canada exhibits an asymmetry: destination concentration (0.52) is over five times higher than product concentration (0.10). Canada produces a diversified aggregate portfolio of goods across energy, motor vehicles, aerospace, machinery, and agri-food, but delivers the majority to a single customer.
At the sub-national level, product concentration is highest in resource-focused jurisdictions: the Northwest Territories reports a product concentration ratio of 1.00 (complete concentration in diamond mining), Yukon reports 0.85, Alberta reports 0.59 (crude petroleum and natural gas), and Nunavut reports 0.51. In contrast, Quebec (0.06) and Manitoba (0.06) exhibit the lowest product concentration ratios in Canada, followed by Canada as a whole (0.10), Ontario (0.12), and British Columbia (0.13).
- NAFTA enters into force (Jan 1994)
- Peak integration: Canada HHI 0.75, Ontario 0.87
- CUSMA enters into force (Jul 2020)
Annual destination concentration ratios from 1988 to 2025. National concentration peaked in 2000 at 0.75 and declined to 0.52 in 2025, driven largely by Ontario's de-concentration from 0.87 to 0.54.
The 38-year historical record indicates that Canada's export destination concentration followed an inverted-U trajectory over the post-1988 era. Following the Canada-US Free Trade Agreement (1989) and NAFTA (1994), Canada's national destination concentration ratio rose from 0.57 in 1990 to a historical peak of 0.75 in 2000. This rise was led by Ontario, whose destination concentration climbed from 0.75 in 1990 to 0.87 in 2000, reflecting cross-border automotive integration under the Auto Pact and NAFTA rules of origin.
Between 2000 and 2025, the trajectory diverged by province:
- Ontario experienced a sustained de-concentration in destination HHI, declining from 0.87 in 2000 to 0.63 in 2010 and 0.54 in 2025.
- Alberta's destination concentration rose from 0.57 in 1990 to 0.78 in 2000 and has remained elevated, standing at 0.74 in 2025, consistent with long-term crude pipeline infrastructure dedicated to US refining hubs.
- New Brunswick's destination concentration rose from 0.45 in 1990 to 0.75 in 2000 and 0.82 in 2025.
- Saskatchewan saw its concentration ratio moderate from 0.48 in 2005 to 0.30 in 2025 as agricultural and fertilizer exports expanded to non-US markets.
- Commodity supercycle peak
- Oil price downturn (mid-2014)
- Global energy price surge
Annual product concentration ratios from 1988 to 2025. Alberta's product concentration rose from 0.37 in 1990 to 0.59 in 2025, while Ontario's declined from 0.21 to 0.12.
While continuous time series illustrate annual volatility, calculating the discrete net change between benchmark periods isolates the long-term structural realignment of each provincial trade profile. Between the 2000 post-NAFTA peak and 2025, national export destination concentration fell by 0.23 (from 0.75 to 0.52), while national product concentration remained essentially flat (+0.01, from 0.09 to 0.10).
The two charts below report the net change in Herfindahl-Hirschman concentration ratios (Δ HHI) between 2000 and 2025 for every province and territory across both dimensions: destination market concentration and product concentration.
Net change in Herfindahl-Hirschman concentration ratios (Δ HHI) between 2000 and 2025. Negative values indicate market diversification; positive values indicate increasing concentration.
| Geography | Dest HHI (2000) | Dest HHI (2015) | Dest HHI (2025) | Δ Dest (2000–25) | Prod HHI (2000) | Prod HHI (2015) | Prod HHI (2025) | Δ Prod (2000–25) |
|---|---|---|---|---|---|---|---|---|
| Canada | 0.75 | 0.58 | 0.52 | -0.23 | 0.09 | 0.08 | 0.1 | +0.01 |
| Ontario | 0.87 | 0.65 | 0.54 | -0.33 | 0.22 | 0.15 | 0.12 | -0.10 |
| Quebec | 0.75 | 0.55 | 0.52 | -0.23 | 0.08 | 0.06 | 0.06 | -0.02 |
| Alberta | 0.78 | 0.76 | 0.74 | -0.04 | 0.41 | 0.48 | 0.59 | +0.18 |
| British Columbia | 0.45 | 0.32 | 0.31 | -0.14 | 0.14 | 0.11 | 0.13 | -0.01 |
| Saskatchewan | 0.37 | 0.31 | 0.3 | -0.07 | 0.16 | 0.15 | 0.16 | +0.00 |
| Manitoba | 0.67 | 0.49 | 0.46 | -0.21 | 0.06 | 0.05 | 0.06 | +0.00 |
| Nova Scotia | 0.68 | 0.52 | 0.49 | -0.19 | 0.12 | 0.16 | 0.16 | +0.04 |
| New Brunswick | 0.75 | 0.82 | 0.82 | +0.07 | 0.18 | 0.38 | 0.41 | +0.23 |
| Prince Edward Island | 0.8 | 0.44 | 0.66 | -0.14 | 0.2 | 0.14 | 0.17 | -0.03 |
| Newfoundland and Labrador | 0.53 | 0.47 | 0.19 | -0.34 | 0.3 | 0.5 | 0.39 | +0.09 |
| Yukon | 0.99 | 0.95 | 0.82 | -0.17 | 0.45 | 0.87 | 0.85 | +0.40 |
| Northwest Territories | 0.58 | 0.48 | 0.61 | +0.03 | 0.98 | 0.97 | 1 | +0.02 |
| Nunavut | 0.18 | 0.06 | 0.36 | +0.18 | 1 | 0.1 | 0.51 | -0.49 |
Summary matrix of concentration ratios across Canadian jurisdictions at three reference points (2000, 2015, 2025). Source: Statistics Canada Table 12-10-0129-01.
The discrete change figures indicate distinct directional shifts across the federation:
- Destination de-concentration was widespread: 11 of 14 jurisdictions recorded lower destination market concentration in 2025 than in 2000. The largest reductions occurred in Newfoundland and Labrador (-0.34, from 0.53 to 0.19) and Ontario (-0.33, from 0.87 to 0.54), followed by Quebec (-0.23, 0.75 to 0.52) and Manitoba (-0.21, 0.67 to 0.46).
- Three jurisdictions increased destination concentration: Nunavut (+0.18, 0.18 to 0.36), New Brunswick (+0.07, 0.75 to 0.82), and Northwest Territories (+0.03, 0.58 to 0.61).
- Product concentration shifts diverged: Yukon recorded the largest product concentration increase (+0.40, from 0.45 to 0.85), followed by New Brunswick (+0.23, 0.18 to 0.41) and Alberta (+0.18, 0.41 to 0.59). In contrast, Nunavut recorded a substantial product de-concentration (-0.49, from 1.00 to 0.51) as multiple mining extraction operations opened, and Ontario diversified further from 0.22 to 0.12 (-0.10).
Normalized Herfindahl-Hirschman product concentration index across 261 SITC Rev. 3 commodity groups (2025). Canada reports an index of 0.168, ranking highest among G7 economies but lower than natural resource exporters Norway (0.380) and Australia (0.287).
According to UNCTADstat records for 2025, Canada records active exports in 255 of the 261 standard SITC Rev. 3 product groups (97.7% breadth), matching or exceeding peer economies (France 258, Germany 257, US 258, Japan 247). Canada's elevated product concentration index relative to G7 peers (0.168 vs US 0.106, Germany 0.093, Italy 0.071) is not caused by an absence of product categories, but by the valuation weight of energy commodities (crude petroleum and bitumen) and automotive products in total export value.
The empirical record across Statistics Canada Table 12-10-0129-01 and UNCTADstat indicates three consistent patterns:
- Destination concentration is sub-nationally polarized: New Brunswick (0.82) and Alberta (0.74) exhibit high buyer concentration driven by regional energy distribution, while Newfoundland and Labrador (0.19), Saskatchewan (0.30), and British Columbia (0.31) maintain diversified export destinations.
- The US presence defines Canadian destination concentration: For 8 out of 10 provinces, removing the United States reduces destination concentration to 0.05–0.10, demonstrating that non-US trade flows are dispersed across global markets.
- Historical concentration peaked in 2000: National export destination concentration reached its highest recorded level (0.75) during the 1999–2000 North American manufacturing expansion. Over the subsequent 25 years, Ontario experienced a marked reduction in destination concentration (0.87 to 0.54), whereas Alberta remained anchored around 0.74–0.78.