New research from Deloitte’s Future of Canada Centre shows that export diversification — long treated as a strategy challenge — has become a supply‑chain and procurement execution problem.
Drawing on interviews with 32 Canadian exporters and a survey of 256 firms, the report finds that preparedness and capability — not market access — increasingly determine which organizations can compete in today’s trade environment.
The findings highlight several implications for supply‑chain and procurement leaders:
- Compliance capability is no longer optional; audit‑ready data, traceability, and origin verification now directly determine access to key markets.
- Firms with embedded optionality (pre‑qualified suppliers, alternative inputs, flexible finishing locations) can move faster and at lower cost.
- Execution capacity inside Canada — including facilities, labour, certification, and regulatory speed — shapes whether diversification plans can be realized in practice.
- Procurement, trade, and supply‑chain functions are increasingly interdependent, requiring coordinated investment and governance.
In a Question & Answer with Retail Insider, Lisa Zajko, Global Trade Advisory Leader at Deloitte Canada and Jim Kilpatrick, Global Supply Chain & Network Operations Leader at Deloitte Canada, provided some insights on the issue.
Question: How has export diversification shifted from a strategic priority to an execution challenge for Canadian companies?
Answer: Export diversification has long been a strategic priority for governments, reflected in trade agreements and market access efforts. For many Canadian companies, however, it has not historically been a business imperative. The U.S. market has been relatively accessible, familiar, and profitable, reducing the pressure to invest in alternative global markets.
That calculus is now changing. Rising geopolitical uncertainty, shifting trade rules, regulatory divergence, and supply chain disruptions have increased both the cost of concentration and the cost of inaction. As a result, Canadian companies are increasingly treating diversification as an urgent priority rather than a long-term aspiration.
The challenge is execution. Success requires adapting products for new markets, building unfamiliar customer and partner relationships, building new supply chain and order fulfillment capabilities, and navigating tax, regulatory, and business model considerations across different jurisdictions.
Deloitte’s recent research report shows that diversification success depends less on intent and more on a company’s ability to operationalize change – making execution capacity, not strategy alone, the primary differentiator.
Q: What critical compliance capabilities are needed for global market access, such as traceability and origin verification?
A: Compliance has become a prerequisite for market access, not a backoffice exercise. Canadian exporters increasingly need robust traceability, origin verification, and documentation capabilities to meet stricter, or different, international requirements, and to take advantage of preferential tariff treatment under trade agreements.
With more active enforcement, firms must be auditready, supported by credible supply chain data that substantiates product origin and value. Firms that lack these capabilities face delays, added costs, or barriers to entry. Those that invest early in compliance and traceability are better positioned to maintain access and improve competitiveness across global markets.
Q: How are leading organizations building optionality into supply chains, and what practical advantages does this provide?
A: Leading organizations are designing optionality directly into their supply chains by qualifying alternate suppliers, adopting more modular production models, and maintaining flexible logistics routes.
This approach allows companies to respond more quickly to external shocks—whether tariffs, regulatory changes, or disruptions—often adjusting in weeks rather than months. The practical advantage is resilience and speed. Firms can protect margins, preserve market access, and capitalize on opportunities when less flexible competitors are constrained.
Q: To what extent do domestic constraints like labour, facilities, certification, and regulatory timelines limit export diversification?
A: Domestic execution constraints are a significant, and often underestimated, barrier to export diversification. Skills shortages, facility capacity, certification bottlenecks, and lengthy regulatory timelines can slow or prevent firms from scaling into new international markets.
Deloitte’s latest report, Continental divides: North American and global exporters in a new trade era, highlights that execution capacity at home often determines whether international demand can be converted into growth. When workforce availability, infrastructure readiness, or approval processes lag, companies are more likely to delay expansion, miss market opportunity windows, or redirect investments to jurisdictions with more predictable operating conditions.
Q: What recommendations can you offer for evolving procurement, trade, and supply-chain functions to operate more cohesively in a complex, conditional trade system?
Canadian companies should bring procurement, trade, and supply chain functions closer together to operate as an integrated system rather than in silos. That means aligning compliance, risk management, and data capabilities across functions.
Investments in end-to-end visibility, scenario planning, and cross-functional governance can enable faster, more informed decision making in a complex and conditional trade environment.
Firms that prioritize compliance capabilities, supplier diversification, and digital enablement will be better positioned to adapt, maintain access, and compete globally.
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