How Canada lost its leadership role in Latin America, and how to get it back.

BY JOHN PRICE

For a generation, Canada punched above its weight in Latin America. It brokered trade deals, convened presidents, financed infrastructure, and branded itself as a pragmatic, rules-based partner. Today, Canada is still present—but no longer central. Over the past decade, Ottawa’s retreat from the region has been subtle, bureaucratic, and largely unannounced. Its consequences, however, are now impossible to ignore.

A Decade Ago, Canada Looked Like a Hemispheric Power

In the late 2000s and early 2010s, Canada behaved like a country with a Latin American strategy. Ottawa signed free-trade agreements across the region, embedded itself in the Pacific Alliance conversation, and backed commercial diplomacy with frequent prime-ministerial and ministerial travel. Canadian banks expanded aggressively. Canadian mining firms became household names in Andean capitals. Development finance and governance programming gave Canada influence well beyond its economic size.

In Brasília, Bogotá, Lima, and Santiago, Canadian officials were treated as serious interlocutors—not just polite visitors from the north.

Fast-forward to the mid-2020s, and the contrast is stark. Canada is still there, but no longer setting the pace. Its trade agenda has stalled. Senior political engagement has thinned. Its commercial brand has narrowed almost entirely to mining. And where Canada once helped shape regional priorities, other actors now do so with far greater scale, consistency, and confidence.

This is not the story of a dramatic rupture. It is the story of a quiet retreat.

Trade Policy: When Momentum Died

Nothing signals strategic disengagement more clearly than the collapse of forward motion on trade. Canada’s last new free-trade agreement in Latin America—the Canada–Honduras Free Trade Agreement—entered into force in 2014. Since then, for more than a decade, Canada has added no new trade agreements in the region.

That matters because trade deals are not just tariff instruments. They create permanent diplomatic machinery: committees, dispute panels, business councils, annual reviews, and recurring political contact. When trade negotiations stop, so does much of the structured engagement that sustains influence.

Meanwhile, Canada’s actual trade footprint remains modest. In 2024, Canada exported US$18.6 billion* in goods to Latin America and the Caribbean. Mexico alone accounted for nearly 44% of Canadian exports to the region. Outside Mexico, Canada’s commercial presence thins quickly.

Compare that with China, whose trade with Latin America surpassed US$500 billion in 2024. Leadership is relative. In trade, Canada is no longer in the same league.

Mining: Canada’s Dominance Became a Diplomatic Constraint

Ironically, Canada’s greatest commercial strength in Latin America—mining—has become one of its biggest diplomatic liabilities.

Canadian companies dominate mining investment across the Andes, Central America, and parts of the Caribbean. But as extractive politics hardened, around environmental standards, Indigenous consultation, and revenue sharing, Canadian firms increasingly became lightning rods for domestic political conflict.

The closure of the Cobre Panamá mine, owned by Canada-based First Quantum Minerals, was a turning point. The ruling that voided the concession contract did not just halt a mine, it froze Panama’s entire mining sector and turned “Canadian investment” into a politically toxic phrase.

This is not unique to Panama. Across the region, Canada’s brand has narrowed: from “trusted partner” to “foreign miner.” That is not leadership – it is exposure.

Diplomacy without Gravity

A decade ago, Canadian prime ministers treated Latin America as a regular diplomatic circuit. Multi-country tours were common. Canada positioned itself as a bridge between Washington and South America, and as a reliable partner distinct from U.S. domestic politics.

Today, Latin America rarely features as a standalone priority. Ottawa’s strategic bandwidth has been consumed elsewhere: Europe after Russia’s invasion of Ukraine; Arctic security; and, most visibly, the Indo-Pacific. Canada’s Indo-Pacific Strategy is comprehensive, well-resourced, and politically championed. Latin America has no equivalent framework.

Canada’s Latin American Decline in Numbers

1. Canada signed 9 Latin American FTAs between 1997–2014, and zero since.
2. Canada’s exports to Brazil in 2024 were less than one-third of what they were a decade earlier (real USD).
3. Canada’s Export Development Canada has fewer active LAC mandates than in 2012.
4. Canadian bank branch expansion in Latin America peaked before 2015.
5. Canada has not hosted a major hemisphere-wide LAC summit since the early 2010s.
6. China–CELAC ministerials occur on a predictable cycle; Canada–LAC equivalents do not.
7. Canada’s embassy staffing levels in several LAC capitals declined in real terms after 2016.
8. Canada’s trade commissioner footprint in LAC has not grown in a decade.
9. Latin American media mentions of Canada skew heavily toward mining disputes.
10. Canada’s brand recognition among Latin American business elites has declined since 2015 (survey-based anecdotal evidence).

How Can Canada Re-Engage with Latin America?

The Carney government has inherited both a bloated budget and a complicated trade relationship with the United States. Global Affairs, responsible for Canadian trade policy faces dramatic budget cuts, while simultaneously asked to diversify Canadian trade – i.e. find new customers outside of the US market.

Focused on selling more ‘stuff’ (mostly commodities), Carney is busy visiting China, the mid-east and India, obvious new markets for Canadian oil, LNG, potash, wheat, rye, forestry and fish products. So why bother with Latin America?

Three reasons, to begin with:

1. Critical minerals and metals – the world wants an alternative to Chinese suppliers. Canada has the world’s largest and most advanced mining industry. Latin America has the largest sources of copper and lithium on the planet. Canadian mining companies, teamed with Canadian financiers can invest in Latin American mining assets, beating out Chinese, American and European competitors by offering to simultaneously invest in smelting and metals processing, giving Latin American mining nations the dream of vertical integration. In return, Canadian mining companies corner the market on critical metals and earn a seat at the ever-shrinking geo-political table.
2. The Canadian exports that earn the highest wages stem from the highly specialized service providers, equipment manufacturers and technology innovators who service Canada’s resource sectors: mining, oil and gas, forestry, agriculture, fisheries. Overseas customers are found in markets that boast large scale industries in these sectors. Many of those are found in Latin America, home to 40% of global mining investment, 30% of the world’s arable land, 15% of global fishing and 10% of the world’s oil production.
3. Canada built its export economy on B2B inputs, i.e. selling to American corporations who then turned Canadian inputs into finished goods and services. Korea and Japan have shown that long-lasting, market share cementing exporting must include the conglomerate approach – where large corporates go abroad to win big contracts (infrastructure, defense) or invest in large projects (mining, energy, manufacturing) and bring their long tail of SME suppliers with them. This is the ‘industrial policy’ strategy that Canada needs to adopt in order to diversify its exports away from the US market.

John Price is the Managing Director of Americas Market Intelligence. With 32 years of experience in Latin American market intelligence consulting, Price has supervised nearly 1,200 client engagements and advises clients in more than 20 countries across Latin America. He can be reached at jprice@americasmi.com 

This article was originally published in a new whitepaper published by the Canadian Council of the Americas, called Beyond the Build.

Republished with permission from Americas Market Intelligence. 

 

 

 

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