A city in B.C.’s Interior is emerging as one of Canada’s most resilient cities in the face of U.S. tariffs.

The Canadian Chamber of Commerce recently released a report measuring trade-related economic stress and progress in diversifying exports beyond the U.S. market in 2025.

Kelowna was the only B.C. city to rank among the top five performers, outperforming other major B.C. centres in export diversification, new business openings and employment growth.

The city’s non-U.S. exports rose 28 per cent year over year, compared with a 3.2 per cent increase in Vancouver and a decline of more than 10 per cent in Victoria. Total exports grew 6.38 per cent, while Vancouver and Victoria both recorded declines.

“While I can’t point to a single factor, a few things likely help explain why Kelowna appears to be performing relatively well in both diversification and broader economic indicators,” said Patrick Gill, vice-president of Business Data Lab at the Canadian Chamber of Commerce.

Compared with many manufacturing-heavy Canadian cities, Kelowna has lower direct exposure to the U.S. market and a relatively diversified economy spreading across health care, retail, tourism, agriculture, education and transportation, Gill said.

“That mix may make the region somewhat less vulnerable to tariff-related disruptions than cities that rely more heavily on a small number of export-oriented industries,” he said.

The report also found Kelowna recorded a 1,057 per cent increase in net business registrations last year compared with 2024, the largest gain among Canada’s major metropolitan areas. Vancouver posted a 221.38 per cent decline, compared with a national average decline of 103.7 per cent, while Victoria recorded a 28.57 per cent increase.

In addition, Kelowna was one of the only two metropolitan areas to post employment growth in 2025. Its consumer spending increased 103.5 per cent in 2025, the second-highest growth rate nationally after Vancouver, which recorded a 218.6 per cent increase.

“Regions that are less reliant on U.S. trade and more diversified from a non-U.S. trade perspective are generally doing better on [local economy],” said Gill.

“Energy, critical minerals, agriculture, there’s really high demand for those commodity inputs globally.”

Quick pivot and lean on Asian exports

The city’s strong performance reflects a business community that has taken initiatives to adapt quickly as trade tensions reshape global markets, according to business leaders in the region. When U.S. tariffs hit her company last year, Jill White, president and owner of Kelowna-based playground equipment manufacturer Makr Group, began looking beyond its traditional U.S. customer base.

“We’re expanding our presence in Europe, and we’re certainly putting more efforts on our sales into the Asia-Pacific region and into South America,” said White, adding that her business in Australia and Europe have grown since U.S. tariffs.

White said many entrepreneurs like her are drawn to Kelowna from the rest of Canada by its warmer winter, nice scenery and lifestyle.

“But the market here is small, so if you are going to have a business of any size, you have to be thinking beyond your local surroundings,” said White. “We’ve always kind of punched above our weight class here.”

Kelowna has a higher concentration of entrepreneurs than the province and country overall. Nearly one in five (19.2 per cent) workers in the Kelowna metropolitan area is self-employed, compared with 17.3 per cent in B.C. and 14.1 per cent nationally, according to 2022 Statistics Canada stats.

“Kelowna is a specific kind of economy … it’s not a head office city. It’s not a manufacturing centre,” said George Greenwood, CEO of the Kelowna Chamber of Commerce.

“We’re primarily a tourism and agriculture destination, but also with major educational institutions such as UBC Okanagan, a large student population, and rapidly growing aerospace, software and technology sectors,” he said.

Kelowna is home to KF Aerospace, one of Canada’s leading aircraft maintenance, repair and overhaul (MRO) providers, serving primarily domestic clients.

However, small businesses and technology startups continue to make up a significant share of the local economy, Greenwood said.

“I think the resilience they’ve learned over the years is that they have to be very nimble and quick to pivot. And I think they’re demonstrating that in some of these statistics,” he said.

The city’s trade profile may also be helping, said Greenwood. Exports to the U.S. account for just 2.74 per cent of Kelowna’s GDP, well below the national average of 19.17 per cent.

The region has long been oriented toward international markets, particularly in Asia. Every year, a large volume of cherries, fish and Christmas trees are being exported to markets including China, Vietnam and Taiwan, according to Greenwood.

“Those are markets that have grown a little bit for us just because the economy has grown,” he said, adding that the region exports products such as metal derivatives, fabrication, steel, aluminum and chemicals to Southeast Asia.

A potential business destination?

Some believe Kelowna, with its growing business community and natural amenities, has the potential to become a more significant business hub outside Metro Vancouver.

In March, the World Trade Centre launched its Okanagan branch—the second in B.C. and the eighth in Canada—with a goal of promoting international trade and investment in the region, according to the organizer of the local branch.

“It’s one of the most desirable, fastest-growing areas in B.C. with a combination of lifestyle, natural amenities and favourable weather,” said Richard Tam, president and CEO of WTC Okanagan, a private entity.

“The culture here [is entrepreneurial.] People have a mindset of business and they’re interested in reaching national and international markets … Longer term, there’s huge potential.”

The centre is exploring the development of a convention centre to host networking events, trade missions and international delegations. It also hopes to build a five-star hotel—the first in the region—capable of hosting major international business events.

“People enjoy the sunshine, the lakes, the golfing, the skiing and stuff like that, so naturally it already has a draw,” said Tam.

“We want to turn Kelowna into a gem of B.C., with enough modern facilities to host global world-class events to really enjoy the natural amenities that are offered but also as a place where innovation happens.”

Greenwood said Kelowna has the infrastructure needed to support further growth as a business hub.

“We do check a lot of the boxes now. We have major highway routes that you can get in and out of four hours to Vancouver, seven hours to Calgary. We have an international airport,” he said.

“I think as more of the world learns about Kelowna, it won’t take very long for people to perk up their ears and say, hey, there might be some opportunity there in this place called Kelowna or in the Okanagan in British Columbia.”

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