For a decade now, the United States has remained the main target for Lithuanian business in North America. This is natural: it is the world’s largest economy, with the highest availability of capital and scale of innovation. However, now, with global trade tensions on the rise, we should not overlook another large and stable North American economy – Canada.
Canada is the ninth largest economy in the world, with a nominal gross domestic product of USD 2.23 trillion. The country ranks fourth in the world in terms of economic stability and is one of the leaders in attracting foreign direct investment. The Canadian federal government’s income tax rate is one of the lowest among the G7 countries, and its innovation and research policy is geared towards long-term economic growth. Canada also stands out for its consistent investment in research: it ranks second among the G7 countries in terms of R&D investment in higher education as a percentage of GDP. This means that the country not only imports products but also actively seeks partners for technological cooperation.
Geopolitical tensions and trade conflicts between major economies have prompted Canada to review its economic strategy. Until now, the country has been heavily dependent on trade with the US, with as much as 76.4% of its exports currently going to this neighboring market. However, this dependence has become risky, so Canada is actively seeking to diversify its trade partnerships. The European Union is identified as a priority economic partner, and Lithuania is seen as a dynamic and innovative partner in this context.
Lithuania has one of the most diversified export structures in Europe – no single market has a dominant influence. This sets us apart from other countries and increases our credibility in the eyes of international partners. In 2024, Canada was the 30th largest export market for goods of Lithuanian origin, accounting for 0.5% of total exports of Lithuanian origin. Although the figure seems small, the trend is growing. Lithuania exports furniture, fish products, fertilizers, electrical equipment, optical and medical devices to Canada. These product groups clearly show that Lithuanian companies are already exporting high value-added products to Canada, which is a solid basis for further development.
We are still in the early stages of service exports: in 2024, Canada was the 37th largest market for Lithuanian service exports, but growth is particularly strong in the IT, financial, and travel services categories. The growing export of high technology to Canada is one of the greatest untapped opportunities.
A very important aspect for Lithuanian business is the Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada. Although it is currently only provisionally applicable, it already offers specific advantages: more than 98% of customs duties on goods have been eliminated, licensing and certification procedures have been simplified, and more flexible conditions have been created for companies wishing to provide services or work on a project basis in the Canadian market. Thanks to CETA, Lithuanian products are becoming more competitive in Canada in terms of price and quality compared to competitors from other regions.
The greatest potential for Lithuanian business in Canada lies in the field of high technology: information technology, artificial intelligence, fintech solutions, and life sciences. These areas are considered economic priorities in Canada, attracting government support and investment. The defense sector is also growing rapidly—Canada is a member of NATO and is increasing its investment in security solutions, including unmanned technologies, encryption systems, and cyber security. These are areas in which Lithuania has an international competitive advantage.
Canada also has a particularly favorable innovation policy. The government actively supports joint scientific and technological projects and finances the commercialization of research. Companies engaged in R&D activities in Canada are eligible for significant tax breaks. This means that Lithuanian technology companies entering Canada could not only export, but also develop joint product development projects or establish innovation centers.
Another important sign that economic ties between Lithuania and Canada are strengthening is the launch of the Canada Lithuania Chamber of Commerce (CLCC) in Toronto in October 2025. This is the first official platform that systematically connects businesses, investors, and institutions from both countries. The CLCC’s goal is to help Lithuanian companies discover the Canadian market, provide legal and partnership search assistance, and encourage mutual investment. This is a clear sign that both countries see greater potential for cooperation and are already developing the necessary infrastructure.
Canada is a large but accessible and promising market for Lithuanian exporters. Businesses considering entering this market should evaluate several practical aspects. First, the Canadian market values quality and reliability, so the entry strategy should be based on clear value and a tailored offer, rather than price competition. It is also important to take advantage of European and Canadian agreements and existing entry measures – CETA and CLCC can become a competitive advantage. Second, it is useful to start with pilot projects or segmented solutions in cooperation with local partners. Thirdly, it is worth planning market entry through international innovation programs that fund technological cooperation between European and Canadian companies. Finally, this market requires patience and consistency, but success opens up long-term and stable partnerships.
Canada is not just an alternative to the US – it is an independent market with high-value opportunities that is open to cooperation and looking for reliable partners. Lithuania has all the necessary arguments to be among them. Therefore, now is the right time to take the first step – the Canadian market is waiting for those who think strategically.
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