7 Reasons to Import from Canada: A Guide for Businesses
Canada is one of the largest and most diverse economies in the world, with a strong reputation for quality, innovation, and reliability. If you are looking for new opportunities to grow your business, importing from Canada can offer you many benefits. Here are seven reasons why you should consider importing from Canada.
1. Access to a large and stable market
Canada is the second-largest country in the world by land area, and has a population of about 38 million people. It is also one of the wealthiest countries in the world, with a GDP of over $1.7 trillion USD in 2020. Canada is a major trading partner for many countries, especially the United States, which accounts for about 75% of its exports and imports. By importing from Canada, you can tap into a large and stable market that has a high demand for goods and services.
2. Benefit from a favorable exchange rate
The Canadian dollar (CAD) is usually lower than the US dollar (USD) and other major currencies, which means that you can get more value for your money when importing from Canada. For example, as of August 25, 2021, one USD was worth about 1.26 CAD, while one EUR was worth about 1.48 CAD. This can give you a competitive edge in your local market, as you can offer lower prices or higher quality products than your competitors.
3. Enjoy free trade agreements and preferential tariffs
Canada has signed free trade agreements (FTAs) with many countries and regions around the world, such as the United States-Mexico-Canada Agreement (USMCA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Comprehensive Economic and Trade Agreement (CETA) with the European Union. These FTAs reduce or eliminate tariffs and non-tariff barriers on goods and services traded between the parties, making it easier and cheaper to import from Canada. Depending on your country of origin and destination, you may also benefit from preferential tariffs under the Generalized System of Preferences (GSP) or other schemes that grant duty-free or reduced-duty access to certain developing countries.
4. Take advantage of high-quality standards and regulations
Canada has a reputation for producing high-quality goods and services that meet or exceed international standards and regulations. Canada has strict laws and regulations on consumer protection, product safety, environmental protection, labor rights, intellectual property rights, and more. By importing from Canada, you can ensure that you are getting products that are safe, reliable, and compliant with your local requirements.
5. Leverage Canada’s innovation and expertise
Canada is a leader in many fields of innovation and expertise, such as artificial intelligence, biotechnology, clean technology, aerospace, agriculture, natural resources, and more. Canada invests heavily in research and development (R&D), ranking among the top 10 countries in the world in terms of R&D spending as a percentage of GDP. Canada also has a highly skilled and educated workforce, with over half of its population having a post-secondary degree or diploma. By importing from Canada, you can access cutting-edge technology and know-how that can help you improve your products or processes.
6. Diversify your supply chain and reduce risks
Importing from Canada can help you diversify your supply chain and reduce your dependence on a single source or market. This can help you mitigate risks such as supply disruptions, price fluctuations, political instability, natural disasters, or trade disputes that may affect your current suppliers or markets. By having multiple sources of supply, you can increase your flexibility and resilience in the face of uncertainty and change.
7. Build long-term relationships and trust
Importing from Canada can also help you build long-term relationships and trust with your Canadian suppliers and partners. Canadians are known for being friendly, polite, honest, and respectful in their business dealings. They value transparency, fairness, cooperation, and mutual benefit. By importing from Canada, you can establish a solid foundation for future collaboration and growth.
Importing from Canada can be a smart move for your business. By importing from Canada, you can access a large and stable market, benefit from a favorable exchange rate, enjoy free trade agreements and preferential tariffs, take advantage of high-quality standards and regulations, leverage Canada’s innovation and expertise, diversify your supply chain and reduce risks, and build long-term relationships and trust.
The Rise of Importing from Canada
Canada is one of the world’s largest trading nations, with a total merchandise trade value of over $1 trillion in 2020. Canada imports mainly consumer goods, vehicles, energy products, and machinery from its trading partners, especially the United States, China, Mexico, and Germany. In this blog post, we will explore some of the trends and statistics of importing from Canada, and how they reflect the global demand for Canadian products and services.
Consumer Goods: A Growing Market
Consumer goods are products that are intended for personal or household use, such as clothing, footwear, furniture, toys, cosmetics, and food. According to Canada import data, consumer goods accounted for 19% of total imports in 2020, making it the largest import category. Consumer goods imports increased by 4.6% from 2019 to 2020, reaching a value of $77 billion.
One of the main drivers of consumer goods imports is the e-commerce sector, which has boomed during the COVID-19 pandemic. Online shopping has increased the demand for imported products from various countries, especially China, which is the largest source of consumer goods imports for Canada. According to Trade Data Online, China accounted for 37% of consumer goods imports in 2020, followed by the United States (23%), Vietnam (4%), and Bangladesh (3%).
Another factor that influences consumer goods imports is the exchange rate. A strong Canadian dollar makes imported products cheaper and more attractive for Canadian consumers. According to Trading Economics, the Canadian dollar appreciated by 3.4% against the US dollar in 2020, reaching an average of 1.34 CAD per USD. This may have contributed to the increase in consumer goods imports from the United States and other countries.
Vehicles: A Key Industry
Vehicles are products that are used for transportation, such as cars, trucks, buses, motorcycles, bicycles, and parts thereof. According to Canada import data, vehicles accounted for 13.8% of total imports in 2020, making it the second-largest import category. Vehicles imports decreased by 20.5% from 2019 to 2020, reaching a value of $56 billion.
One of the main reasons for the decline in vehicles imports is the disruption caused by the COVID-19 pandemic. The pandemic affected both the supply and demand sides of the vehicles industry, as factories were shut down or operated at reduced capacity, and consumers postponed or canceled their purchases due to lockdowns and economic uncertainty. According to Export Genius, vehicles imports dropped by 47% in April 2020 compared to April 2019, reaching the lowest level since 2009.
Another factor that affects vehicles imports is the trade policy. Canada is a member of several free trade agreements that facilitate the trade of vehicles and parts with its partners, such as the United States-Mexico-Canada Agreement (USMCA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Comprehensive Economic and Trade Agreement (CETA) with the European Union. These agreements reduce or eliminate tariffs and non-tariff barriers on vehicles trade, making it more competitive and efficient.
Energy Products: A Volatile Sector
Energy products are products that are used for generating or consuming energy, such as crude oil, natural gas, coal, electricity, refined petroleum products, and renewable energy sources. According to Canada import data, energy products accounted for 4.9% of total imports in 2020, making it the fourth-largest import category. Energy products imports decreased by 41.7% from 2019 to 2020, reaching a value of $20 billion.
One of the main causes of the decrease in energy products imports is the collapse of oil prices in 2020. The COVID-19 pandemic reduced the global demand for oil and gas, while a price war between Saudi Arabia and Russia increased the supply. As a result, oil prices plummeted by more than 60% in March 2020 compared to January 2020, reaching a historic low of -$37 per barrel in April 2020. This made oil imports less profitable and viable for Canada.
Another factor that influences energy products imports is the domestic production and consumption. Canada is one of the world’s largest producers and exporters of oil and gas, mainly from its oil sands in Alberta. However, Canada also imports oil and gas from other countries to meet its domestic demand in different regions. For example, according to Statistique Canada , Canada imported $8 billion worth of crude oil from Saudi Arabia in 2020 to supply its refineries in Eastern Canada.
Importing from Canada is a dynamic and diverse sector that reflects the global demand for Canadian products and services. Consumer goods are the largest and fastest-growing import category, driven by e-commerce and exchange rate. Vehicles are the second-largest import category, but they declined significantly due to the COVID-19 pandemic and trade policy. Energy products are the fourth-largest import category, but they also decreased sharply due to the oil price collapse and domestic production and consumption.
References:
http://www.cbsa-asfc.gc.ca/publications/pub/bsf5056-eng.html#s5x4
http://www.cbsa-asfc.gc.ca/publications/pub/bsf5056-eng.html#s5x1
https://www.cdnbeefcheckoff.ca/about-us/
https://www.exportgenius.in/export-import-trade-data/canada-import.php
https://tradingeconomics.com/canada/imports
https://www.statcan.gc.ca/en/subjects-start/international_trade
https://ised-isde.canada.ca/site/trade-data-online/en
https://www.tradecommissioner.gc.ca/
https://www.international.gc.ca/country-pays/index.aspx?lang=eng
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