The U.S. and Canada enjoy the world’s largest and most comprehensive trading relationship. The two countries trade more than $2 billion in goods and services daily. Canada is a highly receptive, open and transparent market for U.S. products and services, with Canadians spending more than 60 percent of their disposable income on U.S.-made goods and services. Canada is the largest export market for U.S.-produced goods ($299 billion in 2018) and for goods produced in Wisconsin ($7 billion in 2018). In fact, Wisconsin exports to Canada were more than total Wisconsin exports to Mexico, China, Germany and the UK combined in 2018.
Due to its geographic proximity and cultural similarity to the U.S., as well as the already high level of cross-border trade, Canada is a market of strong opportunity for Wisconsin companies across all sectors. Canada’s economic fundamentals remain solid, and the economy is expected to expand at a healthy pace this year. Canada is the top-ranked country in the G20 for ease of doing business for the five-year period 2016-2020, according to the Economist Intelligence Unit. The North American Free Trade Agreement (NAFTA), along with similar business practices and a common language, further ease trade between the U.S. and Canada.
NAFTA is an almost 25-year-old agreement. Given that the internet was not yet invented when the agreement was ratified, the opportunity to modernize and tweak aspects of it in order to better reflect the realities of today’s integrated global economy is promising. NAFTA has created a truly hemispheric supply chain that has become an essential fact of life for many small businesses as well as major manufacturers. While the ratification of the newly negotiated U.S.-Mexico-Canada Agreement (USMCA) has not yet taken place, trade between the U.S. and Canada is expected to remain strong regardless. Business in general, and international business in particular, is a relationship- based endeavor, and visiting foreign markets in person is critical to maintaining, developing or solidifying these relationships.
Business connections
In March 2020, the Wisconsin Economic Development Corporation (WEDC) will be leading a global trade venture to Canada. Wisconsin companies, whether new to exporting or looking to expand their exports into Canada, are invited to participate in this program. The cities included in the program, Vancouver and Winnipeg, were chosen because of their markets’ strategic importance for Wisconsin companies. Exporting is a must for any company seeking to grow; Wisconsin companies across all sectors are encouraged to consider participating in this global trade venture.
In each city, participants will be scheduled for customized one-on-one meetings with prospective partners in the market. These partners are chosen specifically for each participating company based on the company’s business needs and objectives. Each participant in the global trade venture will also receive market intelligence specific to his or her company, detailing considerations to keep in mind when introducing the company’s product or service into the Canadian market. WEDC has eyes and ears on the ground in Canada, in the form of an authorized trade representative based in Toronto—thus making it easier for Wisconsin companies to find local partners they can trust and taking some of the guesswork out of launching in a new market. Traveling as part of a trade venture also provides the opportunity for peer-to-peer networking and sharing of experiences and business connections among participants.
Canada outlook
It is difficult to speak of the Canadian market as a singular market, as it is quite segmented based on regions—but as a large, advanced economy with well-developed infrastructure, Canada is an ideal market for new-to-export companies as well as those seeking to further expand their business/distribution networks in country. The Canadian market seeks innovative, advanced technology products and service solutions—so whether a company is a first-time or a seasoned exporter, this market should be a key component of its export growth strategy. In Canada, Wisconsin companies will find a friendly market with many potential buyers for their products and services—especially if they offer innovations that solve problems for companies in their respective sectors. Companies do not need to have prior export experience to benefit from this trade venture, but applicants should view exporting as an integral part of their overall corporate growth strategy.
Vancouver and the surrounding province of British Columbia is a rich and diversified economy. British Columbia is the fourth-largest provincial economy in Canada, accounting for about 13% of national GDP, and its economy has steadily seen consistent growth. The Conference Board of Canada ranks British Columbia as the fastest-growing provincial economy in Canada since 2013. The Royal Bank of Canada estimates that British Columbia’s economy will outpace the overall Canadian economy, with 2.5% growth forecast in 2020 and continued projected growth of 2.3% annual average from 2021 to 2023. Vancouver’s recent economic growth has been largely driven by a few key sectors: construction, manufacturing, technology, digital entertainment and the green economy, to name a few. It is also worth noting that greater Vancouver is the largest manufacturing center in British Columbia. Vancouver is British Columbia’s major commercial and financial center, with strong trading transportation and economic links to the rest of the world.
The economy of Manitoba, of which Winnipeg is the capital, is one of the most diversified in Canada, and is forecast to grow 1.7% in 2020 (on par with the overall growth forecast for Canada as a whole). Manitoba is an often overlooked region in central Canada, but its economic strengths align well with Wisconsin’s. Processed foods and beverages account for the largest value of all manufactured goods. Machinery making; metal fabricating; and the manufacturing of transportation equipment and electrical, chemical and printed products are also important. Mining production in Manitoba consists largely of metals that come mainly from mines in the north. Manitoba is also known for its forest products industry, including furniture, doors, windows and cabinetry.
Funded in part through a grant from the U.S. Small Business Administration
