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U.S. Department of State
Canada Country Commercial Guide
Office of the Coordinator for Business Affairs
COUNTRY COMMERCIAL GUIDE
FCS CANADA
FY96
This Country Commercial Guide (CCG) presents a comprehensive look at
Canada's commercial environment through economic, political and market
analyses.
The CCGs were established by recommendation of the Trade Promotion
Coordinating Committee (TPCC), a multi-agency task force, to consolidate
various reporting documents prepared for the U.S. business community.
CCGs are prepared annually at U.S. Embassies through the combined
efforts of several U.S. Government agencies.
TABLE OF CONTENTS
Chapter I. Executive Summary
Chapter II. Economic Trends and Outlook
A. Major Trends and Outlook
B. Principal Growth Sectors
C. Government Role in the Economy
D. Balance of Payments Situation
E. Infrastructure Situation
1. Transportation
2. Telecommunications Infrastructure
Chapter III. Political Environment
A. Nature of Political Relationship with the United States
B. Major Political Issues Affecting Business Climate
C. Political System
Chapter IV. Marketing U.S. Products and Services
A. Distribution and Sales Channels
B. Use of Agents and Distributors; Finding a Partner
C. Franchising
D. Direct Marketing
E. Joint-Ventures/Licensing
F. Steps to Establishing an Office in Canada
G. Selling Factors/Techniques
H. Advertising and Trade Promotion
I. Pricing Product
J. Sales Service/Customer Support
K. Selling to the Government
L. Protecting Your Product from IPR Infringement
M. Need for a Local Attorney
Chapter V. Leading Sectors for U.S. Exports and Investment
A. Best Prospects for Non-Agricultural Goods and Services
B. Best Prospects for Food/Agricultural Products
Chapter VI. Trade Regulations and Standards
A. Trade Barriers
B. Customs Valuation
C. Import Licenses
D. Export Controls
E. Import/Export Documentation
F. Temporary Entry
G. Labelling, Marking Requirements
H. Prohibited Imports
I. Standards
J. Free Trade Zones/Warehouses
K. Special Import Provisions
L. Membership in Free Trade Arrangements
Chapter VII. Investment Climate
A. Openness to Foreign Investment
B. Conversion and Transfer Policies
C. Expropriation and Compensation
D. Dispute Settlement
E. Political Violence
F. Performance Requirements/Incentives
G. Right to Private Ownership and Establishment
H. Protection of Property Rights
I. Regulatory System: Laws and Procedures
J. Bilateral Investment Agreements
K. OPIC and Other Investment Insurance Programs
L. Labor
M. Foreign Trade Zones/Free Ports
N. Capital Outflow Policy
O. Major Foreign Investors
Chapter VIII. Trade and Project Financing
A. Canadian Banking System
B. Foreign Exchange Controls Affecting Trading
C. General Financing Availability
D. Financing Exports/Methods of Payment
E. Export Financing and Insurance
F. Project Financing
G. List of Canadian Banks with Correspondent U.S. Banking
Arrangements
Chapter IX. Business Travel
A. Business Customs
B. Travel Advisory and Visas
C. Holidays
D. Business Infrastructure
Chapter X. Appendices
Appendix A. Country Data
Appendix B. Domestic Economy
Appendix C. Trade
Appendix D. Investment Statistics
Appendix E. U.S. and Country Contacts
Appendix F. Market Research
Appendix G. Trade Event Schedule
CHAPTER I. EXECUTIVE SUMMARY
The U.S.-Canada trading relationship is the largest in the world, with
well over US$300 billion in two-way trade taking place each year. U.S.
merchandise exports account for approximately 70 percent of the Canadian
import market, and the United States remains by far Canada's largest
export market. Despite a recent softening of the Canadian economy, the
Canadian import market, already the most favorable for U.S. goods and
services of any in the world, should see annual growth of about 5
percent in real terms through FY96. Since the implementation of the
North American Free Trade Agreement (NAFTA) in 1994, U.S exports to
Canada have increased by over 30 percent. Despite some well publicized
trade disputes, overall market conditions are unlikely to experience any
significant changes, and U.S. companies will continue to find Canada an
extremely attractive and easily accessible place to do business.
With a population of about one tenth of that of the United States, the
Canadian economy mirrors that of the United States in approximately the
same ratio, and has developed in many ways along similar lines. This
has made Canada an ideal export and investment destination for many U.S.
companies, who have found an environment and marketplace very similar to
that of the domestic United States. It also offers an ideal first stop
for U.S. businesses seeking to begin export marketing, with business
practices, attitudes, conditions and environments here more similar to
those found in the United States than any other country in the world.
Notwithstanding these similarities, however, significant cultural and
linguistic differences, which vary across each of Canada's four
distinctive regional markets, allow first-time U.S. exporters to develop
an appreciation of the complexities of overseas marketing. Experience
gained here can provide as solid basis for success in markets worldwide.
Business opportunities in Canada fall within the full spectrum of
industry sectors, and in virtually every business activity. More
specifically, however, the five top best prospects sectors for U.S.
products over the next 12 months include: computer software; computers
and peripherals; telecommunications equipment; pollution control
equipment; and, automotive aftermarket parts. Geographic proximity,
cultural and historical ties, and strong awareness of business and other
developments in the United States, are key accelerators for the sale of
U.S. goods and services in the Canadian market. Third-country
competition tends to be far less prevalent in Canada than in most other
international markets. Third-country competition is most often found in
product areas where labor constitutes a significant part of the cost
production, and where domestic U.S. industries are less competitive. In
other sectors however, U.S. dominance remains almost a fact of life, and
third-country competition is most prevalent in specific cases rather
than across the board.
Generally, Canadians have strong national pride, and will often favor
Canadian products, especially if they offer similar features at a
similar cost to those from the United States. This is especially true
for any government procurement, local or federal, not covered under
either World Trade Organization (WTO) or NAFTA rules. Nevertheless,
competition in Canada is generally fair, and as noted above, U.S. firms
that can offer technical, cost or feature advantages over locally
produced goods, can do as well in the Canadian market as they can in the
domestic U.S. market.
For additional information on the Canadian market contact the U.S.
Department of Commerce District Office serving your area or the Foreign
Commercial Service of the U.S. Embassy in Ottawa Canada. Country
Commercial Guides (CCGs) are available on the National Trade Data Bank
on CD-ROM or through the Internet. Please contact STAT-USA at 1-800-
STAT-USA for more information. To locate CCGs via the Internet, please
use the following World Wide Web address: WWW.STAT-USA.GOV. CCGs can
also be ordered in hard copy or on diskette from the National Technical
Information Service (NTIS) at 1-800-553-NTIS.
CHAPTER II. ECONOMIC TRENDS AND OUTLOOK
A. Major Trends and Outlook
The Canadian economy grew by 4.6 percent in 1994, the best performance
in six years. Growth was fueled by exports, which reaped the benefits
of a lower C$ and a strong U.S. economy; investment, most notably in
machinery and equipment, and consumer spending, which recorded its
largest growth since 1989. However, the acceleration in the Canadian
economy through the second half of 1994 began to taper off in 1995.
Tighter monetary policy in the United States to stop potential
inflationary pressures spilled into Canada. This, combined with fiscal
and political uncertainties, caused the Canadian dollar to depreciate
and Canadian interest rates to rise. A slowdown in the U.S. economy,
evident in the first quarter of 1995, caused Canadian export growth to
slow substantially, and rising interest rates put a damper on investment
and consumer spending. Consumer confidence was also eroded by
employment insecurities as massive layoffs in the public and private
sector were announced. This, combined with debt overhang and ongoing
wage freezes, was enough for Canadians to stop spending their savings
and retrench. The general forecast consensus is calling for 3.5 percent
real GDP growth in 1995, easing to under three percent in 1996.
The national unemployment rate is forecast to remain in the mid to upper
nine percent range. Employment gains are expected to be flat given
private and public sector downsizing, slower export growth, weaker
corporate profits, and flat to negative investment in residential and
non-residential construction. Inflation has been rising but is still
expected to remain in the Bank of Canada's target range of between one
and three percent. The increase in consumer price inflation has been
attributed to a weaker C$ forcing up the price of imported goods; a
surge in food prices due to weather conditions in the United States;
higher gasoline prices because of a federal tax increase, and the end of
the dampening effect major reductions in tobacco taxes and a drop in
Quebec's provincial sales tax had on the CPI since early 1994. From 0.2
percent in May 1994, the national inflation rate rose to 2.9 percent in
May 1995.
On the fiscal side, the federal and most of the provincial governments
remain committed to deficit reduction. Only Quebec, which faces a
sovereignty/separation referendum in the fall, calls for an increase in
spending. In addition, the Quebec government says it will raise taxes
if the electorate votes against sovereignty. In Ontario, Canada's
largest province, the electorate voted the Tories into power on June 8,
1995. Some policy analysts have opined that the new government, led by
Mike Harris with a conservative agenda stressing a balanced budget and
less government, will have a significant impact at both the federal and
provincial level. In particular, they believe that harmonization of the
federal Goods and Services Tax (GST) with provincial taxes, a federal
Liberal party campaign promise as yet to be fulfilled, will become a
reality since Harris' support of harmonization has signaled other
provinces to come on board.
B. Principal Growth Sectors
The weaker North American economy precludes the strong growth pattern
observed in the last few years in several sectors. Nevertheless, some
growth should be realized in non-energy machinery and equipment
investment due to ongoing upgrading of Canadian manufacturing plants and
equipment. Services are expected to continue to grow in relative terms,
with particular emphasis on tourism and transportation and storage.
C. Government Role in the Economy
Canada is the world's seventh-largest market economy. Production and
services are predominantly privately owned and operated. However, the
federal and provincial governments are significantly involved in the
economy. They provide a broad regulatory framework and engage in
considerable redistribution of wealth from high income individuals and
regions to lower income persons and provinces. Federal government
economic policies since the mid-1980s have emphasized the reduction of
public sector interference in the economy and the promotion of private
sector initiative and competition. Both federal and provincial
governments also privatized selected crown corporations. Nevertheless,
federal government regulatory regimes affect foreign investment and also
U.S. firms in the financial services sector.
D. Balance of Payments Situation
Canada typically runs a large current account deficit even though its
merchandise trade is in surplus. As a traditional importer of services
(especially tourism), Canada also hosts a very large amount of foreign
investment on which dividends are paid, and has had to service a large
foreign debt. In 1994, Canada's current account deficit was C$22.3
billion, and C$15.8 billion at a seasonally adjusted annual rate in the
first quarter of 1995. At the same time, Canada's global merchandise
trade surplus was C$15 billion in 1994 and C$23.2 billion at a
seasonally adjusted annual rate in the first quarter of 1995.
The bulk of Canada's current account transactions is with the United
States. Canada traditionally records a merchandise trade surplus with
the United States, but generally has an offsetting non-merchandise trade
deficit. Canada's bilateral investment income account, which is
composed of interest and dividends, holds the single largest deficit
within the non-merchandise trade component. Canada's large and growing
external debt, much of which is held by U.S. residents, gives rise to an
outward flow of debt service (interest) payments. At the same time,
there is a large amount of U.S. foreign direct investment in Canada that
results in high dividend payments by Canadian subsidiaries to their U.S.
parents.
E. Infrastructure Situation
1. Transportation
Canada's transportation systems are highly developed. Canada's most
important means of transportation for freight and bulk goods is its
railways; however, long distance trucks now carry a substantial share of
all merchandise.
(a) Railways
Railways are Canada's principal means of transport. The two great
transcontinental systems, the Canadian National Railway and the Canadian
Pacific Railway Company, provide most of the rail transportation. Both
systems have extensive supplementary facilities for highway and waterway
transport, telecommunications, and storage. Regional lines supplement
the transcontinental lines.
(b) Motor Freight
Aided by an expanding network of paved highways and deregulation, truck
transport is generally competitive with rail transport. The provinces
have jurisdiction over highways in Canada. Common carriers are required
to obtain a license from the Department of Highways and Transport of the
province in which travel occurs.
In January 1988, the Motor Vehicle Transport Act went into effect,
easing entry into the Canadian market for U.S. firms. Truckers who wish
to cross provincial and international borders no longer must prove that
their service is consistent with public convenience and necessity.
Until 1993, existing trucking companies could block new entrants.
Beginning in 1993, new firms may enter the market or existing firms may
expand if they are fit, willing, able, and meet basic insurance and
safety requirements.
U.S. firms may ship goods of their own manufacture to destinations in
Canada in their own trucks. However, they may not carry other goods,
back haul to the United States, or act in any way as a common carrier.
However, some states have reciprocal arrangements with some Canadian
provinces to do so.
To determine what arrangements are in effect, contact the local office
of the U.S. Interstate Commerce Commission (ICC) or the appropriate
Canadian provincial department or ministry of transportation. Where no
arrangement is in effect, the trucker will be required to purchase a one
trip license at the first weigh station after crossing the border.
(c) Water Transport
Although seasonally restricted by frozen waterways, water transport is
widely used as a consequence of Canada's unique geographical position.
Canada is bordered by the Atlantic and the Pacific Oceans. The St.
Lawrence Seaway extends inward for more than 2,000 miles along its
southern border. U.S. firms carry about 25 percent of all Canadian
water transported exports and about half of its water transported
imports.
Canada has 25 large deep-water ports and about 650 smaller ports and
multipurpose government wharves on the east and west coasts, along the
St. Lawrence Seaway and Great Lakes, in the Arctic, and on inland lakes
and rivers. Transport Canada is responsible for planning and providing
adequate public port facilities.
The leading Canadian ports listed in approximate order of tons of cargo
loaded and unloaded are: Vancouver, British Columbia; Sept-les-Pointe-
Noire, Quebec; Montreal, Quebec; Port Cartier, Quebec; Thunder Bay,
Ontario; Halifax, Nova Scotia; Saint John, New Brunswick; Quebec City,
Quebec; Prince Rupert, British Columbia; and Hamilton, Ontario.
Container traffic can be handled at a number of these ports, including
Montreal, Halifax, St. John, and Vancouver.
(d) Aviation
Air connections between the United States and Canada are extensive, with
well-developed facilities for freight and passenger traffic. Air
transport on U.S. carriers from the United States and Canada is provided
by several companies. Domestic service is offered by a number of
airlines.
On February 24, 1995 a new bilateral Air Transport Agreement was signed
with Canada. The new accord immediately eliminated most restrictions on
air service between the two countries and will virtually deregulate the
transborder market over the next three years. While the Agreement gives
Canadian airlines a head start at Toronto, Montreal and Vancouver of up
to three years to put the Canadian airline industry in a better position
to meet the full force of U.S. airline competition, major new
opportunities are granted U.S. carriers during this phase-in period.
After the three-year phase-in period, any U.S. or Canadian airline can
serve any cross-border route.
Under a bilateral agreement signed in 1974, U.S. inspection agencies
(Customs and INS) operate preclearance facilities at six airports in
Canada (Toronto, Vancouver, Montreal, Calgary, Edmonton and Winnipeg).
2. Telecommunications Infrastructure
Communications are highly sophisticated in Canada, comparable with those
of the United States. Canada is integrated with the U.S. direct long-
distance dialing system (dial 1, area code and number). All forms of
communication are possible (including voice, text, data, and video), and
worldwide telegraphic services are available. Cellular and satellite
communications are also possible in Canada.
CHAPTER III. POLITICAL ENVIRONMENT
A. Nature of Political Relationship with the United States
The United States and Canada share a range of fundamental values such as
commitment to democracy, tolerance, and respect for human rights. It is
no wonder that the two countries are close friends and allies. Both
also have dynamic market economies with sophisticated industrial,
agricultural, resource and service sectors and a commitment to high
living standards for their citizens. These factors complement the
obvious geographic facts and have combined to make each the other's best
customer. Despite occasional frictions, the bilateral relationship,
probably the most intensive and complex in the world, is positive and
cooperative. It is often characterized as "never better".
B. Major Political Issues Affecting Business Climate
The Parti Quebecois (PQ), which advocates withdrawing Quebec from
Canada, controls the provincial government after having won election in
September 1994. The PQ has stated that it will hold a referendum on
Quebec sovereignty in the fall of 1995.
In the meantime, the federal and provincial governments face debts
accumulated over the last several years of recession with concomitant
low levels of revenue. The Federal government has acted to cut
spending, but many economists are still concerned that Canada is facing
a debt crisis with very grave potential consequences. Per capita debt
ratios are among the highest in the world, and with taxes already at
very high levels, the government's margin of manoeuver is severely
constrained. Governments at all levels are struggling to contain costs
while maintaining as much as possible of the social welfare programs
Canadians value. A major effort to revamp such programs, including
unemployment insurance, is underway but moving slowly. If successful, it
could well reallocate premiums and benefits.
C. Political System/Schedule for Elections/Orientation of Major
Political Parties
Canada is a parliamentary democracy and a federal state composed of ten
provinces and two territories. The current federal government was
elected on October 25, 1993, when the Liberal Party won 178 of the 295
seats in the House of Commons. A government is elected for a period not
to exceed five years, but normally calls elections before that date.
In Canada, the major political parties are:
The Liberal Party -- a center-left party which has the majority of
the House with 177 seats;
The Bloc Quebecois -- a party which advocates the independence of
Quebec, and which, with 53 seats in the House, is the official
opposition party;
The Reform Party -- a Western-based populist conservative party
that saw its number of seats in Parliament rise from one (with the
member sitting as an independent) to 52 in the last election, in
reaction to the unpopularity of the then governing party;
The New Democratic Party -- a social democratic party which holds
nine seats in the House;
The Progressive Conservative Party -- a center-right party, which
governed from 1984 to 1993, but now has only two seats in the House.
Provincial elections were held in Quebec in September 1994, in Manitoba
in April 1995, and in Ontario and Saskatchewan in June 1995. Elections
must be held in British Columbia by fall 1996.
CHAPTER IV. MARKETING U.S. PRODUCTS AND SERVICES
A. Distribution and Sales Channels
In spite of Canada's vast size, sales to Canadian industries are
characterized by relatively short marketing channels with direct
producer-to-user distribution of primary importance. Many Canadian
industries tend to be dominated by a few large-scale enterprises that
are highly concentrated geographically. In many cases 90 percent or
more of the prospective customers for an industrial product will be
located in or near two or three cities. Canada's consumer goods market
is more diffused than its industrial market. The use of marketing
intermediaries is prevalent. In many cases, complete coverage of the
consumer market requires representation in several commercial centers in
different regions across Canada. For most product areas regional
representation is considered the optimal marketing approach.
Toronto, the largest metropolitan area and the national center for
distribution, is usually the logical location for establishing sole
representation. If the country is to be geographically divided into two
markets, the natural division between east and west is on the western
shore of Lake Superior at Thunder Bay, Ontario. The primary
distribution centers for Eastern Canada are Toronto and Montreal. For
Western Canada, the most appropriate distribution centers are Vancouver
and Calgary. If three regional markets are considered, Quebec and the
Atlantic Provinces would comprise the first, with a distributor in
Montreal; Ontario the second, with a distributor in Toronto; and the
four western provinces the third, with a distributor in Vancouver or
Calgary.
B. Use of Agents and Distributors; Finding a Partner
Distribution channels in Canada vary greatly according to the
products/commodities involved. For example, industrial equipment of
considerable size and value is usually purchased directly by the end-
user. Smaller equipment and industrial supplies, on the other hand, are
frequently imported by wholesalers, acting in some cases as exclusive
distributors, or by U.S. manufacturers' sales subsidiaries. U.S. firms
have historically preferred to appoint manufacturers' agents who
regularly call on potential customers.
Many major distributors expect to work on a two-tier commission basis.
For contract shipments, agents are offered a realistically low
commission, but they receive a higher rate when purchases are made from
the local agent's own stocks. Consumer goods are purchased by importing
wholesalers, department stores, mail-order houses, chain stores,
wholesalers' and retailers' purchasing cooperatives, and many large,
single-line retailers. Manufacturers' agents also play an important
role in the importation and distribution of consumer goods. In
addition, the importance of department stores, mail-order houses and
cooperative purchasing organizations as direct importers has been
increasing substantially. Many of these groups have their own
purchasing agents in the United States.
For assistance in identifying appropriate agents/distributors in Canada,
U.S. companies are advised to contact the District Office of the U.S.
Department of Commerce serving their area to request the
Agent/Distributor Service (ADS).
C. Franchising
Franchised businesses of all varieties have enjoyed exceptional growth
and success in Canada over the past decade. Franchising is an
increasingly attractive method of doing business in Canada, in part
because no federal regulations currently exist which specifically
restrict franchise activities. Alberta is the only province to have
established franchising legislation which stipulates that the franchise
must be registered with the provincial securities commission.
Canada is one of the largest foreign markets for U.S. franchisers, with
approximately 240 franchise firms operating over 11,000 franchise units
country-wide. A large proportion of franchise units are restaurants,
non-food retail, convenience and food establishments, automotive
products and services, and business services. The steady growth in the
Canadian market for franchises is expected to continue. According to
the Canadian Franchise Association, the best franchising prospects are
for fast food type operations. Do-it-yourself franchises are also
expected to do well throughout the remainder of the decade, as are
franchises which focus on housekeeping, landscaping, and residential
maintenance.
The principle advantage U.S. franchisors have over third-country
competitors in this sector is the strong recognition and familiarity of
U.S. products and services by Canadian consumers. The high volume of
travel by Canadians to the United States combined with constant exposure
to U.S. television media through cable networks results in a relatively
high pre-disposition by most Canadians to U.S. products and services,
even before they are introduced into the Canadian market. Overall, U.S.
companies seeking to introduce proven franchise operations supported by
sufficient marketing and promotion can expect to be extremely well
received by Canadian consumers.
D. Direct Marketing
1. Mail Order Sales
Mail order sales in Canada are big business. In fact, Canadian
consumers purchase more goods through the mail, per capita, than do
their U.S. counterparts. For many companies, tapping into this market
can be as easy as placing an add in a magazine. In general, Canadian
audiences are targeted using the same techniques that are used in the
United States. However, shipping goods to Canadian customers involves
additional preparation.
When mailing goods to Canada, properly completed paperwork will ensure
the goods reach their destination without delay. For most mail order
shipments, the only paperwork needed is a standard business invoice.
When completing the invoice, two elements are critical:
(i) the description of goods, and
(ii) the value of the goods.
The exact amount paid by the customer for the goods should be indicated,
and the currency used should be stated (U.S. or Canadian dollars). If
the goods are shipped on a no-charge basis (samples or demos), the price
(value) that would have been charged if the goods were sold must be
shown. Two copies of the invoice should be attached to the outside of
the package. Unlike shipments within the United States, shipments to
Canada may be subject to customs duties and taxes. Whether shipping via
the U.S. mail or private firm, these additional charges are always paid
by the Canadian customer.
Duties and taxes are not charged on a product when the value of the
shipment is under C$20 Canadian (approximately US$15). Nevertheless, a
fully completed business invoice must accompany the package. On
shipments worth more than C$20, duties and taxes are applied to the full
value of the goods.
Duties for a specific product are determined by the type of product and
the country of origin. Although duties are paid by the customer,
exporters should be aware of the final cost to their customers to
evaluate their price competitiveness.
In addition to duties, nearly all shipments to Canada valued at over
C$20 are subject to the Goods and Services Tax (GST). Canada Post (the
Canadian Postal Service) charges a C$5 processing fee on all packages
that owe duty or tax. Since nearly all items owe at least the seven
percent GST, the practical effect of this measure is to increase the
cost of all mail order shipments into Canada by C$5. The U.S. Postal
Service maintains a similar US$5 processing fee on dutiable imports.
Mail order companies can avoid having the C$5 fee assessed to their
customers by registering to collect Canadian duties and taxes themselves
as a non-resident importer. Companies registering with Revenue Canada
will be required to prepay duties and taxes monthly. Companies can also
arrange to put up a bond in the amount of the estimated duties and
taxes.
Additional information on mail order rules is available in the U.S.
Department of Commerce publication, "Mail Order Sales to Canada."
E. Joint-Ventures/Licensing
Under Canadian law there is no precise meaning for the term "joint
venture". In the broadest sense, any arrangement in which two or more
businesses combine resources for some definable undertaking is
considered a joint venture. The Canadian legal system provides great
flexibility, and imposes very few restrictions as to the form which
joint ventures may take, such as equity or non-equity. Some joint
ventures require approval of the Government of Canada under the
Investment Canada Act. Such approval is based on whether the venture is
likely to be of net benefit to Canada, taking into account the criteria
of "benefit" specified in the Act. Net benefit criteria applied to the
review of joint ventures relates to issues such as: the level of
Canadian participation; the positive impact on productivity;
technological development; product innovation; industrial efficiency and
product variety in Canada. The majority of joint venture proposals
reviewed under the Act readily meet the test of net benefit. In certain
key industries, joint ventures with Canadian partners may prove to be
the most effective or in some cases the only means of market entry for
U.S. companies.
Canada is an attractive market for foreign licensors for a variety of
reasons. Most notably, Canada has no regulatory scheme governing
licensing arrangements. In some countries, licenses are not valid until
government approval or registration has been completed and often
registered licenses are available for public inspection. Potential
foreign licensors are usually pleased to learn that Canada does not
require any such registration or public disclosure. Moreover, the
Investment Canada Act, has no direct application to licensing unless it
relates in some way to the control of a Canadian enterprise.
Finally, Canada does not have any exchange controls or other
restrictions on the payment of royalties. As with many other countries,
Canada taxes royalty payments to non-resident licensors. A "withholding
tax" on such royalties is set at 25 percent under the Canadian Income
Tax Act, but is reduced to 15 percent or less if the payment is made to
licensors in countries with which Canada has entered into tax treaties,
like the United States.
F. Steps to Establishing an Office in Canada
The selection of the most appropriate form of business organization
depends on the purpose of the business in Canada and the particular
circumstances of its establishment, such as the type of business
activity, location, scope of operations, etc. Business is carried on in
Canada in forms similar to those in the United States. Public or
private corporations, partnerships, and sole proprietorships are all
familiar forms of doing business in Canada.
Although the corporate form of organization is often used by foreign
investors in Canada, a foreign corporation is not obligated to
incorporate its operation in Canada. Corporations can be either
federally or provincially incorporated. Incorporating in Canada is
considered to be a relatively simple and inexpensive procedure and can
be accomplished federally under the Canada Business Corporation Act or
under one of the ten provincial corporations acts. The general
requirements are similar for both federal and provincial incorporations.
Incorporating under the Canada Business Corporations Act permits a
company to do business in all ten provinces, although separate
registration to carry on business is still necessary in most of the
provinces. Incorporating provincially permits a firm to conduct
business only in the province where the incorporation takes place.
However, a number of the provinces have reciprocal agreements under
which the registration requirement is waived.
Canadian federal and some provincial legislation requires that a certain
portion of companies' directors be Canadian citizens and/or residents of
Canada or the province. A flat fee of C$500 is charged to incorporate
federally. Fee structures vary among the provinces, depending in some
cases on the authorized capital of the company to be incorporated. An
average of approximately three weeks, or sometimes less, is generally
required to process an application of incorporation once the requisite
documents have been received. Information on incorporation federally
under the Canada Business Corporations Act can be obtained from Industry
Canada's Corporation Branch -- see contact section.
As identified above, a company incorporated under the laws of one
province must take out a license to do business in each of the other
provinces in which it contemplates carrying on business. An important
exception is the reciprocal arrangement between the Provinces of Ontario
and Quebec, whereby licensing requirements do not apply to a company
incorporated in the other province. The Province of New Brunswick does
not require registration of extra-provincial companies. Information
regarding the documents which must be submitted when applying for
incorporation in one of the provinces may be obtained from the
respective Canadian provincial ministries. Companies applying for a
provincial charter in the Province of Quebec must comply with special
French language provisions.
Since obtaining a provincial license involves practically as much
expense as incorporating, many U.S. firms have preferred to incorporate
under federal procedures. In addition, Canadian profits are more easily
segregated in a local corporation, and the determination of liability
for Canadian and U.S. income taxes is facilitated.
Whether or not to obtain a license in a Canadian province to do business
as an extra-provincial company rather than to incorporate federally will
depend on the nature, extent, and duration of the anticipated business
activities. For example, where the company's business activities can be
conducted through a small sales office in one province without the
necessity of opening an office in other provinces, registration as an
extra-provincial company may be a suitable method of operation.
As noted above, firms established or operating in the Province of Quebec
must comply with the requirements of Quebec's Charter of the French
Language, which makes French the official language of the province.
Firms considering establishing operations in Quebec are advised to
contact a representative from the Office de la Langue Francaise, which
routinely works with companies to develop plans for complying with
Quebec's language laws, at the following address:
Office de la Langue Francaise
Public Relations Services
Tour Place Victoria, 16th Floor
Montreal, Quebec
H4Z 1G8
Tel: (514) 873-6565
Fax: (514) 873-3488
G. Selling Factors/Techniques
Selling strategies in Canada can vary greatly depending on the type of
product or service or regional market. It is important for first-time
marketers to note that distinct cultural differences between Canada and
the United States require, in some cases, a wholly Canadian approach to
selling, advertising and marketing. However, marketing and advertising
strategies employed by U.S. companies in the domestic market can
sometimes be equally effective in the Canadian market. U.S. companies
are advised not to assume that selling in Canada is the same as selling
in the domestic market and to carefully research the implications of
marketing and promotion activities prior to implementation in Canada.
H. Advertising and Trade Promotion
A variety of media is used to advertise in Canada. Television accounts
for the largest percentage of net advertising revenues, followed by
magazines and then newspapers. Although a majority of Canadians speak
English, the French-speaking market, concentrated in Quebec, should be
considered as a distinct market. Quebec is well served by French-
language press and radio and television stations. Advertising directed
toward this market should be specifically tailored to Quebec's distinct
cultural identity, consumer tastes, preferences and styles. Over 450
advertising agencies operate throughout Canada. A number of the larger
dominant agencies are subsidiaries of U.S. companies. Overall, Canadian
advertising rates are generally comparable with U.S. rates. Detailed
information on rates as well as lists of media representatives and
advertising agencies may be found in a publication entitled "Canadian
Advertising Rates and Data", published by Maclean Hunter, Ltd.
1. The Press
In the area of print media, there are more than 124 daily newspapers
published in Canada. Over 85 percent are english and approximately ten
percent are French. A few daily newspapers are published in languages
other than English or French. Trade magazines, most of which are sent
to specific audiences without charge, typically carry heavy advertising.
Trade magazines may be found which serve almost every major industry
sector or cluster in Canada. In 1994, the top four general interest
Canadian magazines included "Readers Digest" (circulation 1,300,000),
"Chatelaine" (circulation 900,000), "Maclean's" (circulation 600,000),
and "Canadian Living" (circulation 520,972). Canada's two largest daily
national business newspapers are the "Globe and Mail" and "The Financial
Post".
2. Radio and Television
More than 97 percent of Canadian households have at least one
television. More than 99 percent of Canadians also have radios in their
homes. Hundreds of public and commercial business firms operate cable
television and major broadcasting stations in the metropolitan areas.
More than 116 television stations (originating), 695 licensed and
originating (362 a.m. and 333 f.m.) radio stations, 2022 cable
television systems broadcast in Canada.
The Canadian Broadcasting Corporation (CBC) operates two national
television networks, one in English and one in French. A second
national television network (CTV) is private and broadcasts only in
English. A third private network (Global Television) operates in the
heavily populated area of southern Ontario and some areas of Western
Canada. There are fifteen independent television stations in Canada.
Cable television use in Canada is expanding rapidly. Over 70 percent of
Canada's population is hooked into a cable television system. The
Canadian Radio-Television and Telecommunications Commission (CRTC)
regulates publicly-owned broadcasting, commercial based radio and
television, and cable television.
In addition to media advertising, a large proportion of trade promotion
in Canada is conducted through national and regional trade shows.
Almost every major industry sector in Canada is represented through one
or more trade shows. Detailed information on major trade events in
Canada is available through the US & Foreign Commercial Service office
of the U.S. Embassy in Ottawa. Moreover, the U.S. & Foreign Commercial
Service in Canada organizes a variety of trade events in key industry
trade shows designed to facilitate participation by U.S. companies. A
listing of these events is included in Appendix G of this report.
Information on participating in any of these events may be obtained by
contacting any of the US & Foreign Commercial Service offices in Canada.
I. Pricing Product
As in the United States, product pricing is key to remaining competitive
vis-a-vis Canadian and third-country producers in both the Canadian
industrial and consumer markets. In the retail sector for example,
Canadian businesses have followed the successful U.S. trend toward
larger stores and highly competitive pricing policies. To date,
retailers in sectors such as food, drugs, electronics, home improvement,
general consumer goods, and office equipment and supplies have invested
in large warehouse or discount-style operations to expand sales and
market share in an increasingly competitive market. The emergence of
high volume warehouse merchandising in this market is the direct result
of consumer demand for competitively priced quality goods. Faced with
increased economic uncertainty, Canadian consumers and businesses alike
are now more than ever, concerned with competitive pricing and value in
all purchasing decisions.
When determining appropriate product pricing levels U.S. firms should
pay particular attention to the effects of exchange rates and applicable
duty and taxes on the price charged to customers/end-users. A survey of
prices of competitor products available from domestic and third-country
sources is a must in developing any pricing strategy. Moreover, U.S.
firms should be careful not to select pricing levels or to pursue
pricing strategies which may constitute "dumping" or "predatory pricing"
infringements under Canada's trade remedy and competition laws.
J. Sales Service/Customer Support
Canadian companies not only have a high awareness of U.S. products and
services but also have a strong inclination towards them as well.
Nevertheless, Canadian customers, whether corporate or individual,
demand appropriate sales service and after-sales customer support,
especially given the often significant distances involved between
customers in Canada and sellers in the United States. Corporate clients
often expect the U.S. seller to have an agent or distributor whom they
can contact immediately should any problems arise. Like their
counterparts in the United States, Canadian customers expect fast
service and emergency replacement should the need arise.
A U.S. company entering Canada should evaluate the demand for after-
sales service and support in its domestic U.S. market, an try to
replicate that network as closely as possible in the Canadian market.
If the product demands a strong network of sales and after-sales service
in the United States, it is likely that success in Canada will demand
appointing agents who can provide that service. There are many
companies in Canada which can offer that service as an agent, a
representative or on retainer.
If the domestic U.S. market can be served by a widespread customer-
support base, that same is likely to be a successful formula in Canada.
Many U.S. companies have found that the relative ease of establishing an
800 telephone number serving Canada and the United States may offer a
solution to this problem, at little marginal cost. This allows the
Canadian customer instant access to the U.S. vendor whether for solving
problems, answering questions, or just providing a higher "comfort
level" with a new product.
K. Selling to the Government
1. General
The FTA expands the size of the government procurement markets which are
open to free and fair (non-discriminatory) competition between U.S. and
Canadian suppliers. The Agreement requires clear, fair rules of bid
selection and provides for an effective Bid Challenge System (BCS). The
FTA applies to certain federal procurement valued at C$25,000 or more.
This means that a U.S. company bidding on a C$30,000 Government of
Canada contract competes on an equal footing with its Canadian
competitors; the company will be judged solely on its ability to deliver
a low-cost, high-quality product. As a result of these measures, U.S.
suppliers successfully competed for 591 Canadian contracts worth over
US$26 million from January 1989 through 1992.
NAFTA:
-- Extends coverage to listed government-owned corporations for
goods and services contracts valued at above $250,000 and construction
contracts valued at over $10 million.
-- Extends coverage to purchases of services valued over $50,000 by
listed federal government agencies.
-- Adds Crown Corporations to the list of covered entities. (the St.
Lawrence Seaway Authority, the Royal Canadian Mint, the Canadian
National Railway (freight), and Via Rail (passenger service).
-- Canadian federal entity coverage to include Communications
Canada, Transport Canada, and the Ministry of Fisheries and Oceans.
2. Services
The FTA is the first trade agreement to include trade in services. The
Agreement ensures that companies in over 150 service sectors can provide
their services in the partner country without discrimination. The
Agreement requires that business regulations for services be clear and
explicit. The FTA does not change existing regulations governing
services in the two countries but locks in current levels of protection.
In effect, the Canadian Government is prohibited from passing new
legislation which would further restrict the right of a U.S.-based
engineering, advertising, or other covered service firm from doing
business in Canada. The services chapter of the FTA includes special
provisions for the architecture, tourism, and telecommunications
sectors.
NAFTA:
Extends coverage to nearly all service sectors.
Eliminates existing federal and local regulations restricting
partner country access to services markets, unless reserved.
Removes citizenship or permanent residency requirements for
licensing of professional service providers.
3. Financial Services
The FTA removes virtually all discrimination on the basis of nationality
in the financial services sector (commercial and investment banks,
savings and loan institutions, and certain insurance activities).
Specifically, the FTA eliminates Canadian restrictions on market share
and asset and capital expansion for U.S. bank subsidiaries in Canada and
gives U.S. financial institutions the same rights as Canadian financial
institutions to establish insurance companies, trust companies, and
certain types of banks in Canada. The FTA also provides that the
benefits of further liberalization in both countries be extended to the
financial institutions of the partner country.
NAFTA:
Establishes a comprehensive set of principles and rules governing
trade and investment in financial services.
Covers state/provincial and local, as well as federal, measures.
Guarantees U.S. firms in Canada the right to process data in the
United States.
Provides access to the NAFTA dispute settlement mechanisms for
NAFTA financial services firms.
L. Protecting Your Product from IPR Infringement
1. Patents
Patents in Canada are governed by the Patent Act. The Act allows for
patenting of processes as well as products. Canada has a "first to
file" system with an absolute novelty requirement. The term of a patent
is 20 years from the filing date. Deferred examination is possible, and
provisions exist for payment of maintenance for pending applications and
issued patents.
In February 1993, Canada passed legislation eliminating compulsory
licensing of pharmaceuticals, thereby extending patent protection to the
standard 20 years. The legislation provides for a statutory review
after four years, but the governing party has resolved to monitor its
effect on drug costs, and to discuss patent protection in public
consultations on health care reform.
The Patent Cooperation Treaty came into force in Canada in January 1990.
It provides for foreign patent protection in Canada for treaty
signatories. From the perspective of the Canadian inventor, the Treaty
standardizes Canadian patent practices with those of Canada's principal
trading partners and makes it easier for Canadians to acquire foreign
patents through standardized filing and searching of prior art.
2. Copyrights
Canada is a member of the World Intellectual Property Organization
(WIPO). Canada acceded to the Berne Convention for the Protection of
Literary and Artistic Works at the Rome (1928) revision level and is
bound by the Universal Copyright Convention (UCC) 1952 text. Thus,
under its international agreements, Canada is required to provide
national treatment as prescribed by the relevant UCC and Berne
Convention texts.
The Canadian Copyright Act of 1924 was amended in 1989 to reflect the
state of modern technology and to introduce adequate enforcement
measures. The Act granted explicit copyright protection for computer
programs, and provided a right of payment for retransmission of
broadcast programming as required by the FTA. In 1993, additional
legislation was implemented to protect emerging forms of technology,
specifically integrated circuit design and biotechnology. Further
legislation passed in 1993 revised the definition of "musical work" and
ensured that royalties are paid for all uses of the work.
In January 1994, the Copyright Act was amended to reflect the changes
required by the NAFTA, such as rental rights for computer programs and
sound recordings, protection for databases and other compilations, and
increased measures against all categories of pirated works. The
government is still examining some remaining unresolved copyright
issues, including a home copying regime, neighboring rights, and
possible special treatment for schools and libraries.
M. Need for a Local Attorney
The population of attorneys in Canada is far less than that of the
United States, and using an attorney for routine business practices is
less prevalent. U.S. companies should consult with an attorney for a
variety of business activities in Canada, such as establishing a
corporate investment or other presence, or marketing a product or
service that requires copyright, patent or trademark protection.
The Canadian legal system is closer to the British model than to the
U.S. system, although there are many similarities between Canadian and
U.S. commercial law. Most large Canadian law firms have partnerships or
strong associations with counterpart firms in many parts of the United
States, and are well experienced with matters that cross international
lines, especially in trade and business.
Naturally, any legal problems, or difficulties with Canadian Customs or
other government agencies, are likely to be best handled by an
experienced local legal representative. The U.S. Embassy and Consulates
in Canada can provide lists of local attorneys experienced in a range of
commercial and other legal matters.
CHAPTER V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
The following section describes and lists the leading trade prospects in
Canada for U.S. exporters of both food and non-food products. Detailed
statistical and market data concerning each individual best prospect is
also provided.
A. Best Prospects for Non-Agricultural Goods and Services
for U.S. Exporters to Canada
The Canadian import market, already the most favorable for U.S. goods
and services of any in the world, should see continued growth through
FY96 and beyond. U.S. goods and services account for an overwhelming
share of the import market in Canada, and the United States remains by
far Canada's largest export market and import supplier. On the basis of
current market trends and market conditions, the following sectors are
considered to be best prospects for U.S. exports to Canada.
1. CSF Computer Software
2. CPT Computers and Perhipherals
3. TEL Telecommunications Equipment
4. POL Pollution Control Equipment
5. APS Automotive Aftermarket Parts
6. FUR Furniture
7. MED Medical Equipment
8. ELC Electronic Components
9. SPT Sporting Goods
10. MTL Machine Tools and Metalworking Equipment
11. MHM Materials Handling Machinery
12. PMR Plastic Materials and Resins
13. APS Automotive Parts and Service Equipment
14. APP Apparel
15. TXF Textile Fabrics
16. BLD Building Products
17. AIR Aircraft and Parts
18. HCG Household Consumer Goods
NOTES TO THE BEST PROSPECTS
(i) All figures are expressed in millions of U.S. dollars, unless
otherwise indicated.
(ii) All growth rates are considered in real terms.
(iii) Estimated inflation/exchange rates are as follows:
1994 1995 1996
EXCHANGE RATE (C$1 = US$X) 0.7321 0.7250 0.7300
INFLATION RATE 0.2 2.0 2.2
* All statistics are unofficial estimates.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 1
B. NAME OF SECTOR: COMPUTER SOFTWARE
C. ITA INDUSTRY CODE: CSF
PART II. NARRATIVE
The Canadian software market is projected to grow at an annual rate of
between ten and 12 percent during the 1996 to 1998 period. Factors
supporting this growth include increased use of computers in the
workplace as well as the increased proliferation of computer
technologies in non-business markets, such as the home consumer market,
the educational market, the entertainment and in-house publishing
industries, and the reference/information markets. According to a
recent Statistics Canada survey, almost half of the workforce - 48
percent - is using computers on the job, compared to 33 percent in 1989,
and this trend is expected to continue.
Price competition, particularly in the personal computer software area
will continue as firms compete for market share in specific industry
segments and platforms. Sales of personal computer software is
projected to be one of the fastest growing software categories, but due
to price reductions, revenues will grow at about half of the projected
gain in unit volume. Corporate and home consumers continue to purchase
a greater variety of software packages, and their hardware procurement
decisions will increasingly be based on the available types of
software/variety of applications, rather than on the types of hardware
they own (the traditional purchase factor only a few years ago).
Development of new personal computer operating systems will also
contribute to the demand for new applications software for personal
computers. Increasing demand for multimedia capabilities and
applications will also substantially increase the demand for highly
sophisticated software packages.
The proliferation of inter and intra company networks will boost demand
for networking software, groupware software, and middleware software.
This phenomenon will also contribute to increased demand for consulting
services, particularly in client/server and networking systems
integration.
Although U.S. companies continue to be the dominant suppliers of
computer software in the Canadian market, Canada's software industry has
a strong nucleus of companies that have achieved international
recognition as technical and market leaders for their products. Most of
these products are niche-oriented, with well-known applications in
computer graphics and animations, advanced programming tools and
languages, geographic information systems, forms-processing software,
and educational/computer-based training products. Also noteworthy are
Canadian achievements in specialty software areas like remote sensing,
telecommunications network management, expert systems for mineral
processing, real-time systems design, process and industrial control,
geophysical engineering and power systems analysis.
Third-country competition for U.S. software and services firms in Canada
are from such Third World nations as China and India, which supply
programming and software services for a fraction of the cost of North
America. To maintain their dominant position, U.S. companies must
supply quality products in multiple formats and utilize cost effective
distribution channels.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 1,358 1,473 1,635
B. TOTAL LOCAL PRODUCTION 1,228 1,311 1,438
C. TOTAL EXPORTS 459 482 522
D. TOTAL IMPORTS 589 644 719
E. IMPORTS FROM THE U.S. 537 597 669
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 2
B. NAME OF SECTOR: COMPUTERS AND PERIPHERALS
C. ITA INDUSTRY CODE: CPT
PART II. NARRATIVE
Demand for computer products and technologies is expected to increase
approximately three to six percent annually during the 1996 to 1998
period. Recent strategic partnerships in the computer industry will
further increase the already intense competition in this industry, thus
resulting in further price reductions and marginal gains in revenue
growth during the forecast period. As a result, price and distribution
channels continue to be critical success factors in the Canadian
computer hardware and peripherals market.
Relatively little value-added work is being done by the Canadian
computer hardware manufacturing sector. Most major components such as
semi-conductors, disk drives and circuit boards are imported, with
typically only final assembly or packaging done in Canada. As a result,
the majority of Canadian computer hardware and peripherals market demand
is satisfied by imports. Although the United States remains the
dominant supplier of such products for the Canadian market, competition
from third countries with low production costs (such as Southeast Asian
countries) is expected to increase. Nonetheless, since Canada
represents a sophisticated market of consumers demanding superior
quality technologically advanced products, U.S. companies with
competitively priced products, effective distribution channels and
strong customer service will likely remain the dominant import
suppliers.
The trend to downsize computer systems from mainframes and mini
computers to personal computers and personal workstations (a hybrid of
personal computers and low-end workstations) will remain strong.
Portable computer products are expected to represent a fast growing
segment of the Canadian personal computer market, accounting for 25
percent of all personal computer sales in Canada in 1995.
The home/consumer computer market is growing rapidly, and accounts for a
significant part of Canadian demand for personal computers. This market
segment demands personal computers equipped with multimedia systems and
good graphics. This will also drive Canadian demand for associated
products such as CD-ROM players, sound cards, and video accessories.
In the business sector, computerization of Canadian companies will
continue to increase and more companies will likely adopt advanced
processing machinery requiring computer technologies. According to a
Statistics Canada survey, almost half of the Canadian workforce - 48
percent - is using computers on the job, compared to 33 percent in 1989.
Demand for computer networking hardware products will also increase
significantly as corporate re-engineering continues in search of
operational efficiencies and includes the networking of corporate
computer systems.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 4,503 4,504 4,656
B. TOTAL LOCAL PRODUCTION 3,116 3,081 3,171
C. TOTAL EXPORTS 2,834 2,840 2,927
D. TOTAL IMPORTS 4,221 4,263 4,412
E. IMPORTS FROM THE U.S. 2,750 2,828 2,920
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 3
B. NAME OF SECTOR: TELECOMMUNICATIONS EQUIPMENT
C. ITA INDUSTRY CODE: TEL
PART II. NARRATIVE
Valued at US$3.9 billion in 1994, the mature Canadian telecommunications
equipment market is diverse and sophisticated. Despite the dominance of
several Canadian companies in the worldwide telecommunications market,
the Canadian market remains extremely receptive to imports (primarily
from the United States) which were just over US$2 billion in 1994.
Even though the number of users is not growing substantially, the market
continues to grow due to increased competition. Companies are forced to
purchase new equipment in order to remain competitive with the new
players who enter the market. Progressive deregulation of the Canadian
industry by its regulating body, the Canadian Radio-Television and
Telecommunications Commission (CRTC), has set the stage for increased
competition which is mainly from U.S. companies engaged in joint-
ventures with Canadian manufacturers. Adding to this, Canada's largest
manufacturer of telecommunications equipment, Northern, recently
abolished it's long-standing preferred supplier arrangement which
favored Canadian companies. Consequently, improved market access for
U.S. telecommunications equipment suppliers should result in greater
sales opportunities. Significant opportunities for U.S. exports remain
in applications for asynchronous terminal mode (ATM) technology and
integrated services network (ISDN) technology.
Promising Subsectors/Estimated 1996 Total Market Size:
H.S. 8525.10 Voice processing equipment and systems 161
H.S. 8525.2050 Data communication systems 503
H.S. 8527.90 Cellular phones 159
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 3,869 4,083 4,247
B. TOTAL LOCAL PRODUCTION 3,254 3,343 3,384
C. TOTAL EXPORTS 1,395 1,434 1,454
D. TOTAL IMPORTS 2,010 2,089 2,169
E. IMPORTS FROM THE U.S. 1,226 1,368 1,488
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 4
B. NAME OF SECTOR: POLLUTION CONTROL EQUIPMENT
C. ITA INDUSTRY CODE: POL
PART II. NARRATIVE
The implementation and enforcement of stricter federal and provincial
environmental legislation during the past three years has positively
impacted demand for pollution control equipment in Canada. This market
sector is forecast to grow by at least two to three percent annually in
real terms through 1997. The primary Canadian end-users of such
equipment are the pulp and paper, chemical, metallurgical and textile
industries.
Implications for U.S. suppliers are positive, especially considering the
fact that Canada currently imports about 37 percent of its needs for
environmental technology. Increasingly, Canadian companies are in need
of products and services which focus on pollution prevention rather than
"end-of-the-pipe" reactionary solutions. Volatile organic compounds, a
precursor to smog, are a problem throughout southern Ontario and Quebec,
the Vancouver area, and New Brunswick. The demand for environmental
technology in western Canada is also expected to grow substantially, and
environmental initiatives should represent increasing opportunities for
U.S. firms. Demand for water pollution equipment is also expected to
increase as a result of increased public and political concerns about
protecting and restoring Canada's aquatic environment.
In marketing pollution control equipment and services to Canada, U.S.
suppliers also benefit from several advantages, including advanced
technical know-how, proximity to the market, and reduced tariffs under
the NAFTA.
Promising Subsectors/Estimated 1996 Total Market Size:
H.S. 8421.29 Filtering or purifying machinery/apparatuses 202
for liquids
H.S. 8421.39 Filtering or purifying machinery/apparatuses 515
for gases and scrubbers
H.S. 9030.10 Hazardous waste equipment 437
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 3,970 4,088 4,280
B. TOTAL LOCAL PRODUCTION 3,235 3,331 3,488
C. TOTAL EXPORTS 724 744 779
D. TOTAL IMPORTS 1,459 1,501 1,571
E. IMPORTS FROM THE U.S. 1,180 1,214 1,271
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 5
B. NAME OF SECTOR: AUTOMOTIVE AFTERMARKET PARTS
C. ITA INDUSTRY CODE: APS
PART II. NARRATIVE
[Note: Although some automotive aftermarket parts (AAP) can also be
installed in new vehicles, in which case they would be considered OEM
and not "aftermarket" parts, for the purpose of this research, these
products have not been included in the calculation of the market size
for automotive parts and service (and they have therefore not been
double counted).]
The demand for AAP is principally affected by the ages and types of
vehicles on the road. Current high demand is attributed to the record
number (15.9 million) of vehicles on Canadian roads. The AAP market is
expected to show significant growth as the large volume of units sold in
the late 1980s ages and requires aftermarket attention. Other factors
influencing demand of AAP is the state of the Canadian economy, and
government regulation.
Canadian subsidiaries of U.S.-based companies account for 90 percent of
domestic production in this market. The remaining manufacturers in
Canada are mainly specialized, smaller Canadian-owned companies. The
United States has historically been the dominant supplier of AAP imports
into Canada. However, in recent years the U.S. share of total imports
declined due to the growing number of Japanese "transplant" cars making
in-roads into the Canadian market, and due to North American
manufacturers' increased sourcing of components from Japan as part of
their "globalization" strategy for their product lines. Nonetheless,
U.S. suppliers of high-quality AAP will still find excellent
opportunities in the Canadian market. U.S. suppliers wishing to
penetrate the Canadian market should pay particular attention to U.S.
subsidiaries' dealer networks and market to them through their U.S.
headquarters, stressing quality, service and just-in-time delivery
capability, as well as concentrating on product areas where new demand
is created through technological change.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 3,412 3,616 3,944
B. TOTAL LOCAL PRODUCTION 1,592 1,686 1,814
C. TOTAL EXPORTS 1,162 1,230 1,326
D. TOTAL IMPORTS 2,982 3,160 3,456
E. IMPORTS FROM THE U.S. 2,151 2,280 2,489
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 6
B. NAME OF SECTOR: FURNITURE
C. ITA INDUSTRY CODE: FUR
PART II. NARRATIVE
The Canadian furniture market (which includes household furniture,
office furniture, and medical/hospital furniture) experienced renewed
growth after mid-1994. Industry experts are optimistic about continued
growth throughout 1995 and 1996. In fact, the Canadian furniture
industry is projected to grow at a real rate of between seven and ten
percent annually during the forecast 1996 to 1998 period.
More specifically, the Canadian office furniture market is estimated to
grow at a real rate of nine to ten percent annually. Emphasis on new
design, and higher quality craftsmanship will provide opportunities for
U.S. exporters of office furniture in the Canadian market, especially if
they can provide quality items at a competitive price. Opportunities
exist for U.S. exports of metal and wooden office furniture, office
seats, and swivel seats of variable height adjustments.
The Canadian household furniture market is estimated to grow at a real
rate of seven to eight percent annually during the forecast period.
Industry experts believe that since the consumer purchases of household
furniture have not reached the same levels as housing sales, pent-up
demand will significantly increase sales of household furniture in 1996.
Recent and ongoing changes in Canadian public health care legislation
and cutbacks on funding given to hospitals by provincial governments
have resulted in the implementation of cost reduction measures in
hospitals throughout Canada. While these cutbacks may somewhat slow
future demand for medical/hospital furniture in hospitals, demand will
continue for this type of furniture in clinics and other health care
facilities as well as in residential homes for the elderly. The
projected growth for Canadian medical/hospital furniture market is
estimated at a real rate of between one and two percent annually.
U.S. imports will continue to dominate Canada's total import market for
furniture during the next few years. Third-country competition is
strongest in the segment of the market that supplies low-quality
inexpensive items. Export sales of Canadian furniture were a major
contributor to the industry's growth in 1994 and this trend is expected
to continue throughout 1996, mainly due to the low value of the Canadian
dollar relative to the U.S. dollar.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 2,868 3,145 3,566
B. TOTAL LOCAL PRODUCTION 3,163 3,589 4,161
C. TOTAL EXPORTS 1,110 1,217 1,358
D. TOTAL IMPORTS 815 773 763
E. IMPORTS FROM THE U.S. 616 575 569
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 7
B. NAME OF SECTOR: MEDICAL EQUIPMENT
C. ITA INDUSTRY CODE: MED
PART II. NARRATIVE
The Canadian market for medical equipment is dominated by foreign
manufacturers who supply 80 percent of the market. U.S. manufacturers
traditionally account for 75 percent of Canadian imports of medical
equipment. U.S. suppliers face third-country competition from Asian
countries (which benefit from low production costs) and from European
countries, such as Germany and the United Kingdom, which focus on
specialized products.
Socialized medicine has established Canada as of the world's strongest
markets for medical equipment. Several factors will continue to impact
market demand for medical equipment in Canada in the coming years,
foremost of which is the country's aging population. As Canada's
population ages, there will be increasing demand for products such as
electronic cardiovascular and patient mobility devices. Also, in a
continuing effort to reduce healthcare costs, the Canadian industry will
be using more specialized equipment to reduce the need for medical staff
and professionals. Therefore, despite the many recent hospital closures
occurring in Canada, opportunities in a wide spectrum of product areas
will continue to exist.
Promising Subsectors/Estimated 1996 Total Market Size:
H.S. 9018.11 Electrocardiographs 6.0
H.S. 9018.19 Electro-diagnostic apparatus 18.1
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 1,200 1,210 1,245
B. TOTAL LOCAL PRODUCTION 483 486 503
C. TOTAL EXPORTS 241 244 256
D. TOTAL IMPORTS 958 968 998
E. IMPORTS FROM THE U.S. 747 746 771
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 8
B. NAME OF SECTOR: ELECTRONIC COMPONENTS
C. ITA INDUSTRY CODE: ELC
PART II. NARRATIVE
The total market value of the Canadian electronic components industry is
difficult to estimate, given it's marked fluctuations and the breadth of
the market. None-the-less, with strong growth projected in the
telecommunications and information technology sectors over the next 12 -
18 months (approximately ten to 12 percent annually), the electronic
components industry should perform in the same range as well. A
considerable portion of the imports from the United States in this
sector are brought to Canada for additional processing and are then re-
exported. A strong domestic market exists with some major Canadian
firms producing for export as well. Innovative or cost-effective
technologies employed by U.S. companies to introduce new components or
improve existing ones, should allow them to compete effectively in this
marketplace in areas such as satellite parts and components, semi-
conductors and electronic transformers.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 4,119 4,492 4,784
B. TOTAL LOCAL PRODUCTION 718 835 942
C. TOTAL EXPORTS 1,726 1,965 2,216
D. TOTAL IMPORTS 5,129 5,622 6,057
E. IMPORTS FROM THE U.S. 2,799 3,208 3,554
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 9
B. NAME OF SECTOR: SPORTING GOODS
C. ITA INDUSTRY CODE: SPT
PART II. NARRATIVE
Demand for sporting goods and equipment in Canada is expected to remain
strong during the next several years. Sustained economic growth,
coupled with increasing levels of personal disposable income and a
growing awareness among consumers of the health benefits associated with
increased physical fitness will all continue to stimulate demand for
these products in Canada.
Although Canada's level of manufacturing is strong in certain segments
of this market, imports represent approximately half of market demand
and several opportunities exist for U.S. suppliers. Although Asian
suppliers possess low-cost production advantages, U.S. suppliers have
the competitive advantages of reduced tariffs under the NAFTA, higher
product safety standards, better product quality, and greater brand
recognition over third-country products as well as geographic proximity
to the Canadian market. The growing concern among Canadians for product
safety and performance standards in particular provides an edge for U.S.
suppliers. Total sporting goods imports and U.S. imports of these
products are forecast to grow at respective average annual real rates of
three to five percent and two to four percent, through 1998.
Promising Subsectors/Estimated 1996 Total Market Size:
H.S. 9506.70.12 In-line skates attached to boots 60
H.S. 9506.91 General physical exercise, gymnasium athletics 200
articles
H.S. 8712.00 Bicycles and other cycles, not motorized 174
H.S. 9506.31 Golf clubs 36
H.S. 9506.32 Golf balls 41
H.S. 9506.39 Golf equipment 66
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 951 1,200 1,400
B. TOTAL LOCAL PRODUCTION 567 580 585
C. TOTAL EXPORTS 247 290 360
D. TOTAL IMPORTS 631 662 695
E. IMPORTS FROM THE U.S. 210 218 227
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 1
B. NAME OF SECTOR: MACHINE TOOLS AND METALWORKING EQUIPMENT
C. ITA INDUSTRY CODE: MTL
PART II. NARRATIVE
Industry experts predict that competitive pressures will require
Canadian companies to increase expenditures on capital goods and
equipment. This will lead to growth in demand in the machine tools and
metalworking equipment market, as well as in other industrial markets.
Growth in this market is expected to remain during the forecast period
of 1996 to 1998, however, it may not be as strong as it was in recent
years. Global and international competition have motivated Canadian
companies to strive for improved quality while simultaneously reducing
costs and this trend is expected to continue throughout 1996. Canadian
manufacturing strength resides in the development and production of
high-quality, custom-built systems and metal-forming tools, primarily
for the North American automotive industry. The majority of Canadian
machine tool companies serve the automotive and aerospace markets and,
to a lesser degree, the heavy machinery and electrical/electronics
sectors.
According to a recent survey, demand for computer-numerically-controlled
machines in the Canadian machine tool industry is strong.
Lathes/turning centers, boring/milling machines, milling machines, and
machining centers also ranked as purchasing priorities among those
surveyed. Since some of this technically advanced equipment is not
widely available in Canada, opportunities will exist for U.S. companies
capable of supplying this equipment will grow. While experts predict
U.S. companies will continue to dominate Canada's import segment of this
market, U.S. firms must be aware of the increased foreign competition
from low-cost Asian producers. Therefore, quality products must be
supplied at reasonable prices. Nonetheless, U.S. companies benefit not
only from their proximity to the U.S. market, but also from the tariff
reductions resulting from the implementation of the FTA and the NAFTA.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 3,507 3,408 3,536
B. TOTAL LOCAL PRODUCTION 1,977 2,248 2,846
C. TOTAL EXPORTS 1,196 1,349 1,573
D. TOTAL IMPORTS 2,726 2,509 2,263
E. IMPORTS FROM THE U.S. 1,965 1,898 1,861
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 11
B. NAME OF SECTOR: MATERIALS HANDLING MACHINERY
C. ITA INDUSTRY CODE: MHM
PART II. NARRATIVE
Industry experts predict that as commercial and industrial activity in
Canada continues to expand, Canadian companies will increase their
capital expenditures. This is expected to result in growth in demand in
the materials handling machinery market, as well as in other industrial
markets.
Demand trends in the materials handling sector in Canada require
suppliers to provide increasingly sophisticated products, improved
automation, and enhanced safety features. Canadian companies are very
successful in producing "niche" products to satisfy a growing domestic
and export market; however, they do not have the economies of scale
necessary to compete in standard items. The Canadian market will,
therefore, continue to rely on U.S. manufacturers to supply these
products. The dominance of U.S. companies in Canada's materials
handling machinery import market is expected to continue throughout the
forecast period of 1996 to 1998.
Promising Subsectors/Estimated 1995 Total Market Size
H.S. 8427.10 Self propelled work trucks powered 147
by an electric motor
H.S. 8431.20 Parts of fork-lift and other work 113
trucks fitted with lifting equipment
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 2,018 2,276 2,321
B. TOTAL LOCAL PRODUCTION 1,594 1,825 1,861
C. TOTAL EXPORTS 364 415 423
D. TOTAL IMPORTS 788 900 918
E. IMPORTS FROM THE U.S. 568 654 667
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 12
B. NAME OF SECTOR: PLASTIC MATERIALS AND RESINS
C. ITA INDUSTRY CODE: PMR
PART II. NARRATIVE
Canada's plastics industry is growing at a healthy real rate of 7.4
percent annually. In light of increasing competitive pressures and
market demand, this sector is expected to invest an average of US$550
million per year through the year 2000 on new machinery and equipment.
The Canadian plastic materials and resins industry currently imports 85
percent of it's raw materials from the United States. However, much of
these materials are incorporated into final products which are exported
abroad. Recently, Canadian manufacturers have experienced a surge of
international orders, due primarily to the low cost of the Canadian
dollar.
The plastic materials and resins sector in Canada is controlled
primarily by U.S.- owned subsidiaries. The industry consists of an
estimated 90 establishments which produce primarily commodity-grade
thermoplastic and medium-volume thermosetting resins and compounds. The
Society of the Plastics Industry of Canada estimates Canada's resin
capacity at 3.5 million tons.
Promising Subsectors:
H.S. 3901 Polymers, in primary forms
H.S. 3907 Polyacetals, polyethers, epoxide resins, polycarbonates in
primary forms
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 3,576 4,104 4,438
B. TOTAL LOCAL PRODUCTION 2,455 3,219 3,481
C. TOTAL EXPORTS 3,358 4,272 4,619
D. TOTAL IMPORTS 4,478 5,156 5,576
E. IMPORTS FROM THE U.S. 3,832 4,376 4,733
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 13
B. NAME OF SECTOR: AUTOMOTIVE PARTS AND SERVICE EQUIPMENT
C. ITA INDUSTRY CODE: APS
PART II. NARRATIVE
[Note: For the purposes of this report, the automotive parts and
service equipment market contains only OEM products not included in the
aftermarket segment of the market. Products have therefore not been
double counted in the determination of the size of these two markets.]
The Canadian automotive parts and service equipment market can expect
above average growth as a result of new vehicle sales in 1994. Industry
experts predict the new vehicle market in Canada (total car and truck
sales) for the 1994-model year at 1.3 million units. Car sales are
expected to surpass 800,000 units, an increase of eight percent from the
1993-model year, and truck sales are expected to continue to grow to a
projected level approaching 500,000 units, an increase of more than 13
percent. Industry experts forecast average annual Canadian demand
growth for automotive parts and service equipment at between seven and
nine percent during the next three years (1996 to 1998).
U.S. suppliers wishing to penetrate the Canadian market should focus on
dealer networks and, in the case of local firms which are subsidiaries
of U.S. companies, approach these through company head offices in the
United States. In 1993, the Canadian automotive parts industry
represented 12 percent of total North American automotive manufacturing.
More than 90 percent of these sales were to Chrysler, Ford and General
Motors with the remainder shared between Asian and European assemblers.
During the 1993-model year, Japanese car sales dropped by 17 percent,
compared with just one percent for the North American based firms. At
the same time, North American manufacturers have largely closed the gap
in terms of quality and cost competitiveness.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 22,699 24,218 26,231
B. TOTAL LOCAL PRODUCTION 10,967 11,701 12,497
C. TOTAL EXPORTS 8,617 9,193 9,842
D. TOTAL IMPORTS 20,349 21,710 23,576
E. IMPORTS FROM THE U.S. 17,112 18,258 19,810
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 14
B. NAME OF SECTOR: APPAREL
C. ITA INDUSTRY CODE: APP
PART II. NARRATIVE
While recent growth in the Canadian apparel industry has softened,
increases are expected over the near-term. In fact, recent economic
indicators reveal increasing levels of personal disposable income and
increasing retail sales which should lead to greater consumer spending
on apparel products in Canada. Nonetheless, Canadian consumers will
remain price-sensitive, and will seek quality items at fair prices.
The key to success for U.S. exporters to the Canadian apparel market
during the forecast 1996 to 1998 period will be to work closely with
Canadian buyers. U.S. companies must continue to respond to local
demand preferences within the distinct regional markets in Canada. The
Canadian apparel industry has a reputation for producing a diversified
range of fashionable high-quality items, mostly for the medium to high-
price retail market, and is concentrated in the provinces of Quebec,
Ontario and British Columbia. Although there is tremendous competition
from third-country suppliers, U.S. suppliers of low-priced quality goods
have excellent opportunities to penetrate the Canadian apparel market.
The elimination of tariffs by 1998 on U.S.-origin goods, lower
production costs, and market proximity provide significant competitive
advantages for U.S. suppliers over third-country competition.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 6,574 6,724 6,918
B. TOTAL LOCAL PRODUCTION 5,128 5,110 5,262
C. TOTAL EXPORTS 546 444 578
D. TOTAL IMPORTS 1,992 2,058 2,234
E. IMPORTS FROM THE U.S. 239 252 257
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 15
B. NAME OF SECTOR: TEXTILE FABRICS
C. ITA INDUSTRY CODE: TXF
PART II. NARRATIVE
Economic indicators reveal improvements in consumer spending and in the
level of personal disposable income which should translate into
increased market demand in Canada for many products, including textile
fabrics. Although growth will be somewhat weaker than in recent years,
experts predict positive growth figures throughout the 1996 to 1998
forecast period.
U.S. suppliers will continue to dominate the import segment of this
Canadian market. In fact, U.S. suppliers are expected to continue
making inroads into the Canadian market, with many displacing
traditional European suppliers. The strengthening position of U.S.
suppliers in this market will only continue with the elimination by 1998
of tariffs on U.S. goods, according to the NAFTA. Furthermore,
geographic proximity, product quality, and comparatively low-cost
production through economies of scale are all advantages U.S. companies
have over third-country competition. U.S. companies should note that
Canadian use of textile fabrics tends to be for small production runs
incorporating high levels of quality and that successful textile sales
to Canada depend on competitive pricing and quality products.
Promising Subsectors/Estimated 1996 Total Market Size:
H.S. 5208.52 Plain weave cotton fabrics, printed 121
H.S. 5209.42 Denim fabrics of cotton 142
H.S. 5407.52 Woven fabrics of textured polyester 150
filaments, printed
H.S. 5701.10 Carpets of wool or fine animal hair knotted 145
H.S. 6002.92 Knitted or crocheted fabrics, of cotton or 193
man-made fibers
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 5,276 5,270 5,454
B. TOTAL LOCAL PRODUCTION 3,481 3,431 3,551
C. TOTAL EXPORTS 422 437 453
D. TOTAL IMPORTS 2,216 2,276 2,356
E. IMPORTS FROM THE U.S. 1,304 1,341 1,388
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 16
B. NAME OF SECTOR: BUILDING PRODUCTS
C. ITA INDUSTRY CODE: BLD
PART II. NARRATIVE
Although growth in Canada's building equipment market has recently
slowed, industry experts remain hopeful that certain segments of the
market will continue to improve. As sales of building supplies are
entirely dependent on the level of building construction and renovation
in Canada, a high level of activity in the residential, industrial,
commercial and institutional sectors is critical to continued growth.
Both the residential renovation segment and the institutional
construction (for schools, in particular) segment of the market
represent the most opportunity. The renovation industry remains the
principal outlet for new and innovative U.S.-made building supplies in
Canada. Consumers have indicated that products which support energy
efficiency and which are environmentally friendly will remain high on
the list of preferred features in new homes and renovation work.
Canada's revised National Building Code, expected by late 1995, may
represent opportunities for U.S. suppliers of selected products. Also,
with the relatively low Canadian dollar, domestic producers have been
able to maintain, and in some cases improve on, the levels of 1994
production. Building products manufactured in the United States
continue to be regarded by Canadian buyers as superior quality than most
other competing imported brands. Although, Pacific Rim countries
continue to export low-end products to Canada, buyers tend to avoid
offshore products unless the quality satisfies consumer expectations and
is appropriate for the Canadian climate.
Promising Subsectors/Total Estimated 1995 Total Market Size:
H.S. 3925.20 vinyl windows 852
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 5,626 5,711 5,825
B. TOTAL LOCAL PRODUCTION 10,022 10,273 10,478
C. TOTAL EXPORTS 7,338 7,607 7,758
D. TOTAL IMPORTS 2,942 3,045 3,105
E. IMPORTS FROM THE U.S. 1,804 1,868 1,904
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 17
B. NAME OF SECTOR: AIRCRAFT AND PARTS
C. ITA INDUSTRY CODE: AIR
PART II. NARRATIVE
Paralleling the situation in the U.S. market, Canada's aerospace
industry faces difficult challenges throughout the remainder of the
1990s. Analysts agree that the current restructuring trend will
continue as the long-term focus of the industry continues to move away
from defense-related manufacturing. The total defense component of the
Canadian aircraft and parts industry stood at approximately 30 percent
of the total Canadian market in 1994. Consequently, this relatively
high civil component has in part offset the impact on Canadian industry
of a shrinking defense market. In terms of scale, Canadian firms are
typically not as large as their international rivals. The competitive
strengths of Canada's aerospace industry are rooted in its early
conversion from defense to commercial production. The local market is
primarily dominated by several U.S. - owned subsidiaries which produce
parts and components for export. Local production of aircraft is
limited to commuter aircraft, business jets and helicopters.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 2.1 2.2 2.7
B. TOTAL LOCAL PRODUCTION 3.4 3.6 4.4
C. TOTAL EXPORTS 3.2 3.7 4.0
D. TOTAL IMPORTS 1.9 2.1 2.3
E. IMPORTS FROM THE U.S. 1.5 1.7 1.8
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 18
B. NAME OF SECTOR: HOUSEHOLD CONSUMER GOODS
C. ITA INDUSTRY CODE: HCG
PART II. NARRATIVE
Although consumer demand has softened in recent years, gradually
improving market conditions are expected increase Canadian demand for
household consumer goods. With real personal disposable income on the
rise, Canadians, like their U.S. counterparts, will continue to demand a
variety of household consumers goods. Industry experts believe overall
growth in this market will average a real rate of approximately one
percent annually during the 1996 to 1998 period, although individual
product areas are expected to experience significantly more growth.
U.S. manufacturers and suppliers have traditionally dominated Canada's
import market for household consumer goods, and this is expected to
continue. In fact, U.S. manufacturers are expected to increase their
share of Canada's imports in this market due to preferential tariffs
under NAFTA.
Promising Subsectors/Estimated 1995 Total Market Size:
H.S. 8508.80 Tools,hand-held/self-contained electric motor
168
H.S. 8509.80 Electro-mechanical home appliances/self-contained 360
electric motor
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 2,669 2,696 2,802
B. TOTAL LOCAL PRODUCTION 2,136 2,157 2,273
C. TOTAL EXPORTS 1,111 1,138 1,206
D. TOTAL IMPORTS 1,644 1,677 1,735
E. IMPORTS FROM THE U.S. 957 995 1,075
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
B. Best Prospects for Food/Agricultural Products
for U.S. Exporters to Canada
In the five year period ending 1994, U.S. agricultural exports to Canada
increased 31 percent to US$5.5 billion from US$4.2 billion. Most of the
increase over the period was attributable to the growth in exports of
consumer-oriented agricultural products which rose from US$3.0 billion
in 1990 to US$4.1 billion in 1994. The value of exports of U.S. bulk
agricultural products (coarse grains, raw cotton, etc.) to Canada
slipped 5 percent during the same period to US$328 million.
Canadian imports of U.S. high value agricultural products, showed
strong, consistent annual growth following the implementation of the FTA
(now NAFTA) on January 1, 1989. The FTA introduced a timetable for the
phase out of tariffs and in some cases an accelerated move to zero duty.
For most U.S. high value products, Canadian tariffs either are zero or
have been reduced by 70 percent from their pre-FTA levels. On January
1, 1995 Canada implemented agricultural market access provisions of the
World Trade Organization Agreement and converted its import controls on
poultry, dairy, and barley to tariff rate quotas. U.S. exports of these
products to the Canadian market continue to grow at a slower rate than
other food products because over quota exports are assessed high rates
of duty.
The FTA/NAFTA has awakened many small to medium U.S. agricultural
exporters to Canada's easily accessible market. In addition, Canadian
importers and distributors are anxious to source U.S. high value food
products that Canadians have become familiar with through U.S. media
advertising and frequent travel to the United States. Most of the
increase in Canadian imports of U.S. consumer-oriented agricultural
products during 1990-1994 coincided with a steady decline in the value
of the Canadian dollar against the U.S. dollar reflecting the offsetting
benefit that lower FTA tariffs had on the demand for U.S. food products.
1. Fresh Vegetables BP
2. Baked Goods BP
3. Sauces and Condiments BP
4. Breakfast Cereal,Pancake Mix, Dough BP
5. Pet Food (Dog and Cat) BP
6. Sugar Candy and Confectionery BP
7. Chocolate and Chocolate Confectionery BP
8. Snack Food BP
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 1
B. NAME OF SECTOR: FRESH VEGETABLES
PART II. NARRATIVE
Canada is the largest export market for U.S. fresh vegetable sales. The
value of U.S. fresh vegetable exports to Canada in 1995 is expected to
be close to US$800 million, about a 15 percent increase from the year
earlier. Adverse weather conditions in California and related price
hikes particularly for cabbage, broccoli, lettuce and celery will
account for most of the increase. Canadian fresh produce wholesalers
maintain a close relationship with U.S. shippers of horticultural
products. An efficient transportation system results in excellent
accessibility to major Canadian markets. The Canadian growing season
for fresh vegetables is short, enhancing the demand for fresh U.S.
produce throughout the year. On a per capita basis, Canada has one of
the highest consumption rates of fresh vegetables in the world. In
Canadian retail grocery stores, more space is devoted to fresh produce
than to any other food sector. The trend to healthy diets has increased
the demand for fresh vegetables in Canadian retail and food service
markets. Canada applies higher seasonal duties on fresh vegetable
imports during the local marketing season but for perishables they are
in effect for a relatively short period. The duty levels are being
lowered in annual increments under the FTA and will fall to zero by
January 1, 1998.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 1,230 1,350 1,315
B. TOTAL LOCAL PRODUCTION 630 640 640
C. TOTAL EXPORTS 190 200 215
D. TOTAL IMPORTS 790 910 890
E. IMPORTS FROM THE U.S. 672 775 750
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 2
B. NAME OF SECTOR: BAKED GOODS
PART II. NARRATIVE
From 1990-1994 the value of U.S. exports of baked goods to Canada
increased 226 percent. The trend to annual, double digit increase is
expected to continue into 1996. Canada no longer requires import
licenses on wheat and flour products (including bread, buns, bagels,
rolls, pastry, cakes, and muffins) from the United States. Diminishing
tariff rates under the FTA is increasing the competitiveness of U.S.
bakery products in Canada. U.S. fast food chains that expand to Canada
are able to competitively supply their Canadian outlets with bakery
products from U.S. manufacturing centers. Many large Canadian grocery
chains offering house-brand baking products are turning to U.S.
manufacturers for their finished baked goods. Canadian consumers are
demanding a wide range of ready-to-eat baked goods. Independent studies
indicate that a trend to healthier diets has also led to an increase in
consumer demand for indulgence desserts as a reward to healthy main
course choices. As a result, there is a growing demand for many ready-
to-eat U.S. prepackaged bakery products.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 1,945 1,980 2,210
B. TOTAL LOCAL PRODUCTION 1,918 1,930 1,935
C. TOTAL EXPORTS 250 260 265
D. TOTAL IMPORTS 277 310 340
E. IMPORTS FROM THE U.S. 214 240 265
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 3
B. NAME OF SECTOR: SAUCES AND CONDIMENTS
PART II. NARRATIVE
Sauces and condiments are among the fastest growing categories of U.S.
exports of high value foods to Canada. Exports in this sector posted a
217 percent increase during the 1990-1994 period. Reduced tariffs under
the FTA coincided with increased demand in Canada for a wide variety of
U.S. tomato-based sauces and salad dressings. The rise in popularity
of corn chips as a snack food in Canada has spurred increased demand for
U.S. salsa. Likewise, a trend to health conscious eating among
Canadians has led to greater demand for imports of U.S. salad dressings.
Prospects point to further gains in the sector for U.S. exporters into
1996.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 392 425 455
B. TOTAL LOCAL PRODUCTION 300 320 330
C. TOTAL EXPORTS 33 35 35
D. TOTAL IMPORTS 125 140 160
E. IMPORTS FROM THE U.S. 103 120 140
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 4
B. NAME OF SECTOR: BREAKFAST CEREAL, PANCAKE MIX, DOUGH
PART II. NARRATIVE
Led by sales of breakfast cereals, premixed dough and pancake and cake
mixes, U.S. exports in this prepared cereal grain category demonstrated
96 percent growth during the 1990-1994 period. Reduced tariffs under
the FTA, combined with strong demand for U.S. cereal grain products for
the consumer and bakery market point to continued significant increases
for U.S. exports to Canada into 1996.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 510 540 580
B. TOTAL LOCAL PRODUCTION 475 500 530
C. TOTAL EXPORTS 78 85 100
D. TOTAL IMPORTS 113 125 150
E. IMPORTS FROM THE U.S. 110 122 146
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 5
B. NAME OF SECTOR: PET FOOD (DOG AND CAT)
PART II. NARRATIVE
The total market for pet food in Canada showed strong growth throughout
the early 1990s. As a result of accelerated tariff removal under the
FTA, dog and cat food from the United States has entered duty-free since
April 1990. The action, combined with steady demand in Canada for
premium pet and special diet foods, has resulted in U.S. exporters
consistently capturing nearly one-third of Canada's growing pet food
market. In addition to the demand for premium pet foods, the Canadian
market for dog and cat snacks has shown steady growth. More than half of
the Canadian pet food sales are through retail grocery stores, but the
emergence of specialty pet food retail stores has enhanced sales of
premium pet foods. According to a major marketing research company, the
retail sale of pet foods in Canadian grocery stores is split about
evenly between dog and cat food.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 500 535 555
B. TOTAL LOCAL PRODUCTION 400 410 425
C. TOTAL EXPORTS 77 85 90
D. TOTAL IMPORTS 177 202 220
E. IMPORTS FROM THE U.S. 171 202 210
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 6
B. NAME OF SECTOR: SUGAR CANDY AND CONFECTIONERY
PART II. NARRATIVE
Sales of sugar candy and confectionery to Canada grew by 67 percent in
the five-year period ending in 1994. Canadian demand is expected to
push total U.S. sales in the sector to the $100 million level by 1996.
The Canadian sugar candy trade is active, with many medium size
companies serving regional markets with a wide variety of candy from
domestic and imported sources. With lower tariffs under the FTA,
Canadian candy buyers can now source products in the United States that
were formerly protected by prohibitively high rates of duty (averaging
above 15%). U.S. exports in the category are led by sugar candy (not
containing cocoa), bubble gum, and marshmallows. Prospects for future
increases in the U.S. share of the Canadian import market for sugar
candies are bright.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 362 330 395
B. TOTAL LOCAL PRODUCTION 330 330 340
C. TOTAL EXPORTS 85 90 95
D. TOTAL IMPORTS 117 130 150
E. IMPORTS FROM THE U.S. 75 85 100
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 7
B. NAME OF SECTOR: CHOCOLATE AND CHOCOLATE CONFECTIONERY
PART II. NARRATIVE
U.S. exports of chocolate and chocolate confectionery to Canada grew at
more than twice the pace of imports from other suppliers in the five
years following the FTA. Further growth in U.S. sales to Canada is
anticipated into 1996. Of the total category of chocolate and cocoa
foods and preparations, the growth in U.S. sales to Canada is led by
retail chocolate confectionery including boxed chocolates and individual
retail chocolate products.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 1,300 1,340 1,390
B. TOTAL LOCAL PRODUCTION 1,271 1,310 1,350
C. TOTAL EXPORTS 183 190 200
D. TOTAL IMPORTS 212 220 240
E. IMPORTS FROM THE U.S. 108 120 140
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
PART I. BEST PROSPECT SECTOR FOR U.S. EXPORTS AND INVESTMENT
A. RANK OF SECTOR: 8
B. NAME OF SECTOR: SNACK FOOD
PART II. NARRATIVE
Moderately strong growth is forecast for Canada's snack food market into
1996. According to a major market research company, the potato chip
remains the undisputed leader with an estimated market share of about 50
percent, but down slightly from nearly a 55 percent share in 1992. In
recent years, Canadian consumers began to purchase a wider range of
salted snacks, a trend which has benefitted U.S. snack food exporters.
Popcorn leads U.S. snack food exports to Canada, followed by potato
chips. In 1994, U.S. exports of popcorn to Canada reached $26.5
million, nearly double the level of 1990 and the sharpest rate of
increase among snack food sales to Canada. U.S. potato chip sales
showed more modest growth, increasing about 3 percent annually from 1990
to 1994. U.S. sales of pretzels to Canada jumped from $3.6 million in
1990 to $6.7 million during 1994. Growth in U.S. corn chip exports to
Canada averaged almost 10 per year during the 1990-1994 period.
PART III. DATA TABLE
1994 1995 1996
A. TOTAL MARKET SIZE 637 668 688
B. TOTAL LOCAL PRODUCTION 575 600 615
C. TOTAL EXPORTS 2 2 2
D. TOTAL IMPORTS 64 70 75
E. IMPORTS FROM THE U.S. 63 68 73
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
CHAPTER VI. TRADE REGULATIONS AND STANDARDS
A. Trade Barriers
1. General Trade Barriers
As a result of the 1988 U.S.-Canada Free Trade Agreement (FTA), many
Canadian tariffs on U.S. products have been, or will soon be,
eliminated. The North American Free Trade Agreement (NAFTA) removes
some remaining barriers and expands specific provisions of the FTA.
However, non-tariff barriers at both the federal and provincial levels
continue to impede access of U.S. goods and services to Canada or retard
potential export growth. The issues identified below constitute a
partial list of areas which will be addressed in FY96 at post in concert
with USDOC, USTR, State and other Washington agencies.
(a) Standards
The FTA provided that testing facilities, inspection agencies and
certification bodies of each country have access to the accreditation
systems of the other country without obligation to establish facilities
in the other country. While provincial practices do not fall under the
FTA discipline, U.S. government agencies at post and in Washington will
closely monitor provincial requirements and press for fair treatment of
U.S. organizations.
(b) Government Procurement
The NAFTA provides even greater access to the Canadian Government
procurement market through expansion of coverage to Canada's remaining
federal departments, some government-owned enterprises (Crown
corporations) and selected services and construction contracts.
Coverage of government-owned enterprises and services and construction
under the NAFTA represents the first time that such procurement will be
subject to international rules of open and competitive bidding.
Finally, under the NAFTA all three parties have agreed to further
negotiations before the end of 1998 to expand the coverage of the
agreement. This will include coverage at the sub-federal levels.
(c) Provincial Liquor Boards
Canadian provincial government liquor boards have exclusive control over
Canada's alcoholic beverage retail pricing, listing, distribution and
sales. The FTA requires Canadian provinces to accord national treatment
to U.S. wines and spirits in their listing policies and, with certain
well-defined exceptions, their distribution practices. The United
States has questioned several provinces' implementation of these
obligations.
(d) Telecommunications
In response to industry concerns, the U.S. General Accounting Office
(GAO) was asked by Congress to conduct a comprehensive assessment of
whether or not the Canadian market was closed to U.S. telecommunications
equipment exports. Effective March 31, 1994, Bell Canada and Northern
Telecom agreed to cancel their preferred supplier relationship, and the
GAO investigation was therefore not continued. The USTR noted at the
time that, as a result of the change, U.S. exports will have new
opportunities in Canada, and Northern Telecom's U.S. subsidiary will be
eligible for U.S. Government support under the Commerce and State
Departments' export advocacy program.
(e) Services
Services exports constitute the fastest growing component of the U.S.-
Canada bilateral trade relationship, producing a US$15.3 billion export
surplus in 1994.
The NAFTA covers all service sectors unless specifically excluded, and
applies guiding principles to services trade. A party can retain an
existing law, measure, or practice that does not conform to the
agreement's principles, by formally lodging an exception or reservation
for the measure. All federal government reservations were listed during
negotiations and cannot be amended. However, states and provinces must
list nonconforming measures within two years after the NAFTA's entry
into force. Both the Canadian and U.S. governments will be working
closely with their respective sub-federal governments to identify non-
conforming measures. This "barrier inventory" exercise provides an
opportunity to press for further liberalization in services.
NAFTA parties must also remove citizenship requirements affecting the
licensing and practice of professionals within two years of entry into
force of the Agreement. If a state or province fails to remove
citizenship requirements within the allotted time frame, the other
countries have the right to maintain equivalent restrictions in their
own countries.
(f) Prohibition of Special Edition Magazines
Special edition U.S. split run publications (using the same editorial
content but different advertising content) are prohibited from
importation into Canada. Time-Warner, publisher of Sports Illustrated,
is avoiding the ban from importation by electronically transmitting the
magazine which is subsequently printed in Canada. Customs authorities
have no jurisdiction over electronic transmissions.
A Government of Canada task force set up to investigate the special
edition magazines issue recommended that measures be taken to protect
the Canadian magazine industry. On June 20, 1995, legislation was
tabled to impose an 80 percent excise tax on the value of all
advertisements in split run editions.
2. Investment Barriers
Under the Investment Canada Act and related Canadian regulations, Canada
maintains laws and policies which restrict new or expanded foreign
investment in the energy, publishing, telecommunications,
transportation, film, music, broadcasting, and cable television sectors.
(a) Investment Canada Act
The Investment Canada Act requires the federal government to review
proposed acquisitions by U.S. and other foreign investors to ensure "net
benefit to Canada". The Act exempts from prior government approval
foreign investments in new ("greenfield") businesses and smaller
acquisitions (worth less than C$5 million for direct acquisitions and
C$50 million for indirect acquisitions).
Under the FTA, Canada raised the threshold level for review of direct
acquisitions by U.S. investors to C$150 million on January 1, 1992, with
the threshold level to be indexed for inflation in subsequent years.
Under NAFTA, this threshold is further increased in line with real
economic growth. Screening of indirect acquisitions by U.S. investors
was phased out altogether in 1992. The thresholds for reviewing
investors' acquisitions also apply to sales by U.S. investors of their
Canadian investments to third country nationals.
(b) Investments in "Cultural Industries"
The exemption from review does not apply to foreign investments to
establish new businesses or acquire existing ones in "culturally
sensitive sectors" such as newspapers, magazines, periodical and book
publishing and distribution, film and video, audio music recordings, and
music in print or machine readable form. As a result, foreign
investment in these sectors is potentially subject to review regardless
of size or whether the investment is new or through direct or indirect
acquisition. This protection for "cultural industries" will continue to
be an issue for U.S. investors.
In January 1992, Canada announced proposals to amend its book publishing
and distribution policies. Under the new guidelines, Canadian firms
that fall into foreign hands as a result of indirect acquisitions will
not have to be divested to Canadian control, but the foreign investor
will have to negotiate specific commitments to promote Canadian
publishing if it wishes to maintain control. Foreign investors will be
able to acquire directly Canadian book publishing and distribution forms
under limited circumstances that also involve providing guarantees of
benefits to Canada.
The Investment Canada Act also permits special policies on foreign
investment in the film distribution sector. Canadian policies provide
that: takeovers of Canadian-owned and controlled distribution firms
will not be allowed; investment to establish new distribution firms in
Canada will only be allowed for importation and distribution activities
related to proprietary products; and indirect or direct takeovers of
foreign distribution firms operating in Canada will be allowed only if
the investor undertakes to reinvest a portion of its Canadian earnings
in accordance with national and cultural policies.
The Broadcasting Act sets out the broadcasting policy for Canada, which
lists among its objectives, serve to safeguard, enrich and strengthen
the cultural, political, social and economic fabric of Canada. The
federal regulator, the Canadian Radio-television and Telecommunications
Commission (CRTC), is charged with implementing the broadcasting policy.
Under current CRTC policy, in cases where a Canadian service is licensed
in a format competitive with that of an authorized non-Canadian service,
the Commission can drop the non-Canadian service, if the new Canadian
applicant requests it to do so. In June 1994, the CRTC de-listed a U.S.
country music cable-TV service when it licensed a new Canadian specialty
country music channel. While this particular case was resolved when the
parties involved agreed to a commercial settlement, the U.S. Government
remains extremely concerned that the CRTC's competitive services policy
remains in place.
B. Customs Valuation
Canada has acceded to the GATT Customs Valuation Code which provides
that the customs value of imported goods shall be the transaction value
-- the price actually paid or payable for the goods. Under the
transaction value system, the value for duty is the total payment for
the goods made by the buyer to the seller. The transaction value
generally will be accepted by Canada Customs if the goods are sold for
export to Canada and if the price paid or payable for the goods can be
determined. Under the transaction value system, the value for duty of
imported goods will normally be determined from data submitted by the
importer. However, preparation of proper documentation by the exporter
significantly contributes to expeditious entry.
C. Import Licenses
There are no general licenses required for importing goods into Canada.
There are, however, provisions related to a variety of prohibited,
controlled and restricted goods. For more information regarding
restrictions on the importation of these types of goods see the
Prohibited, Restricted, Controlled Goods section below.
D. Export Controls
Canada controls exports under authorization of the Export and Import
Permits Act (EIPA), the Export Control List (ECL) and the Area Control
List (ACL). The ECL is an itemized list of goods subject to export
control. The ACL is a list of specific countries which require export
permits for all goods (whether or not they are on the ECL).
The EIPA utilizes these lists in order to exercise export controls over
natural resources to encourage further processing in Canada; to limit
the export of goods in circumstances of surplus supply or depressed
prices; to restrict the export of softwood lumber products; to ensure
that there is an adequate supply and distribution of any article; to
enact intergovernmental arrangements or commitments, and to ensure that
military or strategic goods are not exported to countries or
destinations representing a strategic threat to Canada.
Under a bilateral agreement with the United States, the requirement for
an export permit to the United States is waived for all goods included
in the ECL except for goods in Groups 3 and 4, as well as some goods in
Group 5. United States origin goods are controlled for re-export from
Canada under Item 5400 of Group 5. All non-strategic U.S. export origin
goods require permits. Exporters may benefit, though, from the
provisions of the General Export Permit No. Ex. 12.
For further information see the annual "Guide to Canada's Export
Controls" published by the Department of Foreign Affairs and
International Trade. The Export Controls Division can be reached by
phone at (613) 996-2387 or by fax at (613) 996-9933, or by mail at the
following address:
Department of Foreign Affairs and International Trade
Export Controls Division (EPE)
Lester B. Pearson Building
125 Sussex Drive - C-4
Ottawa, Ontario
K1A OG2
E. Import/Export Documentation
A properly completed Canada Customs Invoice or its equivalent is
required for all commercial shipments valued over C$1,200 exported to
Canada. In addition to the Canada Customs Invoice, shipments must be
accompanied by a completed exporters Certificate of Origin which is
required in order to obtain specialized tariff treatment under the
provisions of the NAFTA. For details regarding documentation
requirements or to obtain sample invoices, and other forms, contact
Revenue Canada.
F. Temporary Entry
Revenue Canada has made specific provision for the temporary entry of
certain goods into Canada for various purposes such as testing,
demonstration, and display. Such goods may enter under an ATA
(Admission Temporaire -- Temporary Admission) Carnet or under a
Temporary Admission Permit (Revenue Canada, Customs and Excise Form
E29B) and may require either a refundable deposit or a proportional duty
deposit, depending on the appropriate classification determined by
Canadian customs regulations. Firms wishing to bring machinery and
equipment, display equipment, and other items covered under Canadian
temporary importation regulations are advised to contact Revenue Canada
well in advance of shipment or arrival in Canada.
G. Labelling, Marking Requirements
The three main pieces of legislation which regulate almost all product
labelling and marking in Canada include: the Consumer Packaging and
Labelling Act; the Weights and Measures Act; and the Agricultural
Product Standards Act. Canada requires bilingual labelling (English and
French) for most products. Bilingual designation of the generic name on
most prepackaged consumer products is required by the federal Consumer
Packaging and Labelling Act identified above. Under this act the
following information must appear on the label of a consumer good sold
in Canada:
Product Identity Declaration -- describes a product's common or
generic name, or its function. The declaration must be in both English
and French;
Net Quantity Declaration -- should be expressed in metric units of
volume, when the product is a liquid, gas, or is viscous; or in metric
units of weight, when the product is solid; or by numerical count. Net
quantity may be expressed in other established trade terms.
Dealer's Name and Principal Place of Business -- where the pre-
packaged product was manufactured or produced for resale. In general, a
name and address sufficient for postal delivery is acceptable. The
declaration should be in both English and French.
The agency responsible for inspection of imports, Canada Customs, also
requires an indication of the country of origin, such as "Made in the
USA" on several classes of imported goods and on all printed matter.
Goods not properly marked cannot be released from Customs until suitably
marked. The goods can be marked, at the importer's expense, either on
Canada Customs premises or on the importer's own premises under the
supervision of Canada Customs officials. Moreover, Canadian regulations
require that declarations of net content of all packaged consumer goods
be stated in metric units in both English and French, although British
or imperial units may also be shown. Most products may be packaged in
random English measure size containers with the metric equivalents
expressed on the label. However, specified metrically dimensioned
packaging is required for some products, mainly foods, personal care
products, and detergents.
The Province of Quebec requires that all products sold in that province
be labelled in French and that the use of French must be given equal
prominence with other languages on any packages or containers sold in
Quebec stores. The Charter of the French Language requires the use of
French on product labelling, warranty certificates, directions for use,
public signs and written advertising. Further information on French
labelling requirements is available from the Office de la Langue
Francaise.
Finally, with respect to the use of environmental claims, industry is
charged with ensuring that any environmental claims are accurate and in
compliance with relevant legislation. In general, environmental claims
that are ambiguous, vague, incomplete, misleading, or irrelevant and
that cannot be substantiated through credible information and/or test
methods should not be used. In all cases, environmental claims should
indicate whether they are related to the product itself or to the
product's packaging materials. The Canadian government has issued a set
of guiding principles governing the use of environmental labelling and
advertising which may be obtained by contacting Industry Canada -- see
contact list.
H. Prohibited Imports
The majority of U.S. products shipped to Canada enter the market free
from any import restrictions. However, under the provisions of the
Canadian Customs Tariff regulations certain commodities cannot be
imported such as oleomargarine, reprints of Canadian copyrighted work,
and some game birds. Other goods are controlled, regulated, or
prohibited under legislation falling within the jurisdiction of other
government departments. Examples of regulated goods include: food
products, clothing, drug and medical devices, hazardous products, some
offensive weapons and firearms, endangered species, and motor vehicles.
Other items are regulated under the Export and Import Permits Act and
require an import permit or certificate to be eligible for importation
into Canada. The Act lists various agricultural products, a number of
clothing and textile items, and certain steel products. Goods
originating in certain countries such as Haiti and Iraq cannot be
imported into Canada. Enquiries regarding the issuance of import
permits or certificates and quota allocations should be directed to the
Department of Foreign Affairs, Export and Import Permits Bureau.
I. Standards
Canada's standards are not identical to those in the United States.
This does not mean that Canadian standards are more or less stringent
than those in the United States, merely that they are different. Like
the U.S. government, the Canadian government is concerned with
protecting its citizens from faulty or unsafe products. However, in
delineating the precise technical specifications that are required to
ensure that safety, the two countries often use slightly different
standards.
Under the aegis of the Standards Council of Canada (SCC), several
private standards-writing organizations administer technical codes and
standards for areas ranging from electrical and plumbing products to
health care technology. These organizations include:
The Canadian General Standards Association
Underwriter's Laboratories of Canada
The Canadian General Standards Board
The Canadian Gas Association
The Canadian federal government also has numerous commodity standards to
safeguard the public welfare. The standards organizations try to avoid
duplication of responsibility, but there is some overlap.
U.S. manufacturers and exporters should determine what standards are
applicable to their products. If certification is required, it
generally must be obtained before the goods are imported into Canada.
The process can be time-consuming, therefore certification should be of
the first steps taken in establishing and export market in Canada.
Information on which standards or organization(s) administer standards
applicable to the firm's product can be obtained from the Standards
Council of Canada.
Standards and the NAFTA: The basic NAFTA rule is simple -- standards
must not create unnecessary barriers to trade. To reduce such barriers,
the NAFTA applies basic principals to bilateral trade:
(a) testing facilities and certification bodies are treated in a
nondiscriminatory manner
(b) federal standards related measures will be harmonized to the
greatest extent possible
(c) greater openness will be provided in the regulatory process.
Greater standards compatibility removes structural barriers to the
Canadian and U.S. markets and increases the competitiveness of the U.S.
and Canadian manufacturers. Significant progress toward greater
compatibility between U.S. and Canadian technical standards is taking
place under the aegis of the NAFTA.
Standards organizations in the United States and Canada continue to work
cooperatively in the development of joint standards and have made
progress in several areas. For example, the Air Conditioning and
Refrigeration Institute (ARI) and the CSA have harmonized performance
standards for air conditioners and heat pumps, packaged water chillers,
and water-source heat pumps. Underwriters Laboratories (UL) and CSA
have established common electrical safety standards for air
conditioners, heat pumps, and refrigerant motor-compressors.
During 1992, two U.S. testing and certification organizations, UL and
the American Plywood Association (APA), received accreditation in
Canada. Also in 1992, the Canadian Standards Association (CSA) was
officially recognized by the U.S. Occupational Safety and Health
Administration (OSHA) as a Nationally Recognized Testing Laboratory.
SCC and OSHA accreditations mean U.S. manufacturers can gain product
approval for both the United States and Canada from one source, thereby
eliminating the time and expense of pursuing separate certification for
each market. Several other U.S. testing and certification organizations
have accreditation applications pending before the SCC.
The NAFTA strengthens FTA technical standards obligations; expands
coverage to include Mexico; sets up a committee on standards-related
measures; establishes an Automotive Standards Council; identifies
specific products for standards harmonization efforts through the
creation of subcommittees on land transportation and telecommunications
standards, and on labelling of textiles and apparel goods.
J. Free Trade Zones/Warehouses
Goods may be cleared at customs ports on the border or, if intended for
inland destinations, may be forwarded in bonded carriers to the port
city nearest the destination at which customs examination may be made
and duties and taxes paid. With the exception of one special trade zone
at the Sydport Industrial Park in Cape Breton, Nova Scotia, Canada has
no free ports or free trade zones. At present, there are no federal or
provincial laws specifically governing the establishment and operation
of such zones. Sufferance warehouses under private ownership have been
established for the storage and deposit of all imports received by
various transportation modes, pending customs examination and clearance.
An entry for consumption or into bonded warehouse must be presented to
Customs within 30 days. Goods may be entered into customs bonded
warehouses without the payment of duty but must be cleared either for
export or Canadian consumption within two years. Additional periods are
provided for certain goods by regulation.
Goods taken from bonded warehouses for consumption are dutiable at rates
of the Customs Tariff then in effect, and the value for duty purposes is
the value at the time of entry for warehousing. Goods exported from
bonded warehouses to third countries are subject to Canadian export
regulations. Repacking and sorting can be carried out in customs bonded
warehouses with the permission of Canada Customs, but assembly or other
industrial activity is prohibited.
K. Special Import Provisions
Canada's special import provisions deal with the temporary importation
of goods, as described previously in this Chapter, in Section G.
L. Membership in Free Trade Arrangements
The FTA, implemented in 1989, created vast opportunities for U.S.
exporters and investors in Canada. As a result of the FTA, trade
barriers have come down, investment rules have been liberalized, and
bilateral cooperation on a wide range of issues has been expanded. The
FTA has since been enhanced further through the implementation of the
NAFTA which took effect on January 1, 1994. This historic Agreement
brings Mexico into the North American free trade area and expands the
scope of the FTA in some key areas. For example, the NAFTA contains
provisions relating to intellectual property, land transportation and
the environment, which were not provided for in the FTA. Many of the
improvements to the FTA, now reflected in the NAFTA, are the direct
result of experience gained by the United States and Canada in
implementing that bilateral accord. Since the FTA has served as the
model for the NAFTA, many U.S. firms who are already familiar with the
FTA are well positioned to reap early benefits from the NAFTA.
Like the United States, Canada is a member of the World Trade
Organization (WTO) and was a founding member of its predecessor, the
General Agreement on Tariffs and Trade (GATT).
CHAPTER VII. INVESTMENT CLIMATE
With few exceptions, Canada offers foreign investors full national
treatment within the context of a developed open market economy
operating with democratic principles and institutions. Canada is,
however, one of the few OECD countries that still has a formal
investment review process, and foreign investment is prohibited or
restricted in several sectors of the economy.
Canada's economic development has depended a great deal on foreign
investment inflows. Four foreign-owned firms rank among the top ten
firms in Canada in terms of revenue, and the Canadian government
estimates that foreign investors control about one-quarter of total
Canadian non-financial corporate assets. The stock of foreign direct
investment in Canada in 1994 was equivalent to 20 percent of GDP. Net
foreign direct inflows in 1994 amounted to roughly one percent of GDP.
Canada has no restriction on outward foreign investment, and Canadian
firms have a significant presence in the United States
Since the beginning of 1994, investment relations between the United
States and Canada have been governed by the NAFTA negotiated by the
United States, Canada and Mexico. The FTA, which entered into force at
the beginning of 1989, has been suspended as long as the two countries
remain parties to the NAFTA. The NAFTA builds on the investment
relationship created in the FTA. In the FTA, the United States and
Canada agreed on important foreign investment principles, including
right of establishment and national treatment. The FTA recognized that
a hospitable and secure investment climate was indispensable if the two
countries were to achieve the full benefits of reducing barriers to
trade in goods and services.
The FTA established a mutually beneficial framework of investment
principles sensitive to the national interests of both countries, with
the objective of assuring that investment flowed freely between the two
countries and that investors were treated in a fair and predictable
manner.
The FTA provided higher review thresholds for U.S. investment in Canada
than for other foreign investors, but it did not exempt all U.S.
investment from review nor did it override specific foreign investment
prohibitions, notably in the cultural area. The NAFTA incorporates the
gains made in the FTA, expands the coverage of the Investment Chapter to
several new areas and broadens the definition of investors with rights
under the agreement, and creates the right to binding investor-State
dispute settlement arbitration under limited circumstances.
A. Openness to Foreign Investment
1. General Attitude
Canada has long been considered a stable and remunerative environment
for foreign investment, and its economic progress has been made possible
to a large extent by a sustained inflow of foreign capital. Since 1985,
foreign investment policy in Canada has been guided by the Investment
Canada Act which replaced the more restrictive Foreign Investment Review
Act. The Investment Canada Act liberalized Canadian policy on foreign
investment by recognizing that investment is central to economic growth
and new employment opportunities and is the key to technological
advancement. At the same time, it provided for a review of large
acquisitions in Canada by non-Canadians and imposed a requirement that
they be of net benefit to Canada. For the vast majority of small
acquisitions and the establishment of new businesses, non-Canadian
investors need only notify the Canadian government of their investment.
While the Investment Canada Act provides the basic legal framework for
foreign investment in Canada, foreign investment in specific sectors may
be covered by special legislation. For example, foreign investment in
the financial sector is governed by laws administered by the federal
Department of Finance, and the Broadcast Act governs foreign investment
in radio and TV broadcasting. Under provisions of Canada's new
Telecommunications Act, foreign ownership of transmission facilities is
limited to 20 percent, while in the case of holding companies that wish
to invest in Canadian carriers, two-thirds of the holding company's
equity must be owned and controlled by Canadians.
Canada's federal system of government subjects investment to provincial
as well as national jurisdiction. Provincial restrictions on foreign
investment differ by province, but are largely confined to the purchase
of land and to certain types of provincially-regulated financial
services. In addition, provincial government policies in the areas of
labor relations and environmental protection, for example, can have an
important impact on foreign investors.
2. Investment Canada Act
Under the Investment Canada Act, the Minister of Industry is responsible
for encouraging and facilitating investment and assuring that foreign
investment is of net benefit to Canada. To this end, the federal
department known as Industry Canada manages the foreign investment
notification and review process to ensure conformity with the
legislation.
What is reviewable?
Where control of a foreign investor ultimately rests in a country that
is a member of the World Trade Organization (WTO), the direct
acquisition of control of a Canadian business that has assets of C$160
million or more is a reviewable transaction. Where control of the
foreign investor is ultimately in a country that is not a WTO member,
the direct acquisition of control of a Canadian business that has assets
greater than C$5 million is reviewable, and the indirect acquisition of
control of a Canadian business with assets greater than C$50 million is
reviewable. As a result of Canada's implementation of its Uruguay Round
commitments, NAFTA treatment was extended to all WTO investors in all
sectors except those excluded under the NAFTA.
Acquisitions in cultural industries (i.e., publication and distribution
of books, magazines, videos, music recordings, etc.) below the
thresholds listed above and the establishment of new businesses in these
cultural industries may be reviewable if the federal government so
decides. Acquisitions in which the Canadian business is in one of three
other sectors (financial services other than insurance, transportation
services and uranium production) are subject to the lower thresholds
regardless of nationality of the investor.
If the transaction is not reviewable, does the government require
anything from the Investor?
Yes, in the case of a direct acquisition of a Canadian business with
assets under C$160 million by a WTO-investor, or under C$5 million in
the case of a foreign, non-WTO investor, the investment is notifiable.
All indirect acquisitions by WTO investors are notifiable as are
indirect acquisitions by non-WTO investors where the Canadian assets to
be acquired are less than C$50 million.
Also notifiable is the establishment of a new business in Canada by an
investor making its first investment in Canada or the establishment of a
new business by an existing investor where the new business is unrelated
to any existing business in Canada. In these cases, the investor must
notify Industry Canada and provide some details of the investment. For
convenience, investors can use a 2-page Notification Form.
What is not reviewable or notifiable?
There are many types of investments to which the Investment Canada Act
does not apply. For example, purchases of Canadian bonds, stocks or
other investment instruments that do not involve the acquisition of
control are not reviewable or notifiable, nor are the acquisition of
assets that do not constitute a business. Investments in related
businesses are neither reviewable nor notifiable. Thus, for example, a
manufacturing business can expand a plant or a mining company can open a
new mine, without either review or notification. For greater certainty,
investors and others should consult Section 10 of the Investment Canada
Act.
How are the thresholds set?
For WTO investors, the review threshold is adjusted annually to reflect
economic growth and inflation in Canada. For non-WTO investors, the
review thresholds are fixed.
On what basis are investments reviewed?
Reviewable investments are allowed to proceed if they are likely to be
of net benefit to Canada. Set out below are the six factors of net
benefit:
(a) The effect of the investment on the level and nature of
economic activity in Canada, including the effect on employment;
resource processing; on the utilization of parts, components and
services produced in Canada; and on exports from Canada;
(b) The degree and significance of participation by Canadians
in the Canadian business and in any industry in Canada of which it forms
a part;
(c) The effect of the investment on productivity, industrial
efficiency, technological development, product innovation and product
variety in Canada;
(d) The effect of the investment on competition within any
industry or industries in Canada;
(e) The compatibility of the investment with national and
provincial industrial, economic and cultural policies; and,
(f) The contribution of the investment to Canada's ability to
compete in world markets.
Who makes the decision on whether an investment can proceed?
Industry Canada makes a recommendation to the Minister of Industry, who
in turn, makes the final decision. Since the passage of the Investment
Canada Act in 1985, the Canadian Government has not formally rejected
any reviewable foreign investment proposal. On several occasions the
government required the foreign investor to re-work the proposal to meet
Investment Canada's net benefit test. The mere existence of a review
process, as well as SECTORAL restrictions, presumably discourages some
foreign investors.
How long does the review process take?
The legislation gives the Minister an initial 45 days to make a
decision. Most cases are decided within this time frame. However,
there are provisions in the legislation to extend the review period.
World Trade Organization (WTO) Countries as of January 1, 1995
Antigua & Barbuda EC Lesotho Romania
Argentina Finland Luxembourg St. Lucia
Australia France Macau St.Vincent & the
Grenadines
Austria Gabon Malaysia Senegal
Bahrain Germany Malta Singapore
Bangladesh Ghana Mauritania Slovak Republic
Barbados Greece Mauritius South Africa
Belgium Guyana Mexico Spain
Belize Honduras Morocco Sri Lanka
Botswana Hong Kong Myanmar Surinam
Brazil Hungary Namibia Swaziland
Brunei Darussalam Iceland Netherlands Sweden
Canada India New Zealand Tanzania
Chile Indonesia Nigeria Thailand
Columbia Ireland Norway Uganda
Costa Rica Italy Pakistan United Kingdom
Cote d'Ivoire Japan Paraguay United States
Czech Republic Kenya Peru Uruguay
Denmark Korea Philippines Venezuela
Dominia Kuwait Portugal Zambia
3. Special Treatment for U.S. Investment
U.S. foreign investment in Canada is subject to the Investment Canada
Act, but the NAFTA further defines the investment relationship between
the two countries and adopts the principle of national treatment.
The basic obligation assumed by the two countries in Chapter Eleven of
the NAFTA is to ensure that future regulation of Canadian investors in
the United States and of U.S. investors in Canada results in treatment
no different than that extended to domestic investors within each
country -- "national treatment." Both governments are completely free
to regulate the ongoing operation of business enterprises in their
respective jurisdictions under, for example, anti-trust law, provided
they do not discriminate. This basic principle is qualified on the
basis of existing practice and is translated into the following specific
undertakings:
Canada retains the right to review the acquisition of firms in Canada by
U.S. investors, but agreed to phase in higher threshold levels for U.S.
investors. For 1992 and thereafter (adjusted for inflation) the review
threshold for direct acquisitions is C$150 million; the review threshold
for indirect acquisitions was phased out entirely beginning in 1992.
Canada agreed to extend these review thresholds for the acquisition of
service-sector firms to all signatories of the General Agreement on
Trade in Services.
These undertakings are prospective; for example, they apply to future
changes in laws and regulations only. Existing laws, policies and
practices are "grandfathered", except where specific changes are
required. The practical effect of this was to freeze the various
exceptions to national treatment provided in Canadian and U.S. law (such
as restrictions on foreign ownership in the communications and
transportation industries). Additionally, both governments remain free
to tax foreign-owned firms on a different basis than domestic firms,
provided this does not result in arbitrary or unjustifiable
discrimination, and to exempt the sale of crown (government-owned)
corporations from any national treatment obligations. Finally, the two
governments retain some flexibility in the application of the national
treatment obligations. They need not extend identical treatment, as
long as the treatment is "equivalent."
The NAFTA also deals more specifically with the financial services
sector. Chapter Fourteen on financial services eliminates
discriminatory asset and capital restrictions on U.S. bank subsidiaries
in Canada. It also exempts U.S. firms and investors from the federal
"10/25" rule such that they will be treated the same as Canadians. The
rule continues to prevent any single non-U.S. non-resident from
acquiring more than ten percent of the shares, and all such non-
residents in the aggregate from acquiring more than 25 per cent of the
shares of a federally-regulated Canadian-controlled financial
institution. Both the ten percent and the 25 percent limitation were
eliminated for U.S. investors as regards acquisitions of federally-
chartered non-bank financial institutions. Several provinces, however,
including Ontario and Quebec, have similar "10/25" rules for
provincially-chartered trust and insurance companies which were not
waived under the FTA. The ten percent limitation on any individual
shareholder -- whether Canadian or foreign -- will continue to apply to
investments in Canadian banks.
Bilateral services trade is largely free of restrictions. The NAFTA
ensures that restrictions will not be applied in the future; however,
existing restrictions were not affected by the NAFTA. The services
agreement is primarily a code of principles which establishes national
treatment, right of establishment, right of commercial presence, and
transparency for a number of service sectors specifically enumerated in
Annexes to the NAFTA. The NAFTA also pledges both parties to expand the
list of covered service sectors.
The NAFTA grants U.S. firms operating from the U.S. national treatment
for most Canadian federal procurement opportunities. However,
INTERPROVINCIAL trade barriers exist which often exclude U.S. firms
established in one Canadian province from bidding on another province's
procurement opportunities. However, as a first step in the ongoing and
difficult process or reducing trade barriers within Canada, the federal,
provincial and territorial governments negotiated an Internal Trade
Agreement in 1994 that came into effect on July 1, 1995. The Agreement
provides a framework for dealing with trade in ten specific sectors and
establishes a formal process for resolving trade disputes. The
structure of the Agreement was inspired by the models provided by GATT,
the FTA and the NAFTA.
Besides the areas described above, the NAFTA includes provisions that
enhance the ability of U.S. investors to enforce their rights through
international arbitration; prohibit a broader range of performance
requirements, including forced technology transfer; and expand coverage
of the investment chapter to include portfolio and intangible
investments as well as direct investment.
4. Ownership Restrictions by Sector
Although most sectors of the Canadian economy are open to foreign
investment, there are several sectors where foreign investment is
limited or prohibited. In addition, there are several sectors where
private investment is not permitted at all. Two sectors subject to
special investment rules of particular concern to U.S. investors are
cultural industries and financial services.
(a) Cultural Industries
Canada's fear that its own cultural identity will be overwhelmed by
neighboring and powerful U.S. cultural influences has resulted in
restrictions on foreign investment in Canadian cultural industries. At
Canada's insistence, cultural industries were exempted from the
provisions of the FTA, but the United States also obtained the right to
take measures of "equivalent commercial effect" against measures which
would have been inconsistent with the FTA except for the cultural
exemption. Both of these features were retained in the NAFTA.
Book publishing and distribution: Since 1985, foreign investment in the
book publishing and distribution sector has been governed by the "Baie
Comeau" policy. Under this policy, direct foreign acquisitions of
Canadian-owned firms in this sector were forbidden, new foreign
investment was limited to a minority position, and foreign investors who
acquired Canadian firms in the sector through an indirect acquisition
were required to divest the Canadian operation to Canadian ownership
within two years.
In January 1992, the government of Canada modified the Baie Comeau
policy. Now, indirectly-acquired Canadian firms in the sector will not
necessarily have to be spun off to Canadian ownership; the foreign owner
was given the option of negotiating a transaction that is of "net
benefit" to Canada, such as a commitment to publish Canadian authors.
In addition, the policy now permits direct foreign acquisition of a
Canadian firm in the sector, provided that the firm is in financial
distress and no Canadian buyers can be found. Finally, the government
announced its intention to establish rules to assure that when
indirectly acquired firms are divested as a result of the Baie Comeau
policy, Canadians assume de facto control of the enterprise.
Newspapers and periodicals: All investments in this sector, regardless
of size, are reviewable by Investment Canada. Canadian income tax laws
do not permit Canadian advertisers to claim a deduction for advertising
placed in publications that do not have 75 percent Canadian ownership
and 85 percent Canadian content. In 1993 the Canadian government ruled
that any new foreign magazine title published in Canada would be
reviewable as a new investment. Under current policy guidelines,
approval would be denied. On June 20, 1995 the Canadian government
introduced legislation to place a prohibitive tax on advertising in
magazines published in Canada with Canadian advertising but little
Canadian editorial content ("split-run" editions).
Television and Radio Broadcasting: Licenses will not be granted or
renewed to firms that do not have at least 80 per cent Canadian control,
represented both by shareholding and by representation on the Board of
Directors. This requirement applies retroactively.
Cable Television and Other Broadcast Services: Under current policy, in
cases where a Canadian service is licensed in a format competitive with
that of an authorized non-Canadian service, the Canadian Radio-
Television and Telecommunications Commission (CRTC) can drop the non-
Canadian service, if the new Canadian applicant requests it to do so.
In June 1994, the CRTC de-listed a U.S. country music cable-TV service
when it licensed a new Canadian specialty country music channel. While
this particular case was resolved when the parties involved agreed to a
commercial settlement, the U.S. Government remains extremely concerned
that the CRTC's competitive services policy remains in place.
Sound Recording: All investments reviewable.
Film and Video: All investments reviewable; new investments may be
subject to performance requirements.
(b) Financial Sector
The banking industry in Canada is governed by the federal Bank Act,
which imposes a number of limitations on foreign direct investment in
this sector. The Bank Act establishes two categories of banks:
Schedule I banks, in which no single investor can own more than ten
percent of the shares, thus excluding the possibility of a foreign
acquisition; and Schedule II banks, for which the ten percent
restriction does not apply. A foreign bank wishing to conduct business
in the Canadian banking industry must establish as a subsidiary
(Schedule II bank); it cannot enter as a direct branch. The Bank Act
also requires that any Schedule II bank in Canada with more than C$750
million (approximately US$600 million) in capital must be "widely-held",
therefore, at least 35 percent of its shares must be publicly traded on
Canadian stock exchanges. The government could grant an exception to
foreign-owned banks which exceed the ceiling due to internal growth.
Finally, the Bank Act imposes several restrictions on investments by
non-U.S. foreign banks, including an individual capital ceiling and a 12
percent market-share quota on assets.
Foreign insurance companies, unlike banks, may operate in Canada as
branches.
(c) Other Sectors
Commercial Aviation: Foreigners are limited to 25 percent ownership of
Canadian air carriers.
Energy and Mining: Foreigners cannot be majority owners of uranium
mines.
Telecommunications: Under provisions of Canada's new Telecommunications
Act, foreign ownership of Type I carriers (owners/operators of
transmission facilities) is limited to 20 percent. Ownership and
control rules are more flexible for holding companies that wish to
invest in Canadian carriers, because of the often international nature
of their operations and sources of capital. Under these rules, two-
thirds of the holding company's equity must be owned and controlled by
Canadians.
Fishing: Foreigners can only own 49 percent of companies that hold
Canadian commercial fishing licenses.
Electric Energy Generation and Distribution: In all provinces except
Alberta and Nova Scotia, this is a provincial monopoly. Exceptions are
being opened in some provinces to allow for private electric energy
production, either through co-generation or non-utility power
generation.
Health Services: Hospitals in Canada are integral parts of a public
health system administered by the provinces. Private hospitals would
not be eligible to receive payments from provincial health insurance
funds, and therefore would not be financially viable in most cases.
Real Estate: Prince Edward Island and Saskatchewan limit real estate
sales to out-of-province parties.
Privatization: Each specific privatization (at the federal provincial
levels of government) is considered on a case-by-case basis and there is
no overall limitations policy with regard to foreign ownership. As an
example, the federal Minister of Transport has stated he does not intend
to impose any limitations in the privatization of Canadian National (CN)
railway.
5. Investment Incentives
Both federal and provincial governments in Canada offer a wide array of
incentives (municipalities are legally prohibited from offering tax
incentives). None of the federal incentives, however, is specifically
aimed at promoting or discouraging foreign investment in Canada.
Rather, the incentives are designed to accomplish broader policy goals,
such as research and development, investment in machinery and equipment,
and promotion of regional economies. They are available to any
qualified investor, Canadian or foreign, who agrees to use the funds for
the stated purpose.
Provincial incentives tend to be more investor-specific and are
conditioned on applying the funds to an investment in the granting
province. Provincial incentives may also be restricted to firms
established in the province or who agree to establish in the province.
Incentives for investment in cultural industries, at both the federal
and provincial level, are generally only available to Canadian-
controlled firms.
Incentives may take the form of grants, loans, loan guarantees, venture
capital, or tax credits. Incentive programs in Canada generally are not
oriented toward the promotion of exports.
6. Export/Import Policies
There is no discrimination against foreign investors in any aspect of
import or export trade. Foreigners can engage in all import and export
activities permitted to a Canadian national. However, permits are
required for the import or export of certain commodities, including
armaments and strategic goods, some agricultural products, most textile
and clothing items, and oil and gas.
B. Conversion and Transfer Policies
The Canadian dollar is fully convertible. Canada has no restrictions on
the movement of funds into or out of the country. Banks, corporations
and individuals are able to deal in foreign funds or arrange payments in
any currency they choose. An investor may liquidate his Canadian
investment at any time and transfer the proceeds from Canada in whatever
currency desired. During the life of the investment, profits, dividends
and royalties may be remitted at will.
C. Expropriation and Compensation
Canadian federal and provincial laws recognize both the right of a
government to expropriate private property for a public purpose, and the
obligation to pay compensation. The federal government has not
nationalized any foreign firm since the nationalization of Axis property
during World War II. Both the federal and provincial governments have
also assumed control of private firms -- usually financially-distressed
ones -- after reaching agreement with the former owners.
D. Dispute Settlement
Canada is a member of the New York Convention of 1958 on the Recognition
and Enforcement of Foreign Arbitral Awards. The Canadian government has
made a decision in principle to become a member of the International
Center for the Settlement of Investment Disputes (ICSID). However,
since the legal enforcement mechanism for ICSID would be the provincial
court system, the federal government must also get agreement from all
the provinces that they will respect ICSID decisions. It is unlikely
that this will happen in the foreseeable future.
Canada accepts binding arbitration of investment disputes to which it is
a party only when it has specifically agreed to do so through a
bilateral or multilateral agreement such as a Foreign Investment
Protection Agreement. The resolution of investment disputes between the
United States and Canada is guided by the provisions of the NAFTA
Chapter 11.
The NAFTA encourages parties to settle disputes through consultation or
negotiation, but the NAFTA also establishes special arbitration
procedures for investment disputes separate from the NAFTA's general
dispute settlement provisions (Chapter 20). Under the NAFTA, a narrow
range of disputes between an investor from a NAFTA country and a NAFTA
government (those dealing with government monopolies and expropriation)
may be settled, at the investor's option, by binding international
arbitration. An investor who seeks binding arbitration in a dispute
with a NAFTA party gives up his right to seek redress through the court
system of the NAFTA party.
E. Political Violence
Political violence is almost non-existent in Canada. There has been no
violence directed at foreign investment in recent memory. There have
been some violent incidents related to environmental disputes, but these
were directed against Canadian-owned natural resource companies or
against the Canadian government.
F. Performance Requirements/Incentives
Canada does not explicitly negotiate performance requirements with
foreign investors. For investments subject to review, however, the
investor's intentions regarding employment, resource processing,
domestic content, exports, and technology development or transfer can be
examined by the Canadian Government. A special duty remission scheme
exists for the automotive sector that makes certain benefits contingent
on trade performance. The FTA prohibits the United States or Canada
from imposing export or domestic content performance requirements.
Government officials at both the federal and provincial levels expect
investors who receive investment incentives to use them for the agreed
purpose, but no mechanism exists for enforcing any statement made by the
investor during the review process.
G. Right to Private Ownership and Establishment
Except as noted, Canadians and foreigners have the right to establish,
own and dispose of business enterprises and engage in all forms of
remunerative activity. In those sectors where private enterprise co-
exists with public enterprise (for example, petroleum), the firms
compete on a generally equal basis. The major exception is that public
enterprises do not have to rely solely on self-generated funds or funds
raised in the capital markets; they also have access to transfers from
government budgets.
H. Protection of Property Rights
Private property rights are fully protected by Canada's legal system.
Foreigners have full and fair access to Canada's legal system. Property
rights are limited only by the rights of governments to establish
monopolies and to expropriate for a public purpose.
I. Regulatory System: Laws and Procedures
Canada's regulatory system is similar to that of the United States in
terms of its transparency, comprehensiveness and in the array of
institutions involved. Proposed laws are subject to parliamentary
debate and public hearings. Regulations are issued in draft form for
public comment prior to implementation. The allocation of financial and
real resources is generally accomplished by market forces rather than
regulation. While federal and/or provincial licenses or permits may be
needed to engage in economic activities, this kind of regulation is
generally for prudential, statistical or tax compliance reasons rather
than for resource allocation. Governments enter into the allocation of
resources only in those sectors where resources are located in the
public domain, such as logging on public land or commercial fishing.
Canada has an anti-trust law and an agency, the Bureau of Competition
Policy, to enforce it. The Competition Tribunal, a quasi-judicial body,
rules on anti-trust cases.
J. Bilateral Investment Agreements
While the terms of the FTA and the NAFTA guide investment relations
between the United States and Canada, Canada has two kinds of
international investment agreements with non-NAFTA parties, Foreign
Investment Protection Agreements (FIPA's) and Foreign Investment
Insurance Agreements (FIIA's). A FIPA is a comprehensive bilateral
investment promotion and protection agreement containing, inter alia,
the broad principles that should guide investment between the two
partners. Canada negotiated five FIPA's under a 1988 model, with
Poland, Czechoslovakia, Hungary, USSR, and Argentina. While these
agreements continue in force (for Russia only in the case of the former
Soviet Union), the model was revised in 1994 to bring it into conformity
with the NAFTA. Agreements under the new model have been signed with
Ukraine and Latvia, and agreement has been reached with several
additional countries on new FIPA's under the 1994 model, although they
have not yet been signed.
FIIA is essentially an agreement that allows the Export Development
Corporation (EDC) to pursue any claims arising from a Canadian
investment insured by the EDC. Canada has signed 42 FIIA's, and others
are awaiting final confirmation. Canada also has tax agreements with 55
countries, including the United States.
K. OPIC and Other Investment Insurance Programs
Overseas Private Investment Corporation (OPIC) programs are not
available for U.S. investors in Canada. Canada is a signatory to the
World Bank's Multilateral Investment Guarantee Agency (MIGA). The
Export-Import Bank is not off-cover for Canada.
L. Labor
Labor, at all skill levels, is generally available in Canada. There are
occasional reports of spot shortages of certain categories of labor.
Canadian wage and benefit levels for most non-executive job categories
are roughly equivalent to levels paid in the United States. Currently,
provincial hourly minimum wages in Canada range from a high of C$6.70 in
Ontario to a low of C$4.75 in Newfoundland and Prince Edward Island.
The minimum wage for employees under federal jurisdiction (banking,
shipping, air transport, broadcasting, railways, grain elevators and
pipelines) has remained unchanged at C$4 since 1986.
As a percentage of the civilian labor force, union membership has
remained fairly constant since 1985 when it stood at 29.8 percent. The
figure for 1993 is 29.5 percent, significantly higher than the
comparable U.S. figure of 15.8 percent, due in large part to higher
unionization levels in the Canadian public sector.
Labor is strongly critical of some Canadian government policies and has
focused most strongly on the FTA and the NAFTA, alleging that these
agreements jeopardize Canadian jobs and threaten the country's social
programs. The labor movement in Canada is closely associated with the
New Democratic Party (NDP). The NDP currently controls provincial
governments in Ontario, British Columbia and Saskatchewan.
M. Foreign Trade Zones/Free Ports
Detailed information regarding foreign trade zones/free ports can be
found in Chapter VI, Section J.
N. Capital Outflow Policy
As discussed in the "Transfer Policy" section, the Canadian dollar is
fully convertible. The Canadian Government provides some incentives for
Canadian investment in developing countries through Canadian
International Development Agency programs. Canada's official export
credit agency, the EDC provides OPIC-like insurance coverage for
Canadian foreign investment.
O. Major Foreign Investors
MAJOR FOREIGN INVESTORS
(ranked by 1993 revenues in
billions of Canadian dollars)
RANK NAME NATIONALITY REVENUE
1 General Motors of Canada American 21.8
2 Ford Motor Company of Canada American 15.9
3 Chrysler Canada American 13.6
4 Imperial Oil (Exxon) American 7.8
5 IBM Canada American 6.7
6 Shell Canada Dutch 4.7
7 Canada Safeway American 4.5
8 Amoco Canada Petroleum Co. American 4.1
9 Sears Canada American 3.9
10 Maple Leaf Foods British 2.3
11 Total Petroleum French 3.0
12 Great Atlantic & Pacific Tea American 2.7
13 Mitsui & Company Japanese 2.4
14 Honda Canada Japanese/American 2.3
15 BC Telecom American 2.2
16 Cargill Ltd. American 2.1
17 Consumers Gas British 1.8
18 Canadian Ultramar American 1.7
19 Price Costco Canada American 1.7
20 Medis Health & Pharmaceutical American 1.7
21 Pepsi Cola American 1.6
22 DuPont Canada American 1.6
23 McDonald's Restaurants American 1.5
24 General Electric American 1.5
25 Pratt & Whitney Canada American 1.4
Source: "Financial Post"
CHAPTER VIII. TRADE AND PROJECT FINANCING
A. Canadian Banking System
As of March 1995, there were 63 banks with licenses to operate in
Canada, but the banking sector is dominated by the six largest "Schedule
I" banks (widely-held Canadian-owned institutions with capital in excess
of C$750 million). In descending asset size, these banks are the Royal
Bank of Canada (Royal), Canadian Imperial Bank of Commerce (CIBC), Bank
of Montreal (BMO), Bank of Nova Scotia (Scotiabank), Toronto Dominion
(T-D) Bank, and National Bank of Canada (National). These institutions
accounted for 91 percent of total banking system assets as of March 31,
1995. The remaining 57 banks are Schedule II banks (closely-held
institutions with capital not exceeding C$750 million). The Schedule II
banks include 52 foreign bank subsidiaries, of which 12 are U.S. bank
subsidiaries.
B. Foreign Exchange Controls Affecting Trading
The Canadian dollar is fully convertible. Canada has no restrictions on
the movement of funds into or out of the country. Banks, corporations
and individuals are able to deal in foreign funds or arrange payments in
any currency they choose.
C. General Financing Availability
The financial markets in Canada are stable, mature and accessible to
everyone. There are two primary methods of financing a business:
equity financing and debt financing. Most businesses obtain their
financing using these two sources of funds. However, there are a number
of other sources of financing, such as leasing, fixed asset financing,
accounts receivable financing, and inventory financing. There are also
extensive government financial assistance programs available to business
at the federal and provincial levels.
In addition, consumer credit is used extensively, and several systems
facilitate consumer borrowing in Canada. Revolving charge plans are
issued on approximately the same terms as in the United States. As
well, Canadian banks have become sensitive to the growing financial
needs of franchised operations. Various loan and repayment plans for
franchise operations are now offered by Canadian chartered banks.
Depending on the need of the franchise or business in question, bank
services can also include payroll and cash management services.
D. Financing Exports/Methods of Payment
1. Export Financing
(a) Sources of Financing
There are no U.S. Government programs available for financing U.S.
exports to Canada. Neither EXIM Bank nor OPIC maintain programs for the
Canadian market. However, the political, economic and commercial
systems in Canada are so stable and similar to those in the United
States, that the lack of government financing should pose virtually no
problem to the overwhelming majority of U.S. firms seeking to export to
Canada. Private financing should be easily available from a U.S. firm's
own bank in the United States, or from a Canadian bank with branch
operations in the United States or associations with U.S. banks, under
terms similar to what that firm would find in the general U.S. financing
market.
Venture capital is not readily or easily available in Canada, especially
to non-Canadian firms. U.S. firms seeking sources of funding are more
likely to find success with those efforts in the United States. In
general, U.S. exporters may find the financing of exports to Canada in
many ways similar to financing of shipments to another state in the USA.
(b) Credit Information
Credit information on Canadian firms is available in World Traders Data
Reports (WTDRs) provided by the U.S. and Foreign Commercial Service of
the U.S. Department of Commerce. WTDRs include information on the type
of organization, year established, relative size, number of employees,
general reputation, territory covered, language preferred, product lines
handled, principal owners, financial references, and trade references.
Each WTDR also contains a general narrative as to the reliability of the
foreign firm. The fee is currently US$100 per report. For more
information on WTDRs, contact the nearest U.S. Department of Commerce
District Office. Many private firms, such as Dun and Bradstreet,
provide credit information or other market research data on potential
Canadian clients.
(c) Consumer Financing
Consumer credit is used extensively, and several systems facilitate
consumer borrowing in Canada. Revolving charge plans are issued on
approximately the same terms as in the United States, and all major U.S.
credit card companies are active in Canada. Canadian banks have become
sensitive to the growing financial needs of franchised operations, with
various loan and repayment plans for franchise operations are now
offered.
2. Methods of Payment
Although terms vary from one industry to another and among trading
channels, U.S. manufacturers exporting to Canada generally give a
discount for cash purchases of one or two percent of the invoice if paid
within ten days. U.S. firms exporting to department stores tend to
offer 8.5 percent to ten percent cash discounts for settlement within
ten days. Normal precautions in dealing with a first-time customer
should be exercised, and safeguards instituted wherever possible at
least until a satisfactory relationship has been established over time.
The many bank branch offices on both sides of the border should help
maintain maximum flexibility of methods of payment and facilitate the
settlement of accounts.
The disposition of charges on export collections or letters of credit
through normal banking channels should be resolved between the exporter
and the buyer at the time of sale. Canadian buyers will often accept
these charges, but an unexpected bill may cause irritation and, if there
has been no prior consent to the charge, the foreign buyer has the right
to refuse to pay. When this happens, banks are entitled to deduct the
collection charges from the remittance under the terms of the "Uniform
Rules for the Collection of Commercial Paper" developed by the
International Chamber of Commerce.
E. Export Financing and Insurance
U.S. firms exporting to Canada will not find any strong need for
government operated or backed financing and insurance against exigencies
that may be typically found in many third country markets. The U.S.
Export-Import Bank is not active in financing U.S. exports to Canada,
nor are Overseas Private Investment Corporation (OPIC) programs
available in Canada. With proper application of sound business
principles, however, U.S. firms should be able to avoid most of the
problems that require extensive export financing insurance, and rely on
commercial banks much as they do in the domestic U.S. market.
U.S. firms established in Canada are eligible to participate in the
export credit and insurance programs of Canada's official export credit
agency, the EDC.
F. Project Financing
Canada is not eligible to receive financing from multilateral
development banks.
G. List of Canadian Banks with Correspondent U.S. Banking
Arrangements
All of Canada's largest banks have branches in the United States.
Twelve U.S. banks have subsidiaries in Canada. With this kind of
physical presence, correspondent banking relationships are less
important. A list of Schedule I banks in Canada can be found in
Appendix E.
CHAPTER IX. BUSINESS TRAVEL
A. Business Customs
Business customs in Canada closely mirror those of the United States.
This is not to say, however, that doing business in Canada is exactly
the same as doing business in the United States. U.S. business
travelers to Canada should be sensitive to cultural and language
differences and allow adequate time for the development of personal
contacts in business dealings.
B. Travel Advisory and Visas
Citizens or legal, permanent residents of the United States do not
require passports or visas and can usually cross the United States-
Canada border with minimal difficulty or delay. However, to assist
officers in expediting border-crossing, and particularly to re-entering
the United States, native-born U.S. citizens should carry some
identification papers showing their citizenship, such as a birth,
baptismal, or voter's certificate. A driver's license is not
acceptable. Proof of residence may also be required. Naturalized U.S.
citizens should carry a naturalization certificate or some other
evidence of citizenship. Legal permanent residents of the United
States, who are not U.S. citizens, are advised to carry their Alien
Registration Receipt Card.
The FTA facilitates the movement of U.S. and Canadian business persons
across each country's borders through streamlined procedures. The
streamlined border-crossing procedures assure that qualified persons
will be permitted entry on a temporary basis. Business persons applying
under any of the four categories (Professional, Trader/Investor,
Business Visitor, and Intra-Company Transferee) must be U.S. citizens.
At the time of entry a verbal declaration of citizenship may be
sufficient. In those cases where business travelers are required to
show proof of citizenship, a passport, citizenship certificate, or a
birth certificate is acceptable. Business persons and dependents also
must meet other admission requirements of the Canadian Immigration Act.
U.S. citizens and other visitors to Canada may bring certain personal
goods into Canada duty and tax-free, provided that all such items are
declared to Canada Customs upon arrival and are not subject to
restriction. The temporary entry of business related material (printed
material, commercial samples, blueprints, charts, audio-visual material,
and play back or projection equipment) may be subject to the full rate
of duty and tax, a portion thereof, or may be duty and tax-free. The
amount of duty and tax payable depends on the length of the visit, the
items entered, and the end use. If the goods are eligible for free
entry, a refundable security deposit -- in the form of cash or bond --
may be required by Canada Customs.
C. Holidays
Following are the Canadian holidays in FY96, through December 1996:
Monday, October 9, 1995 Thanksgiving Day
Monday, November 13, 1995 Remembrance Day
Monday, December 25, 1995 Christmas Day
Tuesday, December 26, 1995 Boxing Day
Monday, January 1, 1996 New Year's Day
Monday, February 19, 1996 Family Day (Alberta only)
Friday, April 5, 1996 Good Friday
Monday, April 8, 1996 Easter Monday
Monday, May 20, 1996 Victoria Day
Monday, June 24, 1996 St. Jean Baptiste Day (Quebec
only)
Monday, July 1, 1996 Canada Day
Monday, August 5, 1996 Civic Holiday (most provinces)
Monday, September 2, 1996 Labor Day
Monday, October 14, 1996 Thanksgiving
Monday, November 11, 1996 Remembrance Day
Wednesday, December 25, 1996 Christmas Day
Thursday, December 26, 1996 Boxing Day
D. Business Infrastructure
The Canadian economy is highly developed, giving Canadians one of the
highest standards of living in the world. Manufacturing is concentrated
in transportation and communications equipment, engineering, steel, and
consumer goods. Most manufacturing is concentrated in Ontario and
Quebec. Primary industries built on Canada's abundant natural resources
remain an important part of the economy and a major source of exports.
The Canadian economy is closely linked by trade and investment with
other countries, especially the United States.
1. Transportation
Except in remote areas of the north, Canada possesses an advanced
transportation system comparable to that of the United States. An
extensive air network links all major and many minor traffic points with
adequate connections to the United States and the rest of the world.
Travel between the United States and Canada has been enhanced with the
implementation of the Open Skies Agreement between the two countries.
Domestic air fares per mile in Canada are generally higher than U.S.
fares, and distances between population centers are considerably
greater. Likewise, a good highway system (with somewhat less emphasis
on interstate roads) exists within 200 miles of the U.S. border and
supports extensive truck, bus and automobile traffic. Canada also has
an extensive railway system connecting the country from sea to sea. The
Canadian National Railway deals exclusively with cargo, whereas VIA Rail
offers passenger service. Furthermore, all large cities have a public
transit system, generally buses. The operation of public transport is
frequently subsidized by provincial and local governments, making most
fares reasonable.
In spite of extensive public transport arrangements, Canada is as much
an automobile society as is the United States. All U.S. automobile
manufacturers have plants in Canada, producing standard North American
vehicles. Gasoline is sold in liters in Canada, and Canadian safety
standards for cars are similar to those in the United States. Left-
hand-drive vehicles are standard; traffic moves on the right side of the
road. International highway symbols are used in Canada, and distances
are in the metric (or metric and miles) system. Seat belts and
infant/child seat restraints are mandatory in all Canadian provinces.
Fines are imposed for non-use of seat belts and child restraints.
2. Language
Canada is a bilingual country with two official languages, English and
French. English is the language spoken in the geographical majority of
the country. It is also the generally accepted language of business.
French is spoken primarily in Quebec and is the official language of
that province. The province of New Brunswick is a bilingual province
with the largest French speaking population outside of Quebec.
3. Communications
Communications are highly sophisticated in Canada, comparable with those
of the United States. Canada is integrated with the U.S. direct long-
distance telephone system (dial 1, area code and number). All forms of
communication and transmission are possible (including voice, text,
data, and video), and worldwide telegraphic services are available.
4. Housing
Canadians, in general, enjoy a high standard of living, and housing
comparable to that found in the United States is readily available.
Generally, relative costs of housing in Canada are, at minimum,
approximately 40 percent higher than those in the United States, and in
some urban centers housing costs are double.
5. Health and Food
Canada has no special health risks. Standards of community health and
sanitation are comparable to those in the United States. Competent
doctors, dentists, and specialists of all types are available, and
medical training is equivalent to that in the United States.
Most food and other consumables available in the United States can be
found in Canada. No food shortages/problems exist in Canada. Canadian
prices for food and general consumer goods are often higher than those
in the United States, but this may be offset by a favorable exchange
rate.
CHAPTER X. APPENDICES
APPENDIX A. Country Data
Population: 29,529,800 (April 1, 1995)
Population Growth Rate: 1.3% (estimate)
Religions: Catholic (42%); Protestant (40%) estimate
Government System: Confederation with Parliamentary Democracy
Prime Minister: Mr. Jean Chretien (Liberal Party)
Official Languages: English and French
Work Week: Monday to Friday, 9:00 am to 5:00 pm
Source: Statistics Canada
APPENDIX B. DOMESTIC ECONOMY
CANADIAN DOMESTIC ECONOMY
(in billions of U.S. dollars unless otherwise indicated)
ECONOMIC INDICATOR 1994 1995* 1996*
GDP (Real) 437.8 447.9 463.5
(Based on 1986 C$)
GDP Growth Rate (%) 4.6 3.6 2.8
GDP Per Capita (Real) 12,696 13,213 13,812
(US$ 000s)
Government Spending 24.8 21.5 20.6
(as a percent of Real GDP)
Inflation (%) 0.2 2.0 2.2
Unemployment (%) 10.4 9.7 9.7
Foreign Exchange Reserves 12.5 15.0** N/A
Average Exchange Rate 73.21 72.50 73.00
(C$1 = US$X)
Total Federal Debt 371.9 395.9 422.7
Debt Service Ratio N/A N/A N/A
(Ratio of principal and interest
on foreign debt to foreign income)
U.S. Economic/Military Assistance N/A N/A N/A
* estimate
** Most recent is June 30, 1995
Source: Statistics Canada and The Bank of Canada
APPENDIX C. TRADE
CANADIAN TRADE STATISTICS
(in billions of U.S. dollars unless otherwise indicated)
1994 1995 1996
Exchange Rate (C$1 = US$X) 73.21 72.50 73.00
Total Canadian Exports 194.8 223.6 234.8
(merchandise and non-merchandise)
Total Canadian Imports 211.1 235.1 246.9
(merchandise and non-merchandise)
Canadian Exports to the
United States 149.3 166.8 175.1
(merchandise and non-merchandise)
U.S. Imports into Canada 145.5 162.7 170.8
(merchandise and non-merchandise)
U.S. Share of Total Canadian
Imports 68.9 69.2 69.2
(%) (merchandise and non-merchandise)
Total Trade With the World 405.9 458.7 481.7
(merchandise and non-merchandise)
Total Trade With the
United States 294.8 329.5 345.9
(merchandise and non-merchandise)
U.S. Share of Manufactured
Imports (%) 70 70 70
Projected Average Annual 14.1 11.4 5.0
Growth Rate of Total Imports (%)
Projected Average Annual Growth 19.0 11.8 5.0
Rate of U.S. Imports (%)
Total Canadian Imports of 9.2 9.0 9.0
Agricultural Goods
Canadian Imports of U.S. 5.3 5.1 5.1
Agricultural Goods
Canadian Agricultural Goods +1.4 +1.3 +1.3
Trade Balance With the United States
Canadian Merchandise Trade United States +19.3
Balance with Three Leading Japan -1.3
Trading Partners in 1994 United Kingdom -1.4
Principal Canadian Exports H.S. 87 Motor vehicles and parts 38.6
to the United States in 1994 H.S. 27 Mineral fuels 14.2
(top five, by 2-digit H.S. Code) H.S. 84 Machinery 11.5 H.S. 44
Wood products 7.8 H.S. 48 Paper products 6.7
Principal Canadian Imports H.S. 87 Motor vehicles and parts 23.9
from U.S. in 1994 H.S. 84 Machinery 19.4
(Top five, by 2-digit H.S. Code) H.S. 85 Electrical prods 11.0
H.S. 39 Plastics 3.8
H.S. 90 Optical/precision 3.4
Source: Statistics Canada
APPENDIX D. INVESTMENT STATISTICS
TABLE 1
FOREIGN DIRECT INVESTMENT STATISTICS
Stock of FDI In Canada By Country of Ownership
1984 - 1994
(in billions of Canadian dollars)
YEAR U.S. BRITAIN OTHER TOTAL
1984 59.7 8.4 12.8 86.0
1985 67.9 8.6 13.9 90.4
1986 69.2 11.3 15.6 96.1
1987 74.2 13.1 18.8 106.1
1988 76.3 16.5 21.7 114.5
1989 80.9 16.5 25.7 123.1
1990 84.4 18.2 28.5 131.1
1991 86.8 17.1 31.6 135.5
1992 89.0 17.6 31.9 138.5
1993 90.6 17.1 32.3 140.0
1994 96.0 18.7 33.3 148.0
Source: Statistics Canada
TABLE 2
FOREIGN DIRECT INVESTMENT STATISTICS
Stock of FDI In Canada By Industry Group
1989 - 1994
(in billions of Canadian dollars)
SECTOR 1989 1990 1991 1992 1993 1994
Finance/Insurance 22.5 24.7 25.8 26.6 26.5 29.2
Energy 20.7 21.5 21.6 20.2 20.8 21.2
Chemicals/Chemical
Products 12.1 13.6 14.2 15.3 16.3 17.8
Transportation
Equipment 12.8 13.1 12.9 12.7 14.6 17.1
Food/Beverages/Tobacco 8.1 9.2 10.4 11.6 11.7 12.5
Minerals/Metal Products 8.4 9.8 9.7 9.5 9.5 9.7
Wood and Paper 7.3 7.6 7.9 8.8 8.6 8.7
Electrical/Electrical
Products 7.2 7.3 7.7 7.6 7.3 7.1
Construction 7.4 7.0 7.3 7.1 5.4 5.1
Consumer Goods/Services 4.8 5.1 5.4 6.2 5.9 5.3
Machinery and Equipment 5.1 5.2 5.3 5.5 6.0 6.4
Transport/Communications 2.6 3.2 3.3 3.7 4.0 4.1
Other 4.0 3.7 3.9 3.6 3.6 3.8
Total 123.1 131.1 135.5 138.5 140.0 148.0
Source: Statistics Canada
TABLE 3
FOREIGN DIRECT INVESTMENT STATISTICS
Stock of U.S.-Owned FDI In Canada By Industry Group
1989 - 1994
(in billions of Canadian dollars)
SECTOR 1989 1990 1991 1992 1993 1994
Energy 14.0 14.1 13.7 12.0 13.0 14.0
Finance and Insurance 10.8 11.9 12.5 12.9 12.6 13.2
Transportation
Equipment 10.4 10.6 10.5 10.4 12.1 14.6
Chemicals/Chemical
Products 8.6 8.9 9.6 10.6 11.4 12.8
Food/Beverage/Tobacco 4.9 5.6 6.7 7.5 7.7 8.3
Electrical/Electrical
Products 6.1 6.1 6.0 6.0 5.9 5.5
Wood and Paper 5.2 5.5 5.5 6.1 5.9 6.1
Minerals/Metal Products 4.5 5.3 5.2 5.4 5.4 5.3
Consumer Goods/Services 3.4 3.5 4.1 4.7 4.1 3.5
Machinery and Equipment 3.9 4.0 3.9 4.1 4.5 4.8
Transport/Communications 2.2 2.6 2.8 3.1 3.3 3.5
Construction 4.2 4.0 4.0 4.1 2.4 2.1
Other 2.7 2.4 2.4 2.1 2.0 2.3
Total 80.9 84.4 86.5 89.0 90.6 96.0
Source: Statistics Canada
TABLE 4
FOREIGN DIRECT INVESTMENT STATISTICS
Stock of Canadian Direct Investment Abroad By Location
1984 - 1994
(in billions of Canadian dollars)
Year U.S. U.K. Europe Japan Industrial Other Total
(total) Countries
(total)
1984 34.7 3.5 6.3 0.3 42.1 8.0 50.1
1985 39.6 4.4 8.3 0.3 48.9 8.3 57.2
1986 42.0 4.7 8.7 0.5 52.3 9.2 61.5
1987 46.1 6.7 11.8 0.4 59.6 11.1 70.6
1988 48.8 7.6 13.3 0.5 64.6 11.6 76.2
1989 52.6 9.7 17.0 0.5 72.1 12.1 84.3
1990 55.5 11.7 19.9 0.9 78.5 13.0 91.5
1991 58.3 13.4 22.8 2.3 85.3 15.9 101.1
1992 61.8 11.4 21.8 2.6 88.4 18.9 107.2
1993 61.6 12.0 25.1 3.0 92.0 22.1 114.1
1994 67.7 12.0 27.1 3.0 100.1 25.2 125.2
Source: Statistics Canada
TABLE 5
FOREIGN DIRECT INVESTMENT STATISTICS
Stock of Canadian Direct Investment Abroad By Industry Group
1989 - 1994
(in billions of Canadian dollars)
SECTOR 1989 1990 1991 1992 1993 1994
Finance and Insurance 19.4 21.8 24.6 27.5 29.9 32.5
Minerals/Metal Products 11.9 13.1 13.7 15.1 17.0 18.6
Communications 7.9 7.5 8.3 9.5 10.7 11.8
Food/Beverages/Tobacco 7.0 7.6 8.1 8.4 7.9 8.7
Energy 6.5 7.0 7.5 8.1 8.8 9.6
Electrical/Electrical
Products 4.4 5.0 7.0 8.6 7.2 8.1
Chemicals/Chemical
Products 6.2 6.9 7.9 7.8 9.6 9.9
Transportation 4.1 4.5 4.7 4.9 4.7 4.9
Construction 5.8 6.8 7.1 4.7 4.3 5.2
Wood and Paper 3.3 3.5 3.5 3.6 3.7 3.8
Consumer Goods/Services 1.9 1.4 2.7 2.7 2.9 4.0
Transportation Equipment 2.0 2.1 2.2 2.6 3.1 3.3
Accommodation/Restaurants 1.9 1.8 2.1 2.1 2.2 2.2
Other 1.1 1.1 1.1 1.1 1.1 1.2
Machinery and Equipment 1.0 1.1 0.5 0.5 0.9 1.5
Total 84.3 91.5 101.1 107.2 114.1 125.2
Source: Statistics Canada
TABLE 6
FOREIGN DIRECT INVESTMENT STATISTICS
Stock of Canadian Direct Investment In the U.S. By Industry Group
1989 - 1994
(in billions of Canadian dollars)
Sector 1989 1990 1991 1992 1993 1994
Finance and Insurance 8.5 9.3 9.8 10.7 10.7 12.2
Minerals/Metal Products 6.4 7.1 7.7 8.5 9.2 10.5
Communications 6.2 5.7 6.2 6.6 6.5 7.5
Chemicals/Chemical
Products 5.5 6.0 6.5 6.0 6.8 7.0
Electrical/Electrical
Products 3.5 3.8 4.3 6.0 4.6 4.9
Food/Beverages/Tobacco 4.0 4.5 4.3 4.7 3.7 3.8
Energy 4.4 4.7 4.6 4.4 4.7 4.6
Construction 4.4 4.6 4.5 4.0 3.6 4.3
Transportation Services 3.4 3.8 3.3 3.4 3.3 3.4
Wood and Paper 2.1 2.2 2.0 1.9 2.1 2.4
Consumer Goods/Services 1.1 0.5 1.8 1.9 2.2 2.9
Accommodation and
Restaurants 1.4 1.4 1.6 1.5 1.7 1.6
Transportation Equipment 0.6 0.8 1.0 1.4 1.7 1.7
Other 0.5 0.5 0.5 0.5 0.4 0.5
Machinery and Equipment 0.5 0.5 0.2 0.4 0.4 0.4
Total 52.6 55.5 58.3 61.8 61.6 67.7
Source: Statistics Canada
APPENDIX E. U.S. AND COUNTRY CONTACTS
(a) U.S.-Based USG Contacts
TPCC Trade Information Center
1-800-USA-TRADE
U.S. Department of Commerce
International Trade Administration
Office of Canada
Room 3033
14th and Constitution Avenue
Washington, D.C.
20230
Tel: (202) 482-3101
Fax: (202) 482-5865
U.S. Information Agency
Attestation Officer of the United States
Patrick Henry Building, Room 5118
301 - 4th Street, S.W.
Washington, D.C.
20547
Tel: (202) 501-7203
Multilateral Development Bank Office
14th and Constitution Avenue N.W.
Washington, D.C.
20007
Tel: (202) 482-3399
Fax: (202) 482-5179
Contact: Brenda Ebeling, Director
U.S. Department of Agriculture
Foreign Agricultural Service
Trade Assistance and Promotion Office
Tel: (202) 720-7420
(b) U.S. Embassy/Consulate Trade Related Contacts
U.S. Embassy -- Ottawa
Foreign Commercial Service
100 Wellington Street
Ottawa, Ontario
K1P 5T1
Tel: (613) 238-5335
Fax: (613) 233-8511
Contact: Richard Lenahan, Senior Commercial Officer (until 08/95)
Dale Slaght, Senior Commercial Officer (arriving 08/95)
U.S. Consulate General -- Calgary
Foreign Commercial Service
Suite 1000, 615 Macleod Trail S.E.
Calgary, Alberta
T2G 4T8
Tel: (403) 265-2116
Fax: (403) 266-4743
Contact: Sharon Atkins, Commercial Specialist (FSN)
U.S. Consulate General -- Halifax
Foreign Commercial Service
2000 Barrington Street
Suite 910, Cogswell Tower, Scotia Square
Halifax, Nova Scotia
B3J 3K1
Tel: (902) 429-2482
Fax: (902) 423-6861
Contact: Richard Vinson, Commercial Specialist (FSN)
U.S. Consulate General -- Montreal
Foreign Commercial Service
455 Rene Levesque Boulevard
Montreal, Quebec
H2Z 1Z2
Tel: (514) 398-0673
Fax: (514) 398-0711
Contact: Andrew Tangalos, Principal Commercial Officer
U.S. Consulate General -- Toronto
Foreign Commercial Service
Suite 602, 480 University Avenue
Toronto, Ontario
M5G 1V2
Tel: (416) 595-5406
Fax: (416) 595-5419
Contact: Dan Wilson, Principal Commercial Officer (until 08/95)
Stephan Wasylko, Principal Commercial Officer (arriving 08/95)
U.S. Consulate General -- Vancouver
Foreign Commercial Service
1095 West Pender Street
Vancouver, British Columbia
V6E 2M6
Tel: (604) 685-3382
Fax: (604) 687-6095
Contact: Jere Dabbs, Principal Commercial Officer
(c) Chamber of Commerce/Bilateral Business Councils
Canada-U.S. Relations Committee of the
U.S.-Canadian Chambers of Commerce
1615 H Street N.W.
Washington, D.C.
20062
Tel: (202) 463-5463
Canadian-American Business Council
1629 K Street N.W., Suite 1100
Washington, D.C.
20006
Tel: (202) 785-6717
Fax: (202) 331-4212
Central North American Trade Corridor
P.O. Box 1356
Minot, North Dakota
58702
Tel: (701) 857-3832
Pacific Corridor Enterprise Council (PACE)
720 Olive Way
Suite 1300
Seattle, Washington
98101
Tel: (800) 800-PACE
Fax: (206) 223-8984
Pacific Northwest Economic Region
999 - 3rd Avenue, Suite 1080
Seattle, Washington
98104
Tel: (206) 464-7298
Fax: (206) 464-6859
Red River Trade Corridor
University of Minnesota -- Crookston
Business Division
121 Kiehle Hall
Crookston, Minnesota
56716
Tel: (218) 281-6510
Rocky Mountain Trade
2030 - 11th Avenue
Helena, Montana
59601
Tel: (406) 443-8316
(d) Canadian Trade/Industry Associations
Aerospace Industries Association of Canada
60 Queen Street, Suite 1200
Ottawa, Ontario
K1P 5Y7
Tel: (613) 232-4297
Fax: (613) 232-1142
Automotive Industries Association of Canada
1272 Wellington Street
Ottawa, Ontario
K1Y 3A7
Tel: (613) 728-5821
Fax: (613) 728-6021
Canada-U.S. Business Association
191 The West Mall
Suite 1105
Etobicoke, Ontario
M9C 5K8
Tel: (416) 621-1507
Fax: (416) 620-5392
Canadian Advanced Technology Association
388 Albert Street
Ottawa, Ontario
K1R 5B2
Tel: (613) 236-6550
Fax: (613) 236-8189
Canadian Chamber of Commerce
55 Metcalfe Street, Suite 1160
Ottawa, Ontario
K1P 6N4
Tel: (613) 238-4000
Fax: (613) 238-7643
Canadian Exporters' Association
99 Bank Street, Suite 250
Ottawa, Ontario
K1P 6B9
Tel: (613) 238-8888
Fax: (613) 563-9218
Canadian Importers Association Inc.
210 Dundas Street West
Suite 700
Toronto, Ontario
M5G 2E8
Tel: (416) 595-5333
Fax: (416) 595-8226
Canadian Manufacturers' Association
75 International Boulevard, 4th floor
Etobicoke, Ontario
M9W 6L9
Tel: (416) 798-8000
Fax: (416) 798-8050
Packaging Association of Canada
2255 Sheppard Avenue E.
Suite E-330
Willowdale, Ontario
M2J 4Y1
Tel: (416) 490-7860
Fax: (416) 490-7844
(e) Federal Canadian Government Contacts
Department of Agriculture and Agri-Food
Sir John Carling Building
930 Carling Avenue
Ottawa, Ontario
K1A 0C5
Tel: (613) 759-1000
Fax: (613) 759-6643
Environment Canada
Terrasses de la Chaudiere
11 Wellington Street, 28th Floor
Hull, Quebec
K1A 0H3
Tel: (819) 997-2800
Fax: (819) 953-2225
Department of Fisheries and Oceans
200 Kent Street
Ottawa, Ontario
K1A 0E6
Tel: (613) 993-0999
Fax: (613) 990-1866
Department of Foreign Affairs and International Trade
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Tel: (613) 944-4000
Fax: (613) 944-6500
Health Canada
Brooke Claxton Building
Ottawa, Ontario
K1A 0K9
Tel: (613) 957-2991
Fax: (613) 941-5366
Industry Canada
235 Queen Street
Ottawa, Ontario
K1A 0H5
Tel: (613) 954-2788
Fax: (613) 954-1894
Public Works and Government Services Canada
Place du Portage, Phase III
11 Laurier Street
Hull, Quebec
K1A 0S5
Tel: (819) 956-2300
Fax: (819) 994-8404
Revenue Canada -- Customs, Excise and Taxation
Connaught Building
MacKenzie Avenue
Ottawa, Ontario
K1A 0L5
Tel: (613) 995-2960
Fax: (613) 952-6608
Standards Council of Canada
45 O'Connor Street
Suite 1200
Ottawa, Ontario
K1P 6N7
Tel: (613) 238-3222
Fax: (613) 995-4564
Statistics Canada
R. H. Coats Building
Tunney's Pasture
Ottawa, Ontario
K1A 0T6
Tel: (613) 951-8116
Fax: (613) 951-0581
Transport Canada
Transport Canada Building
Place de Ville
330 Sparks Street
K1A 0N5
Tel: (613) 990-2309
Fax: (613) 995-0351
(f) Provincial Canadian Government Contacts
Following are the telephone numbers for general inquiries in each of the
Canadian provinces and territories.
Alberta (403) 427-2711
British Columbia (604) 387-6121
Manitoba (204) 945-3744
New Brunswick (506) 453-2525
Newfoundland (709) 729-3610
North West Territories (403) 873-7110
Nova Scotia (902) 424-5200
Ontario (416) 326-1234
Prince Edward Island (902) 368-5050
Quebec (514) 873-2111
Saskatchewan (306) 787-0222
Yukon (403) 667-5811
(g) Canadian Government Contacts in the United States
Embassy of Canada
501 Pennsylvania Avenue N.W.
Washington, D.C.
20001
Tel: (202) 682-1740
Fax: (202) 682-7726
Territory: Delaware and Eastern Pennsylvania, Maryland, Virginia and
the District of Columbia
Canadian Consulate General -- Atlanta
Suite 400, South Tower
One CNN Center
Atlanta, Georgia
30303-2705
Tel: (404) 577-6810
Fax: (404) 524-5046
Territory: Alabama, Florida, Georgia, Mississippi, North Carolina,
South Carolina, Puerto Rico, Tennessee, U.S. Virgin Islands
Canadian Consulate General -- Boston
Three Copley Place, Suite 400
Boston, Massachusetts
02116
Tel: (617) 262-3760
Fax: (617) 262-3415
Territory: Maine, Massachusetts, New Hampshire, Rhode Island, and
Vermont
Canadian Consulate General -- Buffalo
One Marine Midland Center,
Suite 3000
Buffalo, New York
14203-2884
Tel: (716) 858-9500
Fax: (716) 852-4340
Territory: Western, Central and Upstate New York, West Pennsylvania,
and West Virginia
Canadian Consulate General -- Chicago
Suite 2400, Two Prudential Plaza
180 N. Stetson Avenue
Chicago, Illinois
Tel: (312) 616-1860
Fax: (312) 616-1877
Territory: Illinois, Missouri, Wisconsin and the Quad-Cities - Five
Northwest counties of Indiana, and the Counties of Wyandotte, Johnson
and Douglas in Kansas
Canadian Consulate General -- Dallas
St. Paul Place, Suite 1700
750 North St. Paul Street
Dallas, Texas
75201-9990
Tel: (214) 922-9806
Fax: (214) 922-9815
Territory: Arkansas, Kansas, Louisiana, New Mexico, Oklahoma and Texas
Canadian Consulate General -- Detroit
600 Renaissance Center, Suite 1100
Detroit, Michigan
48243-1798
Tel: (313) 567-2340
Fax: (313) 567-2164
Territory: Michigan, Indiana (except the five N.W. Counties), Kentucky,
and Ohio
Canadian Consulate General -- Los Angeles
300 South Grand Avenue
10th Floor
California Plaza
Los Angeles, California
90071
Tel: (213) 346-2700
Fax: (213) 620-8827
Territory: Arizona, California, Hawaii, Nevada, and Utah
Canadian Consulate General -- Miami
Suite 1600, First Union Financial Center
200 South Biscayne Boulevard
Miami, Florida
33131
Tel: (305) 579-1600
Fax: (305) 374-6774
Territory: Florida
Canadian Consulate General -- Minneapolis
Suite 900, 701 Fourth Avenue South
Minneapolis, Minnesota
55415-1899
Tel: (612) 333-4641
Fax: (612) 332-4061
Territory: Colorado, Iowa (except the Quad-Cities), Minnesota, Montana,
Nebraska, North Dakota, South Dakota, and Wyoming
Canadian Consulate General -- New York
1251 Avenue of the Americas
New York City, New York
10020-1175
Tel: (212) 596-1600
Fax: (212) 596-1793
Territory: Southern New York State, Connecticut, and New Jersey
Canadian Consulate General -- Seattle
412 Plaza 600
Sixth and Stewart Streets
Seattle, Washington
98101-1286
Tel: (206) 443-1777
Fax: (206) 443-1782
Territory: Alaska, Idaho, Oregon, and Washington
(h) Canadian Market Research Firms
Following are some of the major market research firms in Canada, listed
alphabetically. A more complete list of firms can be obtained by
contacting the Canadian Professional Marketing Research Society, also
listed below.
Angus Reid Group, Inc.
160 Bloor Street East, Suite 610
Toronto, Ontario
M4W 1B9
Tel: (416) 324-2900
Fax: (416) 324-2865
The Coopers & Lybrand Consulting Group
145 King Street West, Suite 2300
Toronto, Ontario
M5H 1V8
Tel: (416) 869-1130
Fax: (416) 863-0926
Decima Research
1 Eglinton Avenue East, 7th Floor
Toronto, Ontario
M4P 3A1
Tel: (416) 483-1724
Fax: (416) 483-4441
Deloitte & Touche -- Consulting and Market Research
98 Macdonell Street, Suite 400
Guelph, Ontario
N1H 8L1
Tel: (519) 822-1090
Fax: (519) 822-0247
Dun & Bradstreet Canada
Dun's Marketing Services
5770 Hurontario Street
Mississauga, Ontario
L5R 3G5
Tel: (905) 568-6000
Fax: (905) 568-6197
Environics Research Group Limited
45 Charles Street East
Toronto, Ontario
M4Y 1S2
Tel: (416) 964-1397
Fax: (416) 964-2486
Gallup Canada Inc.
180 Bloor Street West
Toronto, Ontario
M5S 2V6
Tel: (416) 961-2811
Fax: (416) 961-3662
Goldfarb Consultants
4950 Yonge Street, 17th Floor
North York, Ontario
M2N 6K1
Tel: (416) 221-9200
Fax: (416) 221-2214
Professional Marketing Research Society
2175 Sheppard Avenue East, Suite 110
Willowdale, Ontario
M2J 1W8
Tel: (416) 493-4080
Fax: (416) 491-1670
Southam Marketing Research Services
1450 Don Mills Road
Don Mills, Ontario
M3B 2X7
Tel: (416) 445-6641
Fax: (416) 442-2248
(i) Canadian Commercial Banks
Following is the contact information for the Canadian Schedule I Banks.
Bank of Montreal
55 Bloor Street West
Bank of Montreal Tower
4th Floor
Toronto, Ontario
M4W 3N5
Tel: (416) 927-2740
Bank of Nova Scotia
44 King Street West
Toronto, Ontario
M5H 1H1
Tel: (416) 866-6161
Canadian Imperial Bank of Commerce (CIBC)
Commerce Court Postal Station
Toronto, Ontario
M5L 1A9
Tel: (416) 980-2211
National Bank of Canada
50 O'Connor Street, Suite 1224
Ottawa, Ontario
K1P 6L2
Tel: (613) 238-8385
Royal Bank of Canada
200 Bay Street
Royal Bank Plaza
Toronto, Ontario
M5J 2J5
Tel: (416) 974-5151
Toronto Dominion Bank
P. O. Box 1
Toronto Dominion Center
55 King Street
Toronto, Ontario
M5K 1A2
Tel: (416) 982-7730
APPENDIX F. MARKET RESEARCH
Market research is available from a wide variety of sources including:
federal and provincial governments; advertising agencies; accounting
firms, government relations consultants and market research companies.
Lists of firms specializing in market research firms activities may be
obtained by contacting the Canadian Professional Marketing Research
Society. In Canada, the primary source of federal government statistics
is Statistics Canada, which is roughly comparable to the U.S. Bureau of
the Census. Statistics Canada collects a wide variety of detailed
statistical data on national income accounts, balance of payments,
industrial production, imports and exports, demographics, inflation
rates, wages, etc. As a starting point for collecting detailed market
research on specific industry subsectors and market intelligence on
emerging business developments in Canada, U.S. companies should contact
their local District Office of the U.S. Department of Commerce, or the
US&FCS office of the U.S. Embassy in Ottawa, Canada.
A complete list of all USDOC market research reports on Canada is
available on the National Trade Data Bank.
1. USDOC/FCS Commercial Reports
(a) Industry Subsector Analyses
During FY96, FCS Canada will prepare a minimum of 20 Industry Subsector
Analyses covering a variety of topics classified among FCS Canada's Best
Prospects. Sectors identified for study along with expected completion
dates for each ISA are listed below:
Industry Subsector: Pollution Control Equipment - Oil and Gas Industry
ITA Industry Code: POL
Submission Date: October 1995
Industry Subsector: Skincare Products
ITA Industry Code: COS
Submission Date: November 1995
Industry Subsector: Robotics
ITA Industry Code: ROB
Submission Date: December 1995
Industry Subsector: Outdoor Decoratives
ITA Industry Code: HCG
Submission Date: December 1995
Industry Subsector: Distribution and Warehouse Equipment
ITA Industry Code: MHM
Submission Date: January 1996
Industry Subsector: Non-Food Retail Franchising
ITA Industry Code: FRA
Submission Date: January 1996
Industry Subsector: Women's Apparel
ITA Industry Code: APP
Submission Date: February 1996
Industry Subsector: Windows and Doors
ITA Industry Code: BLD
Submission Date: February 1996
Industry Subsector: Dental Equipment
ITA Industry Code: DNT
Submission Date: February 1996
Industry Subsector: Alarms and Other Detection Equipment
ITA Industry Code: SEC
Submission Date: March 1996
Industry Subsector: Office Furniture
ITA Industry Code: FUR
Submission Date: March 1996
Industry Subsector: Mining Equipment
ITA Industry Code: MIN
Submission Date: April 1996
Industry Subsector: Compressors
ITA Industry Code: PVC
Submission Date: May 1996
Industry Subsector: Food Franchising
ITA Industry Code: FRA
Submission Date: June 1996
Industry Subsector: Games and Toys
ITA Industry Code: TOY
Submission Date: June 1996
Industry Subsector: Computer-Aided Manufacturing
ITA Industry Code: CSF
Submission Date: July 1996
Industry Subsector: Multimedia Software
ITA Industry Code: CSF
Submission Date: July 1996
Industry Subsector: Direct Marketing
ITA Industry Code: GSV
Submission Date: August 1996
Industry Subsector: Machine Tools - CNC
ITA Industry Code: MTL
Submission Date: August 1996
Industry Subsector: Hazardous Materials Management for Site
Reclamation
ITA Industry Code: POL
Submission Date: August 1996
(b) International Market Intelligence/Insight Reports
(IMI)
FCS Canada has substantially increased its market intelligence reporting
over the last few years. The total number of IMIs for FY96 is expected
to surpass that of FY95 with nearly more than 100 reports submitted to
Washington by the end of the fiscal reporting year. FCS Canada will
maintain this high level of reporting by providing key market
opportunities and regulatory developments which impact on U.S. business.
FCS reports are accessible through the National Trade Data Bank (NTDB).
A copy of the NTDB CD-ROM can be obtained from the U.S. Department of
Commerce through the: National Trade Data Bank
Economics and Statistics Administration
Office of Business Analysis
Room 4885, HCHB
Washington, D.C.
20230
2. USDA/FAS Commodity Reports and Market Briefs
To obtain a copy of Marketing in Canada: A Guide for U.S. Food and
Agricultural Products Exporters contact:
Office of Agricultural Affairs
c/o U.S. Embassy
P.O. Box 5000
Ogdensburg, N.Y.
13669-0430
Tel: (613) 238-5335
Fax: (613) 233-8511
Following is a list of upcoming USDA/FAS Commodity Reports and Market
Briefs scheduled for submission in FY96, which can be obtained by
contacting:
The Reports Office
USDA/FAS
Washington, D.C.
20250
As Available Grain & Feed Export Trade Data Monthly
As Available Oilseed Export Trade Data Monthly
As Available Oilseeds Import Trade Data Monthly
01/01/95 Fresh Deciduous Fruit Semi-Annual
01/31/95 Grain Voluntary Updates February Lockup
01/31/95 Oilseeds Voluntary Updates February Lockup
02/01/95 Livestock Semi-Annual
02/28/95 Grain Voluntary Updates March Lockup
02/28/95 Oilseeds Voluntary Updates March Lockup
03/15/95 Foreign Buyer List Annual Report
03/15/95 Seafood Semi-Annual
03/15/95 Strawberry Annual
03/31/95 Grain Voluntary Updates April Lockup
03/31/95 Oilseeds Voluntary Updates April Lockup
04/05/95 Grain & Feed Annual
04/10/95 Sugar Annual
04/30/95 Grain Voluntary Updates May Lockup
04/30/95 Oilseeds Voluntary Updates May Lockup
05/01/95 Oilseeds & Products Annual
05/01/95 Tobacco Annual
05/15/95 Dairy Semi-Annual
05/31/95 Grain Voluntary Updates June Lockup
05/31/95 Oilseeds Voluntary Updates June Lockup
06/20/95 Poultry Annual
06/30/95 Grain Voluntary Updates July Lockup
06/30/95 Oilseeds Voluntary Updates July Lockup
07/15/95 Annual Marketing Plan Information Report
07/31/95 Grain Voluntary Updates August Lockup
07/31/95 Oilseeds Voluntary Updates August Lockup
08/01/95 Livestock Annual
08/25/95 Honey Annual
08/31/95 Grain Voluntary Updates September Lockup
08/31/95 Oilseeds Voluntary Updates September Lockup
09/10/95 Fresh Deciduous Fruit Annual
09/15/95 Seafood Annual
09/30/95 Agricultural Situation Annual
09/30/95 Grain Voluntary Updates October Lockup
09/30/95 Oilseeds Voluntary Updates October Lockup
10/01/95 Sugar Semi-Annual
10/15/95 Forest Products Annual
10/15/95 Frozen French Fry Annual
10/31/95 Grain Voluntary Updates November Lockup
10/31/95 Oilseeds Voluntary Updates November Lockup
11/20/95 Poultry Semi-Annual
11/30/95 Dairy Annual
11/30/95 Grain Voluntary Updates December Lockup
11/30/95 Oilseeds Voluntary Updates December Lockup
12/10/95 Brandy Annual
12/10/95 Planting Seed Annual
12/10/95 Wine Marketing Annual
12/10/95 Seeds Annual
12/31/95 Grain Voluntary Updates January Lockup
12/31/95 Oilseeds Voluntary Updates January Lockup
APPENDIX G. TRADE EVENT SCHEDULE
Please note that because Trade Event schedules may change, firms should
consult the Export Promotion Calendar on the NTDB or contact the post
for the latest information/schedule.
1. Commercial Events
(a) Trade Events
(a) Event: WORLD TRADE '95
Event Type: Trade Fair -- Catalog Show
Sector: GIE (Horizontal, consumer & industrial)
Date: October 26, 1995
Location: Toronto, Ontario
USG Involvement: Post recruited
(b) Event: U.S. STATES MEDICAL MATCHMAKER
Event Type: Matchmaking Trade Mission
Sector: MED (Medical equipment)
Date: November 6-7, 1995
Location: Toronto, Ontario
USG Involvement: State recruited
(c) Event: VANCOUVER INDUSTRIAL TECHNOLOGY EXHIBITION
Event Type: Trade Fair -- Catalog Exhibition
Sector: MTL, MHM, GIE (industrial technologies)
Date: November 7-9, 1995
Location: Vancouver, British; Calgary, Alberta
USG Involvement: Post recruited
(d) Event: CONSTRUCT CANADA
Event Type: Trade Fair -- U.S. Pavilion
Sector: BLD (construction & building products)
Date: November 29-31, 1995
Location: Toronto, Ontario
USG Involvement: Post recruited
(e) Event: COMDEX VANCOUVER
Event Type: Certified Trade Fair -- Catalog Exhibition
Sector: CPT, CSF (computers & software)
Date: January 1996
Location: Vancouver, British Columbia
USG Involvement: USDOC Certified, Post recruited
(f) Event: CANADIAN HARDWARE/HOUSEWARE/
HOME IMPROVEMENT SHOW
Event Type: Trade Fair -- U.S. Pavilion
Sector: BLD (hardware products)
Date: February 4-6, 1996
Location: Toronto, Ontario
USG Involvement: Post recruited
(g) Event: CSGA ANNUAL INTERNATIONAL CONVENTION &
EXHIBITION
Event Type: Gold Key Mission
Sector: SPT (sporting goods)
Date: February 1996
Location: Montreal, Canada
USG Involvement: Post Recruited
(h) Event: GLOBE'96
Event Type: Certified Trade Fair, Business Information Booth
Sector: POL, ENV, (environmental technologies)
Date: March, 1996
Location: Vancouver, British Columbia
USG Involvement: USDOC Certification
(i) Event: EASTERN CANADA MULTI-STATE TRADE DAYS
Event Type: Trade Mission
Sector: Horizontal
Date: April 1-5, 1996
Location: Toronto, Ontario; Montreal Quebec, with spin-off
exhibitions in Ottawa and Halifax
USG Involvement: State recruited
(j) Event: WESTERN CANADA MULTI-STATE TRADE DAYS
Event Type: Trade Mission
Sector: Horizontal
Date: April 8-12, 1996
Location: Vancouver, British Columbia; Calgary, Alberta
USG Involvement: State recruited
(k) Event: CANADIAN INTERNATIONAL AUTOMOTIVE SHOW
Event Type: Trade Fair -- U.S. Pavilion
Sector: APS (automotive aftermarket)
Date: April 13-15, 1996
Location: Montreal, Quebec
USG Involvement: Post Recruited
(l) Event: TORONTO ENVIRONMENTAL TRADE SHOW
Event Type: Matchmaker & Conference
Sector: POL (environmental products)
Date: May 7-8, 1996
Location: Toronto, Ontario
USG Involvement: Post recruited
(m) Event: MONTREAL FABRICATING & MACHINE TOOL SHOW
Event Type: Gold Key Mission
Sector: MTL (machine tools and metal fabrication)
Date: May 14 - 16, 1996
Location: Montreal, Canada
USG Involvement: Post Recruited
(n) Event: PMDS'96
(PLANT MAINTENANCE/DESIGN ENGINEERING SHOW)
Event Type: Trade Fair -- Catalog Exhibition & Gold Keys
Sector: GIE, MHM, PCI, POL, ROB
Date: May 14 - 16, 1996
Location: Montreal, Quebec
USG Involvement: Post Recruited
(o) Event: EQUIFAIR
Event Type: Trade Fair -- U.S. Pavilion
Sector: SPT (equine products)
Date: September 1996
Location: Calgary, Alberta
USG Involvement: Post Recruited
(p) Event: CANADIAN HIGH TECH SHOW/
WEST VIRGINIA MATCHMAKER
Event Type: Trade Fair -- U.S. Pavilion/Matchmaker
Computer Products/Equipment
Sector: CPT (computers & electronics)
Date: September 17-18, 1996
Location: Toronto, Ontario
USG Involvement: State/Post recruited
(q) Event: TECHNOLOGY IN GOVERNMENT SHOW (G-TEC)
Event Type: Trade Fair -- Catalog Exhibition
Sector: GSV, CPT, CSF, TEL (information technologies)
Date: September 17-18, 1996
Location: Ottawa, Ontario
USG Involvement: Post recruited
(r) Event: 12TH ANNUAL BUSINESS WORLD EXHIBITION
Event Type: Trade Fair -- U.S. Pavilion
Sector: Horizontal
Date: September 26-29, 1996
Location: Montreal, Quebec
USG Involvement: Post recruited
NOTE: As event schedules are subject to change interested companies are
advised to consult the U.S. Department of Commerce Export Promotion
Calendar available through the National Trade Data Bank or Contact the
Commercial Service Office of the U.S. Embassy in Ottawa, Canada (613)
238-4470 ext. 219.
(b) International Buyer Program Events
FCS Canada will promote and facilitate participation by Canadian
business visitors in the following major U.S. trade shows.
(a) Event: Automotive Aftermarket Industry Week '95
Event Type: International Buyer Program
Sector: APS
Date: October 24-27, 1995
Location: Las Vegas, NV
FCS Contact: Madellon Lopes, FCS Toronto; Rick Tachuk, FCS
Ottawa
(b) Event: World Engineering Congress
Event Type: International Buyer Program
Sector: Engineering
Date: November 8-10, 1995
Location: Atlanta, GA
FCS Contact: Robert Decent, FCS Toronto
(c) Event: Medtrade/NHHCE
Event Type: International Buyer Program
Sector: MED
Date: November 15-18, 1995
Location: Atlanta, GA
FCS Contact: Pierre Richer, FCS Montreal
(d) Event: The Builder's Show
Event Type: International Buyer Program
Sector: BLD
Date: January 26-29, 1996
Location: Houston, TX
FCS Contact: Richard Vinson, FCS Halifax; Rita Cilia, FCS
Toronto
(e) Event: MAGIC International (Men's Apparel Guild
California)
Event Type: International Buyer Program
Sector: APP
Date: January 30 - February 2, 1996
Location: Las Vegas, NV
FCS Contact: Madellon Lopes, FCS Toronto; Jere Dabbs, FCS
Vancouver
(f) Event: California Farm Equipment Show
Event Type: International Buyer Program
Sector: Farm Equipment
Date: February 13-15, 1996
Location: Tulare, CA
FCS Contact: Sharon Atkins, FCS Calgary
(g) Event: American International Toy Fair
Event Type: International Buyer Program
Sector: TOY
Date: February 16-19, 1996
Location: New York, NY
FCS Contact: Jacquie Hazan, FCS Montreal; Robert Decent, FCS
Toronto
(h) Event: International Franchise Expo
Event Type: International Buyer Program
Sector: FRA
Date: March 8-10, 1996
Location: Washington, DC
FCS Contact: Richard Vinson, FCS Halifax
(i) Event: CONEXPO-CON/AGG '96
Event Type: International Buyer Program
Sector: Construction
Date: March 20-24, 1996
Location: Las Vegas, NV
FCS Contact: Jacquie Hazan, FCS Montreal; Rita Cilia, FCS
Toronto
(j) Event: Intermedia
Event Type: International Buyer Program
Sector: Media
Date: April 1-3, 1996
Location: Las Vegas, NV
FCS Contact: Viktoria Palfi, FCS Toronto; Jere Dabbs, FCS
Vancouver
(k) Event: NetWorld + Interop '96
Event Type: International Buyer Program
Sector: Computer Networks
Date: April 2-4, 1996
Location: Las Vegas, NV
FCS Contact: Andrew Tangalos, FCS Montreal
(l) Event: Offshore Technology Conference
Event Type: International Buyer Program
Sector: Offshore Oil Exploration Equipment
Date: May 6-9, 1996
Location: Richardson, TX
FCS Contact: Sharon Atkins, FCS Calgary
(m) Event: WasteExpo '96
Event Type: International Buyer Program
Sector: POL
Date: May 20-24, 1996
Location: Las Vegas, NV
FCS Contact: Robert Decent, FCS Toronto
(n) Event: International Fashion Boutique
Event Type: International Buyer Program
Sector: APP
Date: June 1-4, 1996
Location: New York, NY
FCS Contact: Jacquie Hazan, FCS Montreal
(o) Event: COMDEX/Spring and Windows World '96
Event Type: International Buyer Program
Sector: CPT, CSF
Date: September 9-12, 1996
Location: Las Vegas, NV
FCS Contact: Jere Dabbs, FCS Vancouver; Connie Irrera, FCS
Montreal
(p) Event: HazMat International
Event Type: International Buyer Program
Sector: POL
Date: June 5-7, 1996
Location: Philadelphia, PA
FCS Contact: Madellon Lopes, FCS Toronto
(q) Event: MINExpo International '96
Event Type: International Buyer Program
Sector: Mining
Date: September 9-12, 1996
Location: Las Vegas, NV
FCS Contact: Pierre Richer, FCS Montreal; Sharon Atkins FCS
Calgary
(r) Event: 1996 IEEE/PE Transmission and Distribution
Conference
Event Type: International Buyer Program
Sector: ELP
Date: September 15-20, 1996
Location: Los Angeles, CA
FCS Contact: Andrew Tangalos, FCS Montreal
(s) Event: Personal Communication Industry Association
Event Type: International Buyer Program
Sector: TEL
Date: September 26-28, 1996
Location: San Francisco, CA
FCS Contact: Connie Irrera, FCS Montreal
2. Agricultural Events
(a) Canadian Produce Marketing Convention & Trade Show
Date: Annual Trade-Only Show
1996 - January 31 - February 3
1997 - January 29 - February 1
Locations: 1996 - Vancouver, British Columbia
1997 - Banff, Alberta
Sponsor: Canadian Produce Marketing Association
310-1101 Prince of Wales Drive
Ottawa, Ontario
K2C 3W7
Contact: Tel: (613) 226-4187
Fax: (613) 226-2984
(b) Grocery Showcase Canada (Central Canada grocery show)
Date: Annual Trade-Only Show
1995 - October 22-24
1996 - October 27-29
1997 - October 26-28
Locations: Toronto, Ontario
Sponsor: Canadian Federation of Independent Grocers
2235 Sheppard Avenue, East
Suite 902
Willowdale, Ontario
M2J 5B5
Contact: Tel: (416) 492-2325
Fax: (416) 492-2347
Grocery Showcase West (Western Canada grocery show)
Date: Annual Trade-Only Show
1996 - April 21-22
1997 - March 9-10
Locations: 1996 - Calgary, Alberta
1997 - Vancouver, British Columbia
Sponsor: Canadian Federation of Independent Grocers
2235 Sheppard Avenue, East
Suite 902
Willowdale, Ontario
M2J 5B5
Contact: Tel: (416) 492-2325
Fax: (416) 492-2347
(c) Canadian Fine Food Show (Specialty Foods Show)
Date: Annual Trade-Only Show
1996 - May 26-28
1997 - May 25-27
Locations: Toronto, Ontario
Sponsor: Canadian Association of Specialty Foods
1 Eva Road, Suite 409
Etobicoke, Ontario
M9C 4Z5
Contact: Meteor Show Productions Inc.
298 Sheppard Avenue, East
Willowdale, Ontario
M2N 3B1
Tel: (416) 229-2060
Fax: (707) 223-2826
(d) Canadian Food & Beverage Show (Food Service Show)
Date: Annual Trade-Only Show
1996 - February 28-30
1997 - February 16-18
Sponsor: Canadian Restaurant & Food Service
316 Bloor Street West
Toronto, Ontario
M5S 1W5
Contact: Tel: (416) 923-8416
Fax: (416) 923-1450
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