Canada and Italy share a strong and evolving trade relationship, built on historical ties, cultural exchanges, and economic complementarities. Italy is Canada’s second-largest trading partner in the European Union, with bilateral trade reaching US$15.8 billion in 2023. The two nations collaborate across multiple sectors, including automotive, aerospace, pharmaceuticals, food and beverage, and clean technology.
With Italy’s advanced manufacturing base and Canada’s rich natural resources, the trade partnership continues to grow, despite occasional regulatory and tariff challenges. This report explores the full scope of Canada–Italy trade relations, including tariff dynamics, trade volumes, institutional frameworks, sectoral trends, five-year industry performance, and a historical overview of their economic engagement.
Tariff and Non-Tariff Challenges
Italy and Canada benefit from the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), which came into provisional effect in 2017. CETA eliminated 98% of tariffs on goods traded between Canada and the EU, significantly improving market access.
However, some non-tariff barriers remain:
- Agricultural products: While CETA reduced tariffs on many food items, Canadian beef and pork exports still face quota restrictions in Italy.
- Wine and spirits: Italy’s strict labeling and certification requirements create hurdles for Canadian wine exporters.
- Pharmaceuticals: Italian pharmaceutical exports to Canada must comply with Health Canada’s rigorous approval process, which can delay market entry.
- Automotive parts: While tariffs are low, technical standards and safety regulations differ between Canada and Italy, requiring additional compliance measures.
Despite these challenges, CETA has facilitated smoother trade flows, particularly in machinery, aerospace, and industrial goods.
Trade Performance and Investment Channels
In 2024, Canada exported approximately US$2.25 billion in goods to Italy, while importing US$8.65 billion, resulting in a trade deficit of US$6.4 billion.
Canada’s Top Exports to Italy (2024)
- Wheat – US$534 million
- Aircraft and aerospace components – US$203 million
- Packaged medicaments – US$237 million
- Dried legumes – US$167 million
- Mineral fuels and oils – US$98 million
Italy’s Top Exports to Canada (2024)
- Cars and automotive parts – US$539 million
- Wine and spirits – US$446 million
- Packaged medicaments – US$352 million
- Machinery and industrial equipment – US$402 million
- Furniture and lighting – US$242 million
On the investment side, Italian companies such as Ferrero, Leonardo, Fincantieri, and Mapei have expanded their presence in Canada, while Canadian firms like Bombardier and Magna International have strengthened their operations in Italy.
Diplomatic Milestones and Tensions
- 1950s–1970s: Canada and Italy established strong diplomatic and trade ties, with Italian immigrants playing a key role in Canada’s post-war economic expansion.
- 1990s: Italy’s entry into the European Union deepened trade relations with Canada, leading to increased investment and business partnerships.
- 2017: CETA came into effect, eliminating most tariffs and improving regulatory cooperation.
- 2023: Canada and Italy signed a strategic cooperation roadmap, focusing on energy security, climate change, and artificial intelligence.
- 2025: Italy assumed the G7 Presidency, followed by Canada in 2026, strengthening their global economic collaboration.
Sector Deep Dives
Agriculture and Food Security
Canada is a major supplier of wheat and dried legumes to Italy, with exports reaching US$534 million in 2024. Italy’s strict food quality standards require Canadian exporters to meet rigorous certification processes.
Energy and Sustainability
Italy is transitioning to renewable energy, creating opportunities for Canadian firms specializing in hydro, wind, and carbon capture technologies. Canadian companies have invested over US$1.5 billion in Italian clean energy projects.
Automotive and Aerospace
Italy’s automotive sector, led by brands like Ferrari, Fiat, and Lamborghini, imports Canadian aluminum and advanced materials for vehicle production. Canada’s aerospace industry, including Bombardier, exports aircraft components to Italy.
Pharmaceuticals and Life Sciences
Italy is a leading exporter of pharmaceuticals to Canada, with US$352 million in packaged medicaments shipped in 2024. Canadian biotech firms are collaborating with Italian research institutions on drug development and medical technology.
Education and Talent Mobility
Over 15,000 Italian students study in Canada annually, benefiting from exchange programs and research partnerships between universities like McGill, UBC, and the University of Bologna.
Diaspora and Soft Power Influence
Canada’s Italo-Canadian community, numbering over 1.6 million people, plays a vital role in trade and cultural diplomacy. Italian businesses in Canada contribute significantly to sectors like construction, hospitality, and fashion.
Organizations such as the Italian Chamber of Commerce in Canada and the Canada-Italy Business Council facilitate trade missions, investment forums, and business networking events.
Recommendations and Roadmap
- Expand CETA Implementation: Focus on agriculture, pharmaceuticals, and digital trade to maximize benefits.
- Strengthen SME Collaboration: Encourage joint ventures between Canadian and Italian startups in fintech, AI, and clean tech.
- Enhance Regulatory Harmonization: Align food safety, automotive standards, and pharmaceutical approvals to reduce trade friction.
- Promote Green Energy Partnerships: Increase Canadian investment in Italy’s renewable energy sector.
- Boost Bilateral Trade to US$20 Billion by 2030: Set industry-specific growth targets.
Five-Year Industry Trade Trends (2019–2024)
Agriculture and Agri-Food
Canada’s wheat and legume exports to Italy grew from US$1.12 billion in 2019 to US$1.38 billion in 2024, with a dip in 2021 due to tariff barriers and a rebound in 2023–2024.
Automotive and Aerospace
Italy’s exports of cars and aerospace components to Canada increased from US$410 million in 2019 to US$539 million in 2024, driven by demand for luxury vehicles and aircraft parts.
Pharmaceuticals and Medical Equipment
Italy’s pharmaceutical exports to Canada jumped from US$312 million in 2019 to US$434 million in 2024, reflecting strong demand for generic medicines and vaccines.
Wine and Spirits
Italy’s wine exports to Canada grew from US$320 million in 2019 to US$446 million in 2024, making Canada one of Italy’s top wine importers outside the EU.
Historical Overview of Canada–Italy Trade Relations
Trade between Canada and Italy dates back to the 19th century, when Italian immigrants helped build Canada’s infrastructure and agricultural economy. By the 1950s, Italy became a key supplier of machinery, textiles, and food products to Canada.
The 1990s saw a surge in trade following Italy’s deeper integration into the EU. The 2017 implementation of CETA marked a turning point, eliminating most tariffs and expanding investment opportunities.
Today, Canada and Italy continue to strengthen their trade partnership, leveraging CETA, diplomatic cooperation, and diaspora-driven business networks to drive economic growth.