Coface credit analyst Jordan Mofford explains the idea behind Canada's Budget 2025 and why now is the time for companies to invest in trade credit insurance.
In response to global trade disruptions, Canada has launched a new trade infrastructure strategy aimed at doubling exports to non-U.S. markets over the next decade. Targeting $300 billion in new trade, this strategic pivot could be the beginnings of a new Canadian economy versus a historical overreliance on U.S. markets.
The Trade Diversification Corridor Fund (TDCF), a $6 billion infrastructure initiative announce in Budget 2025, will support port expansions, rail upgrades and digital infrastructure projects to optimize logistics. The fund, delivered by Transport Canada, will also strengthen existing supply chains and expand Canada’s trade routes beyond its traditional partners.
While supply chain issues and bottlenecks have become historical pain points, this change is viewed as a bold move for Canadian trade and is welcomed by industry leaders.
In addition to supply chain improvements, strategic infrastructure projects will serve both civilian and military needs, particularly in the Arctic.
As part of the plan, the government announced a $1 billion Arctic Infrastructure Fund, distinct from the TDCF, which will invest in strengthening existing types of vital transportation in the North, including upgrading seasonal roads and ports to all-season status, rehabilitating airport runways to accommodate larger aircraft, and expanding facilities for dual civilian and military use.
This undertaking paints a clear picture of Canada’s need to diversify exports and build economic resilience. So how can Canadian companies adapt and capitalize on this new infrastructure? Here are four reasons why Coface trade credit insurance (TCI) is a crucial tool for transforming the risk of trade diversification into a manageable opportunity.
1. Protection against non-payment
With the budget aiming to double exports to non-U.S. markets over the next 10 years, Canadian exporters would begin to enter, new and less familiar markets. These entrances would lead to greater counterparty risk. Where TCI would become essential to mitigate non-payment risk, particularly in markets that are considered emerging markets or where there is less transparency in credit environments.
2. Enhanced access to financing
The $5 Billion allotted to the TDCF is expected to accelerate trade volumes in underutilized regions, which would stimulate the need for working capital financing, receivables protection and credit enhancement tools. With TCI, banks and lenders facilitate growth with greater confidence, and optimize their balance sheets. This can lead to better financing terms and larger lines of credit – providing you with the capital needed to invest in expansion.
3. Confidence to explore new global markets
The trade section of the budget emphasizes regional diversification in underutilized areas, which would bring more small and medium-sized exporters into global trade. With a limited experience in exposure to global markets and international buyers, TCI allows companies the financial security to venture into a higher-risk market with the aid of credit risk management.
4. Mitigated Geopolitical Risk
With an ever-evolving tariff landscape, instability in alternative and developing markets, these external factors ultimately lead to an increase in default risk. By transferring these unpredictable risks to an insurer, Canadian companies can focus on pursing new markets and diversified trade routes.
As business’ plan to navigate and operate within new markets, staying informed and protected becomes more critical than ever. To learn more about TCI and how Coface has been managing trade credit risk for almost 80 years, visit our website and contact us today.
Jordan Mofford is an EIC Credit Analyst Manager for Coface Canada. For more trade credit insurance insights, follow Jordan on LinkedIn.
