By Daniel-Robert Gooch

February 18, 2025

While the leveraging of tariffs and trade by U.S. President Donald Trump as a means of geopolitical coercion is still playing out across targeted economies, the truth that Canada’s trade is dangerously dependent on the whims of a single country is now more salient than ever. Our future is tied to whether we can diversify our trade.

Canada’s ability to remain competitive and achieve trade diversification depends on reliable port infrastructure. Our ports are the backbone of Canadian commerce and, unfortunately, that infrastructure is falling behind just when it has become economically existential. To help deal with this problem, the Association of Canadian Port Authorities (ACPA), has released a new study that uses data to inform urgent actions the government can take to improve Canada’s international competitiveness and bolster economic security.

Ports are critical to that competitiveness and economic security. We play a vital role in Canada’s economy and global trade network, with marine shipping handling 18% of exports — valued at $139 billion — and 2% of imports, worth $181 billion. As 80% of global goods move by sea, ensuring that Canada’s ports are modern, efficient, and competitive is critical.

Our new study reveals that Canadian trade faces two main headwinds, both of which pre-existed our current crisis and require immediate remedy:  underfunded infrastructure and regulatory burdens. If left unaddressed, these drags on our competitiveness will severely constrain Canada’s ability to diversify its trade.

Canadian ports need to invest between $15 billion and $21.5 billion in upgrades and expansions by 2040 to break bottlenecks to trade growth, improve efficiency, and modernize aging facilities. However, 61% of currently planned projects remain unfunded, posing a serious challenge to Canada’s strategic plan to expand and diversify our trade internationally.

Our ports are trying to meet this challenge, but gaps remain. For example, Canada port authorities (CPAs) have at least $10 billion in planned investments over the next 15 years, with $5 billion needed in the next four years alone, but only 39% of these projects have secured funding. Of the unfunded initiatives, 34% are classified as “critical,” meaning they directly impact trade capacity and supply chain reliability. As the world learned during and after the COVID pandemic and lockdown, supply chain integrity is indispensable to healthy trade, and supply chains rely on efficient port service.

These investments by Canada port authorities will generate growth for the entire economy, so why are they underfunded? There are two things the federal government can do to improve the situation: address CPA borrowing limits and establish a trade infrastructure program.

By making strategic investments and policy reforms now, Canada can secure its future as a global trade leader. The challenges identified in our study are serious but solvable.

CPAs operate at arm’s length from the federal government and as such are constrained by outdated borrowing limits that are imposed by the federal government. This prevents them from fully funding essential projects.

Ports need the freedom to make critical investment decisions to increase capacity and the ability to finance revenue-generating projects. Increasing borrowing limits and the process by which they are reviewed will enable ports to more easily leverage private capital and reduce reliance on federal funding. Furthermore, CPAs should be granted the ability to form joint ventures with private investors and other port authorities, unlocking new sources of funding and fostering innovation in trade infrastructure.

The National Trade Corridors Fund (NTCF) has addressed some of this trade infrastructure deficit by contributing approximately $1 billion to CPA projects, yet the program has received no new funding, and competition with other program applicants for federal dollars makes long-term infrastructure planning for ports difficult.

The establishment of a federal trade infrastructure program would provide reliable support for critical projects that private investment alone cannot address. However, if CPAs are granted greater agility to secure private investment and form strategic partnerships, it will decrease the total amount of federal government investment required to meet future demands.

However, Canadian ports are not only receiving 60% less funding per unit of traffic than their U.S. counterparts, we also face a more complex regulatory approval process, making it harder to attract business and investment.

Lengthy regulatory approval processes are delaying construction and increasing costs, limiting the effectiveness of capital investments. Streamlining approvals while maintaining strong environmental protections will enable ports to move more swiftly on essential projects.

By making strategic investments and policy reforms now, Canada can secure its future as a global trade leader. The challenges identified in our study are serious but solvable. With trade diversification, economic growth, and national security at stake, ensuring that Canada’s ports remain competitive, agile, and resilient must be a top priority.

With decisive action to modernize borrowing rules, stabilize infrastructure funding, and reduce regulatory delays to make our ports network fit for its 21st-century purpose, Canada will be in a much stronger position to adapt to new challenges and absorb any unforeseen shocks. Our national backbone depends on it.

Daniel-Robert Gooch is President and CEO, Association of Canadian Port Authorities