International Trade

A guide to trading with Canada

6 min read

19 February 2013

Canada presents a lot of opportunities. Consider taking them, and you might boost your business growth significantly.

If you’ve seen the recent film adaptation of Life of Pi, you’ll remember that the central characters see Canada as a land of hope and opportunity, and are prepared to sail to the other side of the world to start a new life there. In reality, the country presents a handful of exciting trading opportunities to British businesses.

Canada is the second largest country in the world, and a growing trading power. Its imports and exports now make up two-thirds of the country’s GDP, and the UK is a key part of this trading landscape. Britain is Canada’s second largest, direct, foreign investor after the US, as well as its primary European trading partner. Conversely, Canada is the UK’s third largest export market outside Europe, the US and China. The UK and Canada are broadly similar in language, law and politics, and share deep cultural and historical ties that now help to facilitate trade between the two countries.

Canada also has strong trade agreements with Costa Rica, Chile, Mexico and other countries that participate in the World Trade Organisation, as well as other global trading agreements. It is one of the world’s richest and most developed countries, ranking among the top ten industrial powers, with one of the highest standards of living in the world.

Here’s are a few things to consider:

1. Ease of trade

Canada is politically stable and has a highly developed economy, including a sophisticated system for its imports and exports. All of these factors attract UK businesses seeking an uncomplicated trading relationship. In fact, Canada ranks seventh in the world for ease of doing business, according to the World Bank’s ‘Doing Business In’ project. The project provides objective measures of business regulations and their enforcement across 181 economies and selected cities.

2. Trading opportunities

UK businesses will find a diverse range of trading opportunities in Canada. The country’s primary natural resources include petroleum, natural gas, metals and minerals, fish, forests, wildlife, and an abundance of fresh water. Meanwhile, major UK imports to Canada currently include machinery, equipment, automotive, crude oil, chemicals, electricity and durable consumer goods. Exporters may like to focus on one or two key cities where the hub of that industry is focused. For example, many exporters target Toronto as it presents a large consumer goods market.

There are direct flights from British airports to the Canadian gateways of Calgary, Edmonton, Halifax, Montreal, Ottawa, St Johns, Toronto and Vancouver. In addition, the same airports can be reached via the US hubs of New York, Chicago and San Francisco.

3. Challenges

Canada is a relatively straightforward market to work in and Canadians are famously relaxed and approachable. However, the importance of relationship building should not be underestimated. Businesses should bear in mind that although there are fewer economic and cultural barriers in Canada than other countries, there are, nonetheless, important business and social differences comparable between the UK and USA. For example, different Canadian provinces have different cultures and separate import regulations. Around a quarter of Canada’s population is of French-Canadian descent, which means it is officially bi-lingual. French-Canadian is a requirement for doing business in Quebec in terms of labelling most of the products there.

4. Quirky customs

All meat and meat by-products from the UK are banned from entry into Canada. Dairy products are subject to an import quota system (between the EU and Canada). Alcoholic beverages are purchased and sold through the Canadian Provincial Governments, with the exception of Alberta.

Most imports to Canada require a Canadian customs invoice, with additional information required for textiles. Unusual import prohibitions to Canada include used or second-hand mattresses and all collectable coins and stamps. Textiles and wool and fur products are also restricted, as well as electronic products, motor vehicles and boats.

5. Seeking help and advice

Exploiting the opportunities that international trade offers is exciting, but it is also a more complex process than trading within the UK. You will be dealing with customs, other government authorities, banks, insurers, export/import service providers and international carriers. You will need to familiarise yourself with how trade is conducted in other countries with different business practices, cultures, customs and currencies. Visit www.dhlguide.co.uk for more information and advice about trading with this exciting territory.

Neil Kuschel is head of sales at DHL Express UK.