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Doing Business in Canada 2012

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Market Overview

U.S. companies looking to explore new markets to expand their international portfolios need to consider the tremendous business opportunities offered in Canada. A solid and integrated supply chain mainly in the automotive and aerospace sectors already make up roughly 30 percent of the $600 billion in bilateral trade recorded in 2011. New developments in shipbuilding, air-defense, safety and security, mining, and renewable energy, will create virtually limitless business opportunities.

In this revised edition of the Country Commercial Guide, you will obtain information about what you need to know and how to be prepared to maneuver in this vast ocean of export opportunities. Nevertheless, the business landscape is constantly changing and the U.S. and Canadian Governments, through the Beyond the Border Initiative, are committed to safely increasing the flow of people and goods across the border while maintaining the security and integrity at the border.

Governments are working to reduce outdated and unnecessary regulations through the U.S.-Canada Regulatory Cooperation Council and enhanced IPR protection to support increased trade and investment.

Canada continues to hold a historic record as the United States’ largest export market, accounting for 20 percent of total U.S. trade. Total stock of Canadian foreign direct investment in the United States also ranked among the top four in the world.

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Market Challenges

Though Canada remains the most accessible market in the world, doing business in Canada is not the same as doing business in the United States. Canadian Customs documentation, bilingual labeling, packaging requirements, ITAR (International Traffic in Arms Regulations), and Canadian federal and provincial sales tax accounting can be surprisingly challenging.

Canadian federal, provincial, and municipal procurement procedures, while open in principle to U.S. bidders, can vary from procedures followed in the United States. Bidders must be registered in Canada in order to bid, and bidders must fulfill all the requirements in order to qualify to bid (specified requirements are non-negotiable). In some cases, security clearances are required for personnel prior to submitting a bid, and in a number of projects, there may be requirements for off-sets (known as Industrial Regional Benefits or IRBs).

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Market Opportunities

Four trends are driving expanding market opportunities for U.S. firms in several key sectors.

By removing additional barriers to trade, the border and regulatory cooperation initiatives will make United States and Canadian supply chains more efficient and more integrated. This will provide enhanced opportunities for U.S. firms seeking to enter the Canadian aerospace and automotive sector supply chains.

The continuing strength of the Canadian dollar will mean continued expansion in Canadian travel and tourism to the United States, including an expanding medical tourism component.

Continued high global prices for energy and other natural resources will drive increased development of Canadian energy and mining resources. These developments offer substantial opportunities for U.S. renewable energy, mining, oil and gas, and environmental-related sectors.

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Market Entry Strategies

For many companies (particularly in the manufacturing and construction sectors), frequent visits and establishing a local presence will be crucial to long-term market success. For many U.S. companies, joining in a U.S. delegation to a Canadian trade show can be the best first step.

For U.S. companies with limited budgets and marketing staff, we recommend:

  • a pilot program called Client Finder which uses advanced database tools to help identify potential Canadian clients and partners, and
  • working with the Commercial Service to seek potential sales to Canadian government entities.

U.S. companies new to the Canadian market should contact a CS Canada Commercial Service Officer to obtain information about resources and value added assistance.

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