Canada has spent the last decade wooing partners from Europe to the Indo-Pacific, yet three-quarters of merchandise exports still crossed the United States border last year. A trade plan that leans so heavily on one customer looks risky when Washington keeps weaponizing tariffs overnight.
Diversifying demand is smart, but the effort will stall if firms at home continue to grow behind protective walls. Dominant banks and telecom operators show why lifting export concentration and raising domestic competition belong in the same policy playbook.
Banking clout limits small firms
The Big Six control 97 percent of banking assets, according to an August 2025 market snapshot, with Royal Bank of Canada and Toronto-Dominion alone holding nearly half of the system’s C$8.8 trillion balance sheet.
Such heft gives incumbents unusual sway over lending terms and digital standards, leaving smaller lenders and fintechs scrambling for space. Critics argue that the absence of open banking rules, promised since 2018, keeps fees high and customer data locked inside legacy platforms.
Competition Commissioner Matthew Boswell has warned that the current legal toolkit falls short, stating, “Our laws are not adequate,” during a interview that explored the so-called efficiencies defence, a clause that once let mergers proceed even when they hurt consumers.
The defence was finally repealed last December, yet enforcement resources remain thin. Without faster licensing for new entrants or a timetable for open banking, exporters will keep relying on a handful of institutions whose global reach is already stretched.
Concentrated finance also blunts innovation. Canadian payment rails still settle at batch speed while peers in Australia and the United Kingdom clear in seconds. Firms that sell abroad need modern cash management tools and multi-currency services.
When those services come only from five suppliers, costs climb and margins shrink, making it tougher to chase customers beyond the United States, which took 75.9 percent of domestic exports last year.
Wireless choices lag global peers
Bank dominance has a twin in telecommunications. The latest CRTC monitoring report shows Rogers, BCE and Telus capture almost 90 percent of retail wireless revenue and 86.9 percent of subscribers. Canadian smartphone bills remain among the highest in the OECD and download speeds trail markets with four or more carriers. High prices dent household spending and curb the digital adoption that small exporters need to reach distant buyers.
Ottawa’s 2023 amendments to the Competition Act expanded market-study powers and erased the efficiencies loophole. Deputy Prime Minister Chrystia Freeland argued in the Senate that “More competition means lower prices and more choice,” when she urged passage of Bill C-56.
The sentiment is noted, but results will matter more. With little implementation of this “competition” lacking so far, several actions can be taken: spectrum auctions that favour newcomers, wholesale rates that let regional players scale, and merger reviews that weigh consumer welfare over corporate size.
Stronger domestic rivalry also prepares firms to compete abroad. Carriers that slug it out at home upgrade networks faster, chase roaming deals sooner and export managed services. Banks that face nimble fintech challengers adopt real-time data analytics, skills that translate to overseas growth.
Canada’s export map needs more dots. So do its boardrooms. Diversifying trade without fixing concentrated markets is like buying new fishing gear but refusing to mend the boat. Policymakers should link every export mission with a domestic competition check, ensuring that the next bilateral deal is backed by industries sharpened, not sheltered, by the marketplace.
