The Case for Canadian Arbitration in a Diversifying Trade Landscape

As the federal government diversifies Canada’s trading relationships beyond traditional partners and actively pursues deeper commercial ties in strategic markets, a parallel and essential opportunity is emerging to supercharge Canada’s international arbitration landscape as the go-to arbitral jurisdiction for disputes involving Canadian businesses—and beyond.

According to Statistics Canada, in 2024, Canadian exports to the United States represented 75.9% of Canada’s global exports. Meanwhile, Canada’s imports from the U.S. accounted for 62.3% of total imports. Although it is anticipated that the scale of trade with the U.S. in 2025 will be lower than in the previous year, it is unlikely that the difference will be significant—at least until the federal government’s trade diversification policy comes to fruition with established foreign partners for exporting  Canadian goods, materials, and services.  

Since the premiership of M. Carney’s Cabinet in March 2025, the focus has been on the Indo-Pacific, the Middle East, Africa, and South America to deepen existing commercial ties with Canada and forge new ones. These foreign markets offer tremendous opportunity for growth and resilient supply chain; however, many Canadian businesses are unfamiliar with the varied legal cultures, regulatory landscape, predictability, or certainty of foreign court systems.

 It is therefore very likely the ADR community will witness a heightened demand for predictable, neutral, business-friendly dispute resolution mechanisms, such as international arbitration. This creates a significant opportunity for Canada to present itself as a neutral and reliable seat for resolving various disputes arising from, for example, joint-venture and shareholder disagreements, construction and infrastructure projects, or supply chain disruptions.

Indeed, Canada’s arbitration ecosystem is perfectly positioned to grab this opportunity, with long established arbitration centres such as the ADR Institute of Canada (ADRIC), and Vancouver International Arbitration Centre (VANIAC), modern arbitration rules such as the ADRIC 2025 Arbitration Rules and, most importantly, arbitration friendly courts with a strong record of non-interference in the parties’ agreement to arbitrate or when enforcing a foreign award.[1]

Further, Canada is signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, making Canadian awards internationally enforceable with very limited judicial scrutiny.

That said, the most significant source of Canada’s arbitration leverage lies in its bijural and bilingual legal system—a substantial asset for attracting international arbitration, particularly from Africa, the Middle East, Europe, and South America. The bijural tradition means Canadian courts and arbitrators are adept at drawing on both legal systems when resolving disputes and are sensitive to the conceptual autonomy required when interpreting and enforcing legal concepts that often arise in international arbitration, such as the principle of good faith, which is applied differently in civil and common laws, and is often argued in international arbitrations.

This flexibility and respect for legal diversity are attractive to international parties who may be more comfortable with one tradition but require impartiality and understanding of both legal systems. Thus, making Canadian civil and common law jurisdictions a viable seat for foreign arbitrations. With the advent of virtual hearings, geographical remoteness is unlikely to form any significant challenge for foreign arbitrations based in Canada.

A boost for Canada’s Business Hubs and Professional Services

With rising demand for neutral venues, Canadian arbitral institutions stand to expand their global visibility. Increased case loads can drive specialisation, foster new partnerships and position Canada as a North American alternative for disputes involving emerging economies, —or as a hub for arbitrations between European, south American, and African parties, creating a strong and resilient circle of Canadian influence in international arbitration.

Most importantly, a thriving arbitration sector has far-reaching economic ripple effect, including demand for counsel, arbitrators, expert witnesses, translators and conference venues, arbitration has the potential to fuel growth not only in legal services but across local economies. Otherwise labelled as money in arbitration by the French arbitrators, Prof. Thomas Clay and Walid Ben Hamida,[2]

Canadian arbitration offers a significantly wider qualitative experience with the advent of Artificial Intelligence and the requirement for ESG-aligned practices, especially in energy, transportation, and infrastructure disputes. Indeed, Canadian courts were amongst the first national courts to render decisions on the use of AI or human assisted technologies in dispute resolution processes.[3] Moreover, Canada’s reputation for clean governance positions it to take a leadership role in shaping modern arbitration norms that align with responsible investment and sustainable development.

Conclusion

Canada’s drive to broaden its trade partners and diversify its supply chain offer more than reshaping its export destinations. Given that international arbitration and international trade are inherently intertwined, expanding the latter increases the opportunity for Canadian jurisdictions to elevate themselves as a global hub for international arbitration, positioning Canada as a preferred venue for alternative dispute resolution.