UK Trade and Investment (UKTI) has identified the Canadian business market as one with a varied structure where multinational companies and smaller enterprises operate in a dynamic environment. The trade organisation also recognises that, although Canada’s abundant natural resources continue to be an important part of the equation, new hi-tech industries are also emerging.
Why UK Companies Should Export to Canada
While UKTI cautions that the country is vulnerable to the slowdown in the U.S. market, it also emphasises a number of positive factors affecting Canadian business. For example, the strength of the financial sector, government finances that are in, “relatively good shape” and an expected GDP growth of 2.6% in 2013-16.
Sitting alongside the promising business indicators is the quality of living index which, according to the Economist Intelligence Unit (EIU) 2010, ranks Canada highly in terms of education, life expectancy and fourth in the world in terms of Gross Domestic Product (GDP) per capita.
With the United States still topping the table as of July 2011, Canada was ranked number 13 in the list of the UK’s top trading partners (export general trade) with year-to-date export values of £2,789 (millions). The UK is also the second largest foreign direct investor in Canada, trailing only the United States.
An array of statistical evidence from authoritative sources supports UKTI’s argument that Canada, despite a generally gloomy world picture, is an excellent place to do business. The recently published World Economic Forum Global Competitiveness Index rates Canada number 12 out of 142 countries surveyed. The report cites a number of areas where the Canadian market performs particularly well, for example:
- Soundness of Banks
- Availability of financial services
- Local supplier quality
- Quality of educational system
- Quality of scientific research innovation
- Availability of scientists and engineers.
Of course a number of factors also drag the rating down, most notably inefficient government bureaucracy.
The World Bank’s Ease of Doing Business index also provides prospective exporters a range of essential statistical data, with Canada ranking number 7 out of 183 countries analysed.
According to the index, Canada’s particular strengths are:
- Starting a business
- Protecting investors
- Paying taxes.
Investment in Canada
In acknowledgment of the Canadian business market’s importance to UK companies, UKTI has organised a multi-sector trade mission to the country in October 2011.
The trade body has identified the following sectors as the ones most likely to offer opportunities for UK business with a desire to invest in Canada:
- Aerospace
- Pharmaceuticals
- Information Technology
- Food and Drink
- Automotive
- Energy and Power
- Construction
- Mining
- Advanced Engineering
- Financial and professional services
- Defence and Security.
Access to NAFTA Markets
With about 75% of Canadian exports already going to its southern neighbour, UK companies operating in Canada also gain access to the lucrative North Atlantic Free Trade Agreement (NAFTA) markets of the United States and Mexico.
UKTI, with a reminder that the Canadian market is receptive to British products, also highlight the opportunities for, “strategic business partnerships and technology transfers between UK and Canadian companies.”
Sources:
HM Revenue and Customs, Overseas Trade Statistics, site accessed 16 September 2011
UK Trade and Investment, Canada – Market Visit (Multi Sector), site accessed 16 September 2011
World Economic Fourm, The Global Competitiveness Report 2011-2012, site accessed 16 September 2011
Economist Intelligence Unit, Global Forecasting Service: North America, site accessed 16 September 2011
