What dependency issues? : Re-examining assumptions about Canada's reliance on the U.S. export market

Figure 1 shows the ratio of trade to output in Canada from 1870 to 2010 and presents a linear trend of the data over this period.6 With the exception of the periods surrounding the First and Second World Wars, when trade was exceptionally high, trade was normally between 15 and 25 per cent of GDP. [...] As mentioned, Canada is close to the regression line and is not at all an outlier in terms of the ratio of average trade to GDP, given the size of the country. [...] In 1947, 39 per cent of exports went to the U. S., and 27.5 per cent to the U. K. In 1950, the U. K. share had fallen to 15 per cent, and the share of exports to the U. S. increased to 65 per cent.9 It is important and interesting to understand that even in the late 1950s the extent of Canadian dependence on trade with the U. S. was considered an exceptional and unprecedented economic relationship [...] Note that the real value of exports to destinations other than the U. S. grew until 1980, but by much less than Canadian exports to the U. S. It is the expansion in total exports to the U. S. that dominates the expansion of Canadian trade after 1960. [...] The increased reliance on the U. S. as an export destination after the Second World War reflects the expansion of the level of exports in response to rising U. S. demand, and Canadian exports expanded to the rest of the world as well, albeit at a slower pace.