While the coronavirus pandemic has been a difficult time for everyone in terms of safeguarding our health and learning to live with restricted social freedoms, it has undoubtedly afforded us an opportunity to revolutionise the way we work.
As the largest trading partner with the US and a nation ranking 22nd in the World Bank’s 2019 ease of doing business index, Canada is an attractive market for companies looking to invest overseas.
However, while doing business in Canada is relatively straight forward, your firm may still encounter a few hiccups if you’re not thoroughly prepared.
To help you on your way we’ve created a shortlist of four of the most important things to know before doing business in Canada.
Canada is not a carbon copy of the US
While there are certainly a lot of similarities between the US and Canada, many companies make the mistake of treating the Canadian market as though it is basically an extension of the US, quite a short sighted approach.
For instance one of the most glaring differences between the two is that Canada has two official languages, English and French, and while mainstream use of the latter may be largely confined to the Province of Quebec, both languages must be represented on all product labels, manuals and other materials.
Furthermore Canada (unlike the US) has followed many other countries in adopting the metric system, which can prove to be another barrier when seeking to simply replicate existing US operations in Canada.
Additionally, there are a whole host of other regulatory and cultural differences that further differentiate the US and Canadian markets.
With this in mind it’s important to tailor your approach specifically to Canada rather than attempting to take a few shortcuts to save a bit of time.
Reading up on USMCA
For decades, trade between the US, Canada and Mexico has been served by the North American Free Trade Agreement (NAFTA).
However after a two-year renegotiation period, in 2018 NAFTA was replaced by the new US–Mexico–Canada Agreement (USMCA) and once ratified by each participating country it could have an impact on a wide range of businesses operating in Canada.
The sectors likely to see the greatest impact are Canada’s automotive, pharmaceutical and agricultural industries, but the USMCA’s revised intellectual property laws are likely to be felt by the entire private sector.
Given the potential disruption that may be caused by USMCA it’s advisable for businesses seeking to invest in Canada to thoroughly research how the new agreement may impact their sector, or potentially even wait for the dust to settle in order to avoid having to also comply with NAFTA before USMCA is ratified.
Canada puts significant value in fairness, equality and inclusiveness and this is reflected in Canadian business culture, where a lot of importance is attached to ensuring everyone has a voice, regardless of their position.
While this is probably the single most important aspect of business culture in Canada, there are some other differences that should be adhered to if you wish to forge lasting business relationships in Canada.
As previously mentioned, Canada is a bilingual country so your business card should include both English and French translations and you should also be prepared to hold meetings in both languages. Hiring an interpreter may be advisable if your school French is a little rusty!
Outside of the potential language barrier, you will likely find that there is no need to decipher some deeper meaning when communicating with businesses in Canada, with Canadian’s generally preferring to get straight to the point.
In terms of your appearance, a conservative dress code is advised, but also ensure that you dress according to the weather. Failing to account for the country’s colder climate is unlikely to earn much sympathy from potential Canadian business partners!
Canada is world’s second-largest country by total area, but despite this the nation is only home to roughly 36 million people, that’s less than the state of California!
Because of this, Canada’s population density (at 9.6 per square mile) is one of the lowest in the world, with the majority of the population focused within Canada’s major urban centres that are spread throughout the country.
This can lead to Canada posing something of a logistical challenge to some businesses, with companies potentially facing increased costs in having to account for the organisation of economics of scale.
However, at the same time Canada’s substantial landmass offers a few unique opportunities to some businesses, with the country’s abundance of raw materials potentially able to lower input costs by avoiding costly import/export fees.
With its solid infrastructure, low corporate tax and close trade relationship with the US and Europe, Canada is an ideal starting point for any business seeking to test the waters when expanding overseas.
So long as you remember to limit the comparisons between Canada and the US, you should find that the country offers an inviting and open overseas market in which to expand your business.