CPKC CEO Says U.S. Trade Crisis Has ‘Woken Up’ Canada as Companies Look Beyond America

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Canada’s increasingly difficult trade relationship with the United States is forcing a rethink that once seemed unlikely. Canadian Pacific Kansas City CEO Keith Creel says the upheaval has “woken up” Canada, pushing governments and businesses to reconsider how heavily the economy depends on its enormous southern neighbour. His comments come as Ottawa promotes new investment incentives, expands export infrastructure and seeks deeper commercial relationships in Europe, Asia and Mexico.

The shift does not mean Canada can simply replace the United States. Geography, integrated supply chains and decades of cross-border investment make that unrealistic. What is changing is the willingness to build alternatives. For CPKC, the only major railway operating a single-line network across Canada, the United States and Mexico, that adjustment could become one of the defining commercial opportunities created by the trade crisis.

Creel Sees a Crisis Turning Into an Economic Wake-Up Call

Speaking at Morgan Stanley’s annual Laguna Conference on September 17, CPKC President and CEO Keith Creel described an economic transformation that he said he had not expected to witness during his leadership of the railway. Trade instability had created serious problems for customers, he acknowledged, but it had also forced Canada to confront vulnerabilities that were easier to ignore when access to the U.S. market appeared relatively predictable. Creel pointed specifically to tax reform, infrastructure investment and efforts to make the Canadian economy more competitive.

His language was unusually striking for a transportation executive. Creel said the crisis had “woken up” the country and argued that Canada was becoming stronger because of the response. That represents his assessment rather than an objective verdict on government policy, but the underlying shift is measurable. Canadian policymakers are putting considerably more emphasis on attracting capital, expanding ports and railways, and helping exporters reach non-U.S. customers. For a company whose business depends on where goods are produced and where they ultimately travel, those changes matter directly.

America Is Still Canada’s Biggest Customer — By a Huge Margin

Diversification can easily be mistaken for decoupling, but Creel himself rejected that idea. He said Canada will remain connected to the United States because it is the country’s largest single end market. Statistics Canada data demonstrate why that relationship is so difficult to replace. The United States still received 71.7% of Canadian merchandise exports in 2025, even after its share fell from 75.9% in 2024. No other individual market comes remotely close.

What has changed is activity outside the United States. Canadian merchandise exports to non-U.S. countries increased 17.2% in 2025. Statistics Canada also found that non-U.S. exports continued strengthening into 2026. In July, shipments to countries other than the United States rose 7.4% from June to a record $25.6 billion, accounting for 33.7% of all Canadian merchandise exports that month. Those figures can move sharply because commodities such as gold and oil have an outsized impact, so they should not be interpreted as evidence that dependence on the United States has disappeared. They do show, however, that more trade is finding other destinations.

CPKC Was Almost Designed for This Moment

CPKC occupies an unusual position in the diversification story because its network does not stop at the U.S. border. Created through the 2023 combination of Canadian Pacific and Kansas City Southern, the company operates roughly 20,000 route miles and describes itself as the first and only single-line transnational railway connecting Canada, the United States and Mexico. Its system also reaches major ports from Vancouver and Atlantic Canada to the Gulf Coast and Lázaro Cárdenas on Mexico’s Pacific coast.

That geography gives CPKC options when traditional freight patterns change. A Canadian producer looking for a Mexican buyer, an importer moving goods through a Pacific port, or a manufacturer reorganizing a North American supply chain can potentially remain on the same railway for much more of the journey. The company’s underlying business has also remained relatively strong despite the trade uncertainty. CPKC reported second-quarter 2026 revenue of C$4.16 billion, up 13% from a year earlier, while revenue ton-miles increased 4%. Grain, automotive and intermodal revenue were among the categories that increased year over year during the quarter.

Mexico Is Becoming Much More Important to the Railway

One of the clearest examples of the new trade geography is CPKC’s business connecting Canada and Mexico. Creel said revenue associated with the Canada-Mexico land bridge has grown from roughly C$100 million after the railway combination to more than C$600 million, with management seeing a longer-term path toward C$1 billion. CPKC is also expecting approximately C$1.5 billion in merger-related revenue synergies by the end of 2026, although those figures remain company projections rather than guaranteed outcomes.

Agriculture illustrates what that shift can mean on the ground. CPKC has repeatedly told Canadian grain customers that its merged network offers direct access to Mexican and southern U.S. markets in addition to traditional export routes through Vancouver and Thunder Bay. The railway transported a record 30.66 million metric tonnes of Canadian grain and grain products during the 2025–26 crop year, then moved another record 2.54 million tonnes in August 2026. Mexico cannot absorb everything Canada currently sells to the United States, but additional buyers give exporters something increasingly valuable: options.

Ottawa’s Investment Push Is Addressing a Long-Running Weakness

Creel also connected Canada’s response to the investment climate. His comments came during the same week that the federal government unveiled a proposed Productivity Mega Deduction. The measure would allow immediate expensing for a much broader range of depreciable business assets, meaning eligible companies could deduct the full cost of certain investments in the year those assets enter service rather than depreciating them over a longer period. The government estimates the measure would cost roughly C$36 billion over five years.

Ottawa has paired the tax proposal with a broader effort to attract capital. The federal government’s September investment summit set a goal of catalyzing C$1 trillion in total Canadian investment over five years. The Canada Revenue Agency also announced that it would prioritize advance tax ruling requests involving investments of C$1 billion or more, giving large investors earlier certainty about how proposed transactions will be treated for tax purposes. Creel argued that reforms of this kind could materially improve Canada’s investment competitiveness. Whether they generate investment on the scale Ottawa anticipates will depend on business decisions made over several years.

Diversification Requires Ports and Railways, Not Just New Trade Deals

Finding customers overseas accomplishes little if Canadian goods cannot reach ships quickly and competitively. That is why Creel emphasized infrastructure alongside tax policy. The federal government has made the Port of Vancouver a major piece of its diversification strategy. Ottawa says the port moves about C$1 billion worth of goods a day, connects Canada with roughly 170 countries and handles about one-third of Canadian trade in goods outside North America.

Rail capacity is central to that strategy because most cargo moving through the port relies on rail at some point in the journey. Ottawa and industry participants are developing plans to increase rail capacity and reduce congestion as part of the Port of Vancouver Gateway Strategy. The government has set an objective of doubling exports to non-U.S. markets by 2035. Similar work is occurring farther north. A new export-transloading facility at Prince Rupert, supported by nearly C$50 million through the National Trade Corridors Fund, was designed to handle at least 400,000 containers annually, with potential capacity of 750,000. Infrastructure therefore becomes the physical side of diversification.

Europe and Asia Are Becoming Bigger Parts of the Conversation

Canada’s search for alternatives extends considerably farther than Mexico. The European Union is already Canada’s second-largest trading partner in combined goods and services after the United States. Canada-EU trade in goods and services reached C$178.6 billion in 2025, according to Global Affairs Canada. CETA, which has been provisionally applied since 2017, gives Canadian companies a framework for expanding that relationship, while the two sides launched negotiations on a digital trade agreement in March 2026.

The Indo-Pacific is another major target. Canadian officials have intensified outreach across China, Japan, South Korea, India and Southeast Asia. Canada participated politically in the APEC Energy Ministers’ Meeting in 2026 for the first time in more than a decade, while trade officials have continued negotiations involving India, ASEAN and the Philippines. Energy infrastructure is also changing the practical options available to exporters. Ottawa says Canadian LNG shipments from the Pacific coast have increasingly gone to Asian customers, while expanded western oil-export capacity has provided a route that does not rely exclusively on U.S. buyers.

The Shift Is Real, but Replacing the U.S. Is Not the Goal

The most important part of Creel’s argument may be what he did not claim. Canada is not about to substitute Europe, Mexico or Asia for the United States. Even after recent diversification, Statistics Canada reported that Canadian exports to the U.S. were worth C$50.5 billion in July 2026 alone. That month, exports to Mexico were roughly C$1.1 billion. The scale difference explains why a healthy U.S.-Canada relationship remains economically important regardless of how many new markets Canadian companies develop.

Uncertainty also continues to affect business investment. Creel said volatility makes customers less willing to commit capital and suggested that greater clarity around CUSMA/USMCA would improve the outlook. CPKC itself is dealing with fluctuating fuel costs, commodity-market pressures and uneven freight conditions even as grain, intermodal and cross-border traffic provide growth. Diversification therefore looks less like an escape from the United States than an insurance policy against relying too heavily on one customer. What the trade crisis appears to have changed is Canada’s willingness to pay for that insurance — through new infrastructure, new markets and a more deliberate effort to create economic options.

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