April 7-12, 2024
A ROBUST AND VARIED TRADE RELATIONSHIP
The U.S. and Canada enjoy the world’s largest and most comprehensive trading relationship, with more than $3 billion in goods and services crossing the border between the two countries daily. Canada is a highly receptive, open, and transparent market for U.S. products and services. In 2022, Wisconsin exports to Canada exceeded the total Wisconsin exports to Mexico, China, Germany, the United Kingdom, and Australia (the next five leading destinations) combined.
Due to its geographic proximity and cultural similarity to the U.S., as well as a common language and a high level of existing cross-border trade, Canada is a strong opportunity market for Wisconsin companies across all sectors. Canada is the largest export market for U.S.-produced goods ($356 billion in 2022) and for goods produced in Wisconsin ($8.6 billion in 2022).
The U.S. and Canada also share a historically stable trade relationship. In 2020, the U.S.-Mexico-Canada Agreement took effect, resulting in what the U.S. Department of Commerce calls “freer markets, fairer trade, and robust economic growth across North America.” The agreement also helps clarify cross-border e-commerce transactions, providing Wisconsin businesses with opportunities to sell via their e-commerce platforms to Canadian customers.
In April 2024, 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, Toronto 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 their 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—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.
In addition to customized meetings and company-specific market intelligence, this trade venture offers the opportunity to meet potential partners face to face and to visit their facilities so that you can gauge their sales and distribution capabilities most accurately. While virtual meetings are a great way to establish contact and discuss opportunities, meeting those partners in person can help to seal the deal and propel a business relationship forward.
The Canadian economy is a highly developed, mixed economy. Canada is one of the wealthiest nations in the world, with a high standard of living and excellent quality of life. Canada is the ninth-largest global economy based on nominal GDP, logging 3.6% growth in 2022 with positive growth also projected for the current year. Canada is one of the fastest-growing member countries of the Organization for Economic Cooperation ad Development. A drive to attract skilled immigrants has pushed the country’s population over 40 million people, with nearly a million new citizens added from 2020 to 2023. Some projections predict that Canada’s population may exceed 100 million by the end of this century. Canada’s cultural make-up is highly diverse, with over half of Toronto residents coming from outside of Canada. This provides significant talent and skills sets to the market as well as opportunities for culturally diverse products and services. Canada also has business nuances that differ between provinces, as provinces may have stronger north-south ties (with U.S. border states) than east-west connections.
The greater Toronto area, which is a part of the highly integrated Great Lakes distribution and production network, is a rich and diversified economy. Ontario is the largest provincial economy in Canada, accounting for nearly 40% of the nation’s total GDP.
Winnipeg is the capital and largest city of Manitoba Province. With a population of 750,000, it is the sixth-largest city in Canada. Key sectors of economic strength and growth include aerospace, advanced manufacturing, creative industries, information and communications technology (ICT), and agribusiness.
While Canada, like most markets, saw lower sales in many categories during the pandemic, most categories have returned to pre-pandemic levels and some have risen higher. Sectors such as ICT, digital health applications, advanced manufacturing, clean technology and energy reduction, automation, agricultural technology, critical minerals mining infrastructure, and the electric vehicle supply chain are all growing rapidly in Canada. Other sectors such as digital health and online retail and food sales continue to surge, building on growth logged during the pandemic. Artificial intelligence is another rapidly growing area that also provides opportunities in a wide range of sectors.
While traditional industry sectors such as oil and gas and manufacturing are all doing well currently, the 2050 net zero goal put forth by the current federal government and supported by significant government spending ($180 billion over 12 years) and tax credits is driving a move away from fossil fuels in multiple areas—including grid transformation; renewables development; vehicle electrification infrastructure; energy conservation in commercial, institutional, and residential buildings; and food waste and packaging reduction. As Canada’s electricity needs continue to grow rapidly, this creates opportunities for smart grid systems. Green infrastructure upgrades—including public transit, ports, broadband networks, energy systems, social infrastructure, and natural spaces—are also a focus.
In addition, Canada, the U.S., and Mexico continue to work together to refine various aspects of the USMCA agreement, with a focus on transparency in supply chains. In a more tangible example, the U.S. and Mexico have also contributed a significant number of firefighters to the worst forest fire season on record in Canada. The fires have brought increased urgency to the challenge of decarbonization and adapting to climate change, reflected in the Canadian government’s investment tax credit (ITC) programs introduced in the 2022 and 2023 budgets. The clean technology ITC provides substantial credits for areas such as carbon capture, production of clean hydrogen, clean electricity generation systems (i.e., solar, wind, hydro, nuclear), electricity storage systems, low-carbon heat and electricity equipment, and industrial zero-emission vehicles.
As a large, advanced economy with well-developed infrastructure, Canada is an ideal first market for new-to-export companies as well as those seeking to further expand their business and distribution networks in country. Canada is a market that seeks innovative, advanced technology product and service solutions—so whether a company is a first-time or seasoned exporter, Canada 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 their offerings have a demonstrable value proposition that distinguishes them from other products and services already in the market.