Transportation is much more than just a way to get around; it’s a driving force behind Canada’s thriving economy! This sector does a lot of heavy lifting, supporting big industries like manufacturing, tourism, and facilitating the movement of natural resources, agricultural products, and manufactured and finished goods to reach domestic and international markets.
Canada’s impressive network of 15 free trade agreements with 51 countries continues to underscore its proactive role in the global economy. This network, covering two-thirds of the global economy, highlights Canada’s very unique position as the only G7 nation with free trade agreements with all other G7 members. These agreements are the reason that Canadian businesses are connected to over 1.5 billion consumers worldwide!
Latest Data on the Transportation and Shipping Industry in Canada
The transportation and shipping industry in Canada has been on a remarkable journey of recovery and growth, especially since the COVID-19 pandemic. Let’s dive into some numbers:
- Bouncing Back Stronger: After a challenging period, 2021 was a year of significant rebound. The value of interprovincial merchandise trade shot up to a whopping $195 billion. This was a substantial 20.2% increase from 2020, marking a strong recovery from the pandemic’s impact.
- A Leap in International Trade: Moving forward to 2022, the figures are even more impressive. International merchandise trade reached around $1.52 trillion, showing a robust 21.7% increase from 2021.
- The U.S. – Canada’s Trading Powerhouse: The United States continues to be Canada’s top trading partner. The total trade with the U.S. amounted to $963 billion, divided into $600 billion in exports and $363 billion in imports. This marks a significant 24.1% increase from 2021, representing 63.4% of all Canadian trade in 2022.
- Diversifying Trade Partnerships: Beyond the U.S., Canada’s trade network is quite diverse. The top four trading partners, excluding the U.S., are China, Mexico, Japan, and Germany. Together, these countries accounted for 16.0% of Canada’s total international trade in 2022, highlighting Canada’s global reach in trade.
An Overview of Canada’s Transportation Network
Canada’s marine network, vital for both domestic and international trade, includes ports that serve as entry points for imported goods and export hubs for Canadian bulk commodities. Managed by Transport Canada, the network comprises 17 independently managed Canada Port Authorities and 34 Transport Canada-operated port facilities. Canadian registered vessels, responsible for about 99% of domestic tonnage, predominantly transport bulk cargo and play a very important role in U.S. trade and supplying northern communities.
Canada’s air network spans six time zones, covering 18 million square kilometres. Managed by NAV CANADA, a not-for-profit corporation, it includes air traffic control at 42 airports and flight service stations at 55 airports. As of 2022, the network boasts 2,012 certified and registered aviation sites, including 343 water aerodromes, 427 heliports, and 1,254 land aerodromes, along with 12 military landing sites.
Canada’s rail network is integral to its economy, primarily used for freight transport to the U.S. and through coastal ports to international markets. The freight rail sector, focusing on bulk commodities and container traffic over long distances, is dominated by two major Class I freight railways: CN (Canadian National) and CP (Canadian Pacific). Large U.S.-based carriers like Burlington Northern Santa Fe Railway Company and CSX Transportation Inc. also operate in Canada.
Canada’s road network accounts for nearly 40% of overall merchandise trade. It spans from the Pacific to the Atlantic coasts, with a dense network across its southern, more populated regions. The Trans-Canada Highway is a key component of this network. The trucking industry, vital for logistics, included 136,664 businesses as of December 2022, with a mix of small, medium, and large companies, most of which are concentrated in Ontario, Quebec, Alberta, and British Columbia.
The Future of the Transportation and Shipping Industries in Canada
- Improving Efficiency of Supply Chains: To tackle global congestion and inflation, Transport Canada is investing $603.2 million over five years to strengthen supply chains. Bill C-33 is set to update the marine and railway systems, making them more robust. Looking ahead, the focus is on boosting production and transport logistics, using digital tech for better data and insights, and making regulatory changes.
- Reducing Pollution in Transportation: Transport Canada is focusing on reducing 25% of Canada’s greenhouse gas emissions from the transportation sector. Efforts include the iZEV and iMHZEV programs to cut emissions and adapt to climate change impacts like extreme weather, which threaten transportation safety and efficiency. The department is also working on decarbonizing air, rail, and marine sectors through regulations, incentives, and research. Additionally, protecting Canada’s oceans and marine life from vessel disturbances is a priority.
- Harnessing Innovation in Transportation: Canada is focusing on using emerging technologies like AI and automation to enhance supply chain efficiency, mobility, and safety. Key technologies include remotely piloted aircraft systems (RPAS) and connected and automated vehicles (CAVs), offering economic and safety benefits.
- Transportation Safety and Security: Canada maintains a highly safe and secure transportation system. Challenges include complex and evolving safety and environmental risks, especially with increased freight and passenger volumes. Transport Canada (TC) is focused on modernizing regulations and enhancing oversight to sustain this safety record. This includes addressing emerging risks in rail safety due to climate change and increasing marine traffic.
Opportunities for Startups in the Transportation and Shipping Industry in Canada
Based on the emerging trends in the Canadian shipping and transport industry, several opportunities are on the rise for startups to make the most of:
- Supply Chain Optimization Solutions: Developing software that uses AI and machine learning to streamline supply chains, predict disruptions, and optimize logistics.
- Green Transportation Technologies: Creating solutions for reducing greenhouse gas emissions in transportation, such as electric vehicle (EV) technology, alternative fuels, and energy-efficient engines for air, rail, and marine sectors.
- Climate Adaptation Technologies: Innovations that help transportation infrastructure adapt to climate change impacts, like extreme weather-resistant materials or designs.
- Data Analytics for Supply Chain Efficiency: Startups that offer advanced data analytics services to provide real-time insights into supply chain operations, enhancing decision-making and efficiency.
- Automation in Logistics: Developing automated solutions for warehouses and delivery systems, including drones and autonomous vehicles, to improve transportation logistics.
- Marine Conservation Technologies: Technologies focused on protecting marine life from shipping disturbances, like AI-based monitoring systems for marine ecosystems or eco-friendly shipping equipment.
- Safety and Security Solutions: Innovations in safety and security technologies for the transportation sector, such as advanced surveillance systems, cybersecurity solutions for transportation networks, and safety equipment for extreme weather conditions.
- Emission Monitoring and Reduction Tools: Tools and software that help companies monitor and reduce their carbon footprint in transportation, aligning with Canada’s greenhouse gas reduction goals.
- Smart Infrastructure Development: Startups that focus on building or upgrading transportation infrastructure with smart technologies, improving efficiency and safety.
- Regulatory Compliance Software: Software solutions that help transportation companies stay compliant with evolving regulations, particularly in safety and environmental standards.
Innovative Transportation and Shipping Startups in Canada
- Mely.ai: Utilizing AI for automated supply chain document processing
- Hop In Technologies: Enhancing transportation logistics for smart cities
- Tyltgo: Offering flexible courier and logistics solutions for businesses
- Go Oil: Disrupting traditional oil change services with mobile solutions.
- Zygg: Making electric bikes widely accessible with a subscription model
- NuPort Robotics: Leading in autonomous driving tech for logistics.
- Truxweb: Optimizing transportation operations with innovative software.
- Fly and Fetch: Pioneering peer-to-peer shipping marketplace
Developments in Brampton’s Transportation and Shipping Industry
Pet Valu, Canada’s premier retailer of pet food and supplies, has recently inaugurated Canada’s largest pet specialty distribution center in Brampton, Ontario. This 670,000-square-foot facility marks a significant step in Pet Valu’s $110-million supply chain transformation.
It is designed to offer unparalleled scale and automation, enhancing distribution services for the company’s corporate and franchised stores across Central and Eastern Canada, including the recently acquired Chico chain in Quebec.
As part of a broader strategy, Pet Valu plans to invest $110 million over four years to modernize its distribution networks in the Greater Toronto Area, Vancouver, and Calgary.
Want to Start a Transport or Shipping Related Business in Canada?
We are BHive, a startup incubator located in Brampton, Ontario. We offer international startups the tools, resources, and space to establish – and quickly scale – their businesses in Canada and North America. To apply to our Global Entrepreneur Incubation Program, click here!