canada country analysis for int-113

Kristi Cunningham

CanadaCountry Analysis

RationaleVisiting Niagara Falls when I was in high school allowed me to realize the beauty of Canada’s geography. Additionally, my employer has partnership with a company in Canada. Because we routinely interact with our Canadian partners I feel that analyzing Canada will provide me with a greater level of insight during consideration of geographical issues our company faces.

Location and Geography

Introduction: Canada

Regional location Northern North America

Water access Atlantic Ocean, Artic Ocean, Pacific Ocean, Beaufort Sea, Labrador Sea

Bordering countries The United States of America

Natural hazards or climate

Continuous permafrost in the north, cyclonic storms form east of the Rocky Mountains, and the vast majority of volcanoes in Western Canada’s Cost Mountains remain dormant

(Central Intelligence Agency, 2015)

(Canada Orthographic Projection, n.d.)

Sociocultural Environment

Country Composition

(Canada Literacy, n.d. and Central Intelligence Agency, 2015)

Literacy Rate Total population (99%), male (99%), female (99%). (As defined by age 15 and over who can read and write, estimated in 2003)

Rate of urbanization 1.22% (rate of change) and 81.8% urban population

Densely populated cities

Toronto (5.993 m); Montreal (3.981 m); Vancouver (2.485); Calgary (1.337 m); Ottawa (1.326 m); Edmonton (1.272 m)

Major religions Catholic 40.6%, Protestant 20.3%, other Christian 6.3%, Muslim 3.2%, Hindu 1.5%, Sikh 1.4%, Buddhist 1.1%, Jewish 1%, none 23.9%

Educational data Education expenditures (5.3 % of GDP)

Age structure 0–14 (15.46%), 15–25 (12.39%), 25–54 (40.69%), 55–64 (13.74%), 65+ (17.73%)

Age Structure in Canada

AgeStructure

Values


(Kwintessential, 2014)

Power Distance Individualism MasculinityUncertainty Avoidance

Long Term Orientation Indulgence

39 80 52 48 36 68

Interdependence Egalitarianism

Superiorsare always accessible;

managers rely on individual employees and teams for their

expertise Hierarchy is

established for convenience

Straightforward exchange of information

Interdependence

Loosely-knit societyExpectation is that people look after

themselves and their immediate family

Employees are expected to be

self-reliant and display initiative

Hiring and promotion decisions are based on merit or evidence

of what one has done or can do

Moderately“Masculine” society

Strive to attainhigh standards of

performance in bothwork and play

Work-life balance indicates desire to enjoy personal

pursuit, family gatherings,

and life in general

Accepting of uncertainty

Tolerant of ideas or opinions from

anyone Allow the freedom of

expression Not rules-oriented,less emotionally expressive than cultures scoring higher on this

dimension

Strong concern with establishing theabsolute truth

Exhibit great respectfor traditions

Relativelysmall propensity

to save for the futureFocus on

achieving quick results

39 80 52 48 36 68







Interdependence












and life in general





dimension












Interdependence












and life in general





dimension






Willingness to realize impulses and desires with

regard to enjoying life and having fun.Possess a positive

attitude and have a tendency towards

optimism.

Place a higher degree of

importance on leisure time, act as

they please and spend money as

they wish.NOTE: One will likely find subtle differences between Anglophone Canadians and Francophone Canadians (the Province of Quebec.) Compared with their Anglophone counterparts, French-Canadians can be more formal, hierarchical, moderately relationship focused, and more emotionally expressive. The scores for Quebec are as follows: pdi 54; idv 73; mas 45; uai 60

Geert Hofstede Dimensions of National Culture - Canada

Communication



Language: English (67.1%), French (21.5%), Chinese (2.6%), Punjabi (0.8%), Spanish (0.7%), Italian (0.6%), and Arabic (0.5%) Nonverbal: • Canadians communicate more frequently by the spoken word rather

than by non-verbal expressions. • Non-verbal expressions are only actually used to add emphasis

to a message or are part of an individual’s personal communication style.

• Canadians like their space and prefer to be at an arm’s length when speaking to someone.

• The most common greeting is a firm handshake accompanied by direct eye contact and a sincere smile.

• French Canadian friends may greet each other by lightly kissing on the cheeks (once on the left cheek and once on the right).

engl ishFRENCH

chinesePunjabi

SP

AN

ISH

ITA

LIA

N

ARABIC

Business Etiquette



Canadian business relationships often begin in a reserved manner; the relationship becomes friendly and informal once the relationship is firmly established.

Shake hands while maintaining eye contact with each person attending the meeting upon arrival and departure. Men may be proactive in offering their hand to women.

Honorific titles and surnames are usually not used. However, academic titles are important in Quebec and are used with the honorific Monsieur or Madame.

Business cards are exchanged after the initial introduction. In Quebec, one side of the business card should be translated into French and the card should be presented in a manner that offers the French side facing the recipient. Recipients should take a moment to examine any business card presented before putting it away.

Business meetings carry a relaxed and informal mood but follow a schedule and are typically well-organized. All Canadians will expect each attendee of a meeting to participate and express opinions, regardless of their level of experience.

It is important to have facts and figures to substantiate claims and promises when presenting information. Canadians tend to be rational and logical, and emotions, passion or feelings are not a convincing factor in business decisions.

(Thinkstock, n.d.)

Business Observations

Sociocultural Observation Deck


The geographic location of Canada allows for easy access to both Alaska and the contiguous United States, as well as Greenland. Toronto has the largest population and features easy access to the contiguous United States.

Canada has sufficient water access to allow for easy shipping options. Canada exchanges substantial trade surplus with the US, which absorbs

about three-fourths of Canadian merchandise exports each year. Canada is the US’s largest foreign supplier of energy, including oil, gas, and electric power, and a top source of US uranium imports.

Canadians are a polite and slightly reserved associates. There is little cross-over from personal life to work life and prefer tactfully direct conversations. A softer tone, especially early in a business relationship, will ease potential communication risks.

The age structure of Canada indicates an active labor force with the majority of the population being in the working age category (15–54). A significantly high percentage of the population can read and write as well, which is promising for training purposes.

English and French are both recognized by the Constitution of Canada as “official languages” which requires all laws to be enacted in both English and French. Additionally, all government services are offered in both languages by requirement. Managers should ensure all training, training materials, and office communications are available in both English and French.

Government and Ideologies

Political-Legal Environment

(Government of Canada, 2016)

Type of Government

The type of government is a federal parliamentary democracy (Parliament of Canada) under a constitutional monarchy; a Commonwealth realm

3 Levels of Canadian Government FEDERAL(National Level)

PROVINCIAL(Provincial / Territorial Level)

MUNICIPAL*(City Level)

The federal government is based in Ottawa. The Prime Minister heads the federal government which deals with national and internal matters such as:

A Premier leads each province and territory. Provincial and territorial governments have the power to change their laws and manage their own public lands.

Mayors lead municipal governments. This is the level of government that governs a city, town, or district (a municipality).

National DefenseForeign AffairsEmployment InsuranceCriminal LawBankingTelephones

MoneyTaxesMailShippingRailwaysPipelines

EducationMunicipal institutions

HealthTransportation

Public TransportationFire Protection & Local Police

Local Land UseParks

LibrariesCommunity Water Systems

Aboriginal lands & rights RoadwaysParking

*Canadian citizens elect political representatives at all three levels of government: federal , provincial or territorial, and municipal to the federal House of Commons; the provincial and territorial legislatures; and their city council. These representatives pass laws; approve and monitor spending; and keep the government accountable.

*First Nations governance: Across the country, band councils govern First Nations communities. Band councils are similar to municipal governments. Band members elect the band council which makes decisions that affect their local community.

Canada Parliamentary Democracy The Sovereign (Queen or King) Senate House of Commons

Constitutional Monarchy

Canada is a constitutional monarchy. This means that the Queen or King of Canada is the head of state, while the Prime Minister is the head of government. Thee Queen is represented in Canada by the Governor General, who is appointed by the Sovereign on the advice of the Prime Minister, usually for five years. In the ten provinces, the Sovereign is represent by the Lieutenant-Governor, who is appointed by the Governor General on the advice of the Prime Minister, also normally for five years.

Political Leadersof Canada

Rheal Fortin*Bloc Quebecois*interim leader

Rose Ambrose*Conservative

Party of Canada*interim leader

Elizabeth MayGreen Party of Canada

Justin TrudeauLiberal Party of Canada

Thomas MulcairNew Democratic Party

(Logos and photos retrieved from official party websites)

Political Pressure / Opposition Groups

agricultural sector; automobile industry; business groups; chemical industry; commercial banks; communications sector; energy industry; environmentalists; public administration groups; steel industry; trade unions

Government and Ideologies


(Central Intelligence Agency, 2015)

Corruption


(Transparency International, 2015)

Bribe Index Rank: 6/28 Score: 8.5/10

Corruption Perception Index Rank: 9/168 Score: 83/100

OECD Anti-Bribery Convention Enforcement: Moderate

Control of Corruption Rank: 97% (Siwat, n.d.)

Trade Regulations & Legal Considerations


Employment Law

• Minimum wage set by the Commission, as of June 2016: 2,030 per month in Canadian dollars (CAD)

• Minimum Age for Employment & Hazardous work: 17 years old• Law sets minimum wage provision• Maternity, paternity, and parental benefits are available to mothers, fathers,

and adoptive parents if in insurable employment and have accumulated at least 600 hours of insurable employment during the qualifying period. Canada offers 35 weeks at 55% of the average insurable earnings amount (up to $50,800 CAD per year), which can be divided between the parents (Government of Canada, 2016). In Manitoba and Quebec, in certain specified circumstances, employees are entitled to an unpaid leave of absence for up to 52 weeks if their child has disappeared (Anderson, 2013).

• Canada has 14 sets of employment regulation legislation, one for federal jobs and then one for each province. The nature of the business determines whether a company and its employees are subject to federal or provincial/territorial regulation. Federal jobs are typically related to the national interest and typically include the banking, telecommunications, and air transport industries. This legislation guides employee’s minimum rights regarding work hours, overtime, annual leave, public holidays, and maternity, parental and other leaves. All jurisdictions provide for a basic statutory annual leave entitlement of two weeks, except for Saskatchewan where the basic benefit is three weeks. In most cases, one year’s service with the current employer is required before annual leave entitlement applies. In addition to the basic eligibility, most jurisdictions provide for an additional benefit based on length of service with the company (Anderson, 2013).

(WageIndicator, 2016)



Sales Tax

In Canada there are three types of sales tax: a federal Goods and Services Tax (GST) at a rate of 5%, a provincial sales tax (PST) which rate varies by province, and a combination of both, a Harmonised Sales Tax (HST) Commercial importers are only subject to GST. Private importers are subject to GST, PST or HST. Sales tax is calculated based on the sum of the value of the goods, the duty, and the excise duty (if applicable). The amount of sales tax due depends on the place of residence of the importer rather than on the location where the goods enter Canada.

(DutyCalculator, 2016)

Region Sales Tax NameStandard Sales Tax

Rate

Reduced Sales Tax

Rate

Popular Import Products with Reduced

RatesAlberta GST 5% 0%

Blank videotape, Swimsuits for women, Paintball marker, Foil

balloons, Aquarium led

British Columbia GST + PST 12% 0%Manitoba GST + PST 13% 0%New Brunswick HST 15% 0%Newfoundland and Labrador HST 15% 0%Northwest Territories GST 5% 0%Nova Scotia GST 5% 0%Nunavut GST 5% 0%Ontario HST 13% 0%Prince Edward Island HST 14% 0%Quebec GST + PST 14.98% 0%Saskatchewan GST + PST 10% 0%Yukon GST 5% 0%

(Rocheleau, 2014)



Arms & Related Materials Embargo Asset Freeze Import / Export RestrictionsBurma

Central African RepublicCôte d'Ivoire

Democratic Republicof Congo

EritreaIranIraq

LebanonLiberiaLibya

North KoreaSomaliaSudanSyria

Zimbabwe

BurmaCentral African Republic

Côte d'IvoireDemocratic Republic of Congo

EritreaIranIraq

LiberiaLibya

North KoreaRussiaSomaliaSudanSyria

UkraineYemen

IranLibya

North KoreaSomalia

Syria

Sanctions(Government of Canada, 2016)

An arms embargo aims to prevent weapons and military equipment from leaving or reaching a targeted country. It prohibits exporting and importing arms and related materials to and from the targeted country, and may also prohibit communicating technical data or financial transactions related to military activities. An embargo on arms and related materials also applies to Terrorist Entities under the United Nations Al-Qaida and Taliban Regulations.

An asset freeze aims to prevent an individual or entity from gaining access to property or other assets it may hold under Canadian jurisdiction. It prohibits persons in Canada from dealing in any property held by, or on behalf of, a person named in the relevant sanctions regulation. It also prohibits facilitating or providing financial services related to such a dealing. An asset freeze applies only to property owned by named individuals or entities, and is often accompanied by other financial prohibitions. Asset freeze provisions also applies to Terrorist Entities, including Al-Qaida and Taliban.

Export and import restrictions aim to hinder the economy, or specific sectors of the economy, of the targeted country. They typically prohibit buying, selling or shipping identified goods to or from the country; for example, oil and petroleum products or certain telecommunication products.Export and import restrictions can be imposed under the United Nations Act (UNA) or the Special Economic Measures Act (SEMA). Exemptions may apply to food; medical supplies; goods used for public health purposes or disaster relief; or goods required under pre-existing contracts. The specific exemptions are listed in the regulations for each set of sanctions.Export and import restrictions can also be authorised under the Export and Import Permits Act. Notably, exports to any country named in the Area Control List of this act are banned.



Financial Prohibitions Technical Assistance Prohibition Related MeasuresEritreaLibya

North KoreaRussiaSyria

UkraineYemen

Zimbabwe

BurmaCentral African Republic

Côte d'IvoireDemocratic Republic of Congo

EritreaIran

LebanonLibya

LiberiaNorth Korea

SomaliaSudanSyria

Zimbabwe

While United Nations Act and Special Economic

Measures Act are the primary laws by which Canada

prohibits dealings with foreign countries or entities,

measures authorized under other laws can add further

restrictions. Travel restrictions can be imposed under

the Immigration and Refugee Protection Act, exports

can be restricted under the Export and Imports

Permits Act, criminal measures can be applied to

terrorist entities listed under the Criminal Code, and

under the Freezing of Assets of Corrupt Foreign

Officials Act, Canada may acquiesce to a demand by

a country in turmoil to freeze the assets of certain of

its government officials or politicians.

Sanctions(Government of Canada, 2016)

Financial prohibitions can prohibit any person in the sanctioned state from conducting financial transactions with persons in Canada and Canadians abroad. Equally, they may only target specific types of financial transactions, or financial transactions with listed individuals or organizations.Financial prohibitions can be imposed under the United Nations Act (UNA) or the Special Economic Measures Act (SEMA). Exceptions may include transactions related to humanitarian aid; transactions required to move financial assets away from designated persons; financial transactions required under pre-existing contracts; and remittances between family members. Financial prohibitions also applies to Terrorist Entities under the United Nations Al-Qaida and Taliban Regulations.

Technical assistance prohibitions aim to prevent a country targeted by an arms embargo or an export ban from obtaining services and information related to the banned products. They typically prohibit providing technical data, training or other technical assistance. Prohibitions on technical assistance will usually affect dealings with all persons in the targeted country.Technical assistance prohibitions can be imposed under the United Nations Act (UNA) or the Special Economic Measures Act (SEMA). Some exemptions may be listed in the relevant sanctions regulations.

+



Trade Policies

• All import/export companies doing business in Canada are required to obtain a business number from the Canada Revenue Agency. The business number is required for Canadian import-export accounts which are needed for commercial trade (Canada Border Services Agency, 2013).

• To ease customs programs, Canada offers several trade programs for importers and exporters.

• Fee and Secure Trade (FAST) for drivers, carriers, and importers• Partners in Protection (PIP) program to enhance border and trade chain

security to streamline border processes• The Customs Self Assessment (CSA) program is designed for low-risk, pre-

approved importers, carriers, and registered drivers to speed border checkpoints

• Commercial Driver Registration Program (CDRP) offers efficient and effective clearance to low-risk goods and pre-approved importers, carriers, and commercial drivers

• The Advance Commercial Information (ACI) programs provide effective risk management of cargo entering Canada by providing CBSA with pre-arrival information to help identify health, safety, and security threats related to commercial goods before the goods arrive in Canada

• Canada has free trade agreements with 12 countries that reduce or eliminate barriers to trade such as tariffs and business practices in labor mobility, intellectual property, and investment (Opening New Markets: Trade Negotiations and Agreements, 2016).



Trade Policies

• There are 31 Foreign Investment Promotion and Protection Agreements (FIPAs) in Canada that are aimed at protecting and promoting foreign investment through legally-binding rights and obligations (Opening New Markets: Trade Negotiations and Agreements, 2016).

• There is no longer a tariff on over 200 tech-related products in Canada. Some of the consumer goods included in the agreement include different kinds of machinery, audio equipment, headphones and earphones, digital cameras and video recorders and certain types of video games and consoles among many others (Vomiero, 2016).

• Canada offers reduced or waived tariffs on goods imported from the world’s poorest countries (Opening New Markets: Trade Negotiations and Agreements, 2016).

• Canada offers duty-free access to qualified imports from a least developed country (LDC)

• Yarns and fabrics are tariff-free when supplied by a Most-Favoured-Nation (MFN)• A General Preferential Tariff (GPT) is offered for goods wholly obtained or produced

in a qualifying country• Canada has implemented mechanisms to prevent the concealment and transfer of funds

or assets used to finance terrorism. Canadian sanctions related to terrorist entities, including Al-Qaida and the Taliban aim to avoid Canadian trade with known terrorist entities (Canadian Sanctions Related to Terrorist Entities, including Al-Qaida and the Taliban, 2015).


Political-Legal Environment Observation Deck

Canada has a federal constitutional monarchy. The English monarch is vested with powers of state, but the power is shared with a representative democracy in which people express their views by electing representatives who meet and discuss policies.

Canada is relatively free from corruption when compared with many other countries.

Canada's judicial system is transparent and free from corruption. Businesses report that Canadian courts show high levels of independence and state their confidence in the efficiency of the legal system in challenging regulations and settling disputes (Business Corruption in Canada, 2016).

There is no significant risk of corruption within the Canadian police force, which has one of the highest levels of reliability in the world in relation to their capability to protect companies from crime (Business Corruption in Canada, 2016).

Corrupt activities such as money laundering and fraud are risks when interacting with Canada's land sector.

The Charbonneau Commission, a public inquiry into corruption in the construction industry, resulted in the arrest of several mayors and others. The final report revealed that corruption, organized crime, collusion, and influence peddling are widespread in Quebec's multi-billion public construction industry (Business Corruption in Canada, 2016).

(Andromina, n.d.)



Other risks related to the land administration include fraud in the construction sector in the form of bid-rigging, collusion and money laundering. Construction and real estate companies seeking to invest should take note of the GrantThornton white paper on construction fraud (Business Corruption in Canada, 2016).

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) identifies the real-estate sector to be susceptible to money laundering by foreign persons and with foreign money (Business Corruption in Canada, 2016).

Incidents of corruption sometimes occur in the Canadian tax administration but are not considered a concern by surveyed companies (Business Corruption in Canada, 2016).

Canada's customs administration does not constitute a barrier to trade and is seen as efficient and transparent. Companies identify high tariffs and complicated import procedures as the main impediments for importing goods, but few businesses point to corruption at the border as being an obstacle to trade (Business Corruption in Canada, 2016).

The Criminal Code of Canada criminalizes active and passive bribery, influence peddling, extortion and abuse of office. Bribery of foreign public officials is addressed by the Corruption of Foreign Public Officials Act (CFPOA). Companies are advised to consider the Business Anti-Corruption Portal's summary and compliance guide for the CFPOA. There is no upper limit for financial penalties imposed on businesses or persons for corruption. Facilitation payments are prohibited by CFPOA. Gifts are only allowed under the CFPOA to build a business relationship and where it is a reasonable expenditure (Business Corruption in Canada, 2016).

(Andromina, n.d.)



The transparency of Canada's regulatory system is similar to that of the United States. Proposed legislation is subject to parliamentary debate and public hearings, and regulations are issued in draft form for public comment before implementation. While federal and provincial licenses or permits may be needed to engage in economic activities, regulation of these activities is generally for statistical, or tax compliance reasons. The Bureau of Competition Policy and the Competition Tribunal, a quasi-judicial body, enforce Canada's antitrust legislation (Bureau of Economic and Business Affairs, 2015).

Establishing corporate policies and addressing issues of corruption within the organization that set an example for all employees to follow is important. Canada is allowed to prosecute the individual and the business involved in bribery.

It is important for organizations to be aware that gifts are considered bribery and could present a issue and should be a consideration when soliciting business.

Employment laws in Canada can be tricky due to the number of sets of legislation. A company considering Canada expansion should benefit from proper research and legal counsel.

Canadian workers are guaranteed more time off than American employees and businesses consider paid leave when considering the number of employees needed, and with scheduling of jobs.

Businesses importing and exporting to/from Canada should take advantage of trade programs facilitating ease in the process.

With the recent removal of tariffs on tech-related goods, there is a potential business benefit to considering relevant trade goods.

(Andromina, n.d.)

Economic Measures

Economic-Infrastructural Environment

Interest Rates(Trading Economics, 2016) 0.5% (June, 2016)

Unemployment (Central Intelligence Agency, 2016) 6.9% (2015)

Inflation (Central Intelligence Agency, 2016) 1.1% (2015)

GDP real growth rate (Central Intelligence Agency, 2016) 1.2% (2015)

Exchange Rates(Central Intelligence Agency, 2016) 1 Canadian dollar = $ 1.275 USD (2015)

Exchange Rate Regime (Parliament of Canada, 2004) Floating

GDP (Central Intelligence Agency, 2016) 1.552-trillion (2015)

Labor Force (Central Intelligence Agency, 2016) 19.3-million (2015 est.)

Major Industries (Central Intelligence Agency, 2016)

Transportation equipment, chemicals, processed and unprocessed minerals, food products, wood and paper products, fish products, petroleum, natural gas

FDI Rates(International Trade Centre, 2016) 42,999.6-million (Inflow as of 2012)

MajorTrading Partners

Exports: United States, European Union (EU), China, Japan, Mexico

Imports: United States, China, EU, Mexico, Japan

Major Imports/Exports

Exports: Agricultural products 14.3Fuels and mining 33.8Manufactures 44.7

Motor vehicles and parts, industrial machinery, aircraft, telecommunications equipment; chemicals, plastics, fertilizers; wood pulp, timber, crude petroleum, natural gas, electricity, aluminum (Central Intelligence Agency, 2016)

Imports: Agricultural products 8.7Fuels and mining 13.1 Manufactures 74.4

Machinery and equipment, motor vehicles and parts, crude oil, chemicals, electricity, durable consumer products (Central Intelligence Agency, 2016)

RegionalTrade Agreements

and Member Countries

Canada - Chile, Canada – Columbia, Canada – Costa Rica, Canada – Honduras, Canada – Israel, Canada – Jordan, Canada – Panama, Canada – Peru, Canada – Rep. of Korea, EFTA (Iceland, Liechtenstein, Norway, Switzerland) – Canada, North American Free Trade Agreement (NAFTA) (Canada, Mexico, United States)

Trade

(World Trade Organization, 2016)

Major Ports, Airports, and Railways – Canada

Economic-Infrastructural Environment

Major Seaports (Nationsonline.org, 2016) Argentina, Halifax, Liverpool, Montreal, Pictou, Port Hawkesbury, Prince Rupert, Québec, Saint Joh, Sidney, Sydney, Vancouver, Victoria

Major Airports(Nationsonline.org, 2016)

Calgary International Airport, Pierre Elliott Trudeau International Airport, Ottaway Macdonald-Cartier International Airport, Québec City Airport, Jean Lesage International Airport, Lester B. Pearson International Airport, Vancouver International Airport.

Railway Stations (Seat61.com, 2016) Illustration above, colored lines

Internet Users(Central Intelligence Agency, 2016) 32.4-million (2014)

Mobile Providers(txtNation, 2016)

Rogers Wireless (Rogers Communications), Fido Solutions (Rogers Communications), Bell Mobility (Bell Canada), Telus Mobility (Telus), SaskTel Mobility

(SaskTel), MTS Mobility (MTS), ICE Wireless, Télébec Mobilité, DMTS Mobility, WIND Mobile

Logistics Performance Index Rating(The World Bank, 2016) 14

(Via Rail Canada, n.d.)

Major Ports, Airports, and Railways - Canada


Economic-Infrastructural Environment Observation Deck

Canada’s LPI rating of 14 indicates reliability and shipments were very reliable. The overall infrastructure and logistics support Canada’s frequent shipments and trade (The World Bank, 2016).

Canada continues to work on foreign investment, and unemployment and inflation rates are low. The exchange rate remains appealing for imports from Canada (Parliament of Canada, 2004).

In 2014, Canada exported $448B, making it the 11th largest exporter in the world. During the years of 2009-2014, Canadian exports increased at an annualized rate of 8.4%, from $298B in 2009 to $448B in 2014. The most recent exports are led by crude petroleum which represents 19.4% of the total exports of Canada, followed by cars, which account for 10.1% (OEC, 2014).

The top export destinations of Canada in 2014 were the United States ($331B), China ($18B), the United Kingdom ($10.6B), Japan ($10.2B), and Mexico ($7.81B). The top import origins of 2014 were the United Sates ($241B), China ($50.6B), Mexico ($24.5B), Germany ($13.5B), and Japan ($11.7B) (OEC, 2014).

The 2014 economy of Canada had an Economic Complexity Index (ECI) of 1.2 making it the 23rd most complex country. In 2014 Canada exported 248 types of products with a revealed comparative advantage (meaning that its share of global exports was larger than what would be expected from the size of its export economy and the size of the product’s global market) (OEC, 2014).


Economic-Infrastructural Environment Observation Deck

Proximity seems to influence the determination of Canada’s most important trade partner for both imports and exports, the United States. Canada enjoys a substantial trade surplus with the US, which absorbs about three-fourths of Canadian merchandise exports each year. Canada is the US's largest foreign supplier of energy, including oil, gas, and electric power, and a top source of US uranium imports (World Trade Organization, 2016).

Electricity is both an imported and exported good in Canada. Canada is one of the few developed nations that are a net exporter of energy which accounts for 16 percent of total exports (Trading Economics, 2016).

Canada’s major trade partners are the same for both imports and exports and include the EU. According to an article on Canada.com by The Associated Press, “Canada’s international trade minister says that Britain has assured Canada it will push for speedy ratification of a new deal with the European Union, despite its intention to leave the 28-country bloc” (Associated Press, 2016). Canada’s trade negations with the EU began several years ago and with Britain’s support for a swift vote before their exit the trade agreement could be in force by early next year (Erlanger, 2016). Because Canada has worked so diligently on the contract negotiations for a British trade agreement should be stalled to mitigate offense to the EU. Additionally, this transitional situation creates a goodwill gesture by Britain that may be useful in their separate negotiation. Furthermore, Britain’s decision to leave the EU not only opens the opportunity for the separate Canada-Britain trade agreement but also creates an additional border to cross with trade goods (Erlanger, 2016).

Market Entry Strategies

Final Recommendations

(Government of Canada - Business Services, 2016)

Canada is a global leader in business service verticals. Foreign investors have established operations in human resources management, customer relations management, knowledge process outsourcing, data mining, application development, project management, business continuity and disaster planning support. The business services sector is a large part of the Canadian economy.

Foreign investors can expect deep supply chains and infrastructure to support their objectives.

Professional, scientific and technical services, which is a sub-component of business services, contributed $83.5 billion to Canadian GDP and employed 820,307 Canadians in 2013.

Risks of doing business in Canada are considered minimal, but common risks for businesses, such as marketing environment, political, and economic risks should always be considered.

Due to the amount of local and legal expertise required to set up a business in Canada, the acquisition of a strategic consulting partner is strongly advised.

Recommended options for market entry strategies in Canada for a company that focuses on business services include turnkey operations, franchises, and joint ventures. By acquiring business already established in Canada, or with Canadian support, a significant amount of costs are avoided.

(Government of Canada - Business Services, 2016)

…There’s high confidence right now; the economy is doing well and lots of investment is being made; this consistency shows that businesses really can rely on Canada…

Natan Aronshtam, Global Managing Director, Research & Development and Government Incentives,Deloitte & Touche


Canadians have strong regional traits. It is important to understand the differences between regions before conducting business based on broad Canadian preferences. Managers should realize that intercultural adaptability is essential and should consider the region employees hail from to provide better communication style, and future oversight or motivation.

Canadians from the Atlantic Provinces may exhibit old fashioned tendencies and are reserved and provincial.

Because Ontario is the business hub of Canada, its natives tend to be conservative in nature and business-like.

People who hail from Western Canada are open, friendly and relaxed.

Citizens from British Columbia will be less conventional, and those from the French region of Quebec are extremely independent.

Workers from the North region of Canada exhibit a strong pioneer spirit.

It is important to treat people with equal respect and deference when conducting business with Canadians. Canadians sense that all levels of employees within an organization are important, and are valued for their contribution. Class barriers are not present in Canadian organizations, but leaders will be deferred to as the final authority in decisions made.

Canada is a controlled-time culture that adheres to schedules. Missing a deadline signals inefficiency and poor management and will create a loss of confidence. Managers should be conservative when scheduling delivery of goods and keep a larger inventory on-hand.

Cultural Awareness

Final Recommendations

(WriteOpinions.com, 2011)

Andromina. (n.d.). 401058901 [Canada Colored Icons]. Retrieved from http://www.shutterstock.com/pic.mhtml?

id=401058901&src=id

Anderson, S. (2013, May 24). Ten interesting facts about Canadian employment law. Retrieved from

http://www.xperthr.co.uk/blogs/employment-

intelligence/2013/05/ten-interesting-facts-about-ca/

Bureau of Economic and Business Affairs. (2015, May). 2015 Investment Climate Statement - Canada. Retrieved from

http://www.state.gov/e/eb/rls/othr/ics/2015/241511.htm

Business Corruption in Canada. (2016). Retrieved from http://www.business-anti-corruption.com/country-profiles/the-

americas/canada/show-all.aspx

Canada Border Services Agency. (2013, November 18). Frequently Asked Questions. Retrieved from http://www.cbsa-

asfc.gc.ca/help-aide/faq1-eng.html

Canada Literacy. (n.d.). Retrieved from http://www.indexmundi.com/canada/literacy.html

Canada Orthographic Projection. (n.d.). Retrieved from

https://en.wikipedia.org/wiki/File:Canada_(orthographic_projection).svg

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