Travel to Canada and you quickly realise the world’s second largest country, on the verge of signing two major trade agreements, is a market ripe for British investment.
Canada has hit the headlines recently, following Justin Trudeau’s convincing election victory as prime minister, sparking a new wave of interest in the world’s second largest country.
For business, Canada’s support for essential free trade agreements – notably the Trans Pacific Partnership (TPP), between the USA and 10 South East Asian countries, and the Canada Europe Trade Agreement (CETA) – is key. These transformational deals would be the most significant reached since the North American Free Trade Agreement (NAFTA) in the 1990s, and could transform the economic prospects of Canada.
TPP has been controversial in Canada – it divided the three major parties in the election – as well as over the border in the US, where Hilary Clinton, Bernie Sanders, and yes, even Donald Trump, oppose it. The Canada Europe Trade Agreement (CETA) has had a somewhat smoother ride, but has yet to be signed, sealed and delivered – that isn’t likely to be before the end of 2016. It is now being scrutinised by lawyers, and translated into Canada and the EU’s official languages, a process which will take several months. There is a risk that one side or the other may choose to reopen the legal agreements before parliamentary ratification takes place on both sides of the Atlantic, but the Canadian government has been clear that they view the negotiations as done and dusted.
Despite complications, these deals should change the way in which we view Canada. This is an economy that could have a free trade agreement with the EU, the US and the Pacific markets by the end of 2016. Clearly this represents a huge advantage to businesses that trade with and invest in Canada, and that are looking to grow their exports in this fertile market.
Canada certainly has a diverse economy, from the resources dominated Province of Alberta to the manufacturing and services driven economy of Ontario. On a recent trip, I was particularly struck by the potential, and the challenges, out in the oil sands of Alberta. Visiting Calgary, I learned that the industry has been a huge boon to Canada and the sands and natural gas fields promise continued supply and export potential. But these technologies are expensive and the investment required has been driven by a sustained high oil price, until now.
I got the sense that the industry has grown resigned to a future based on low oil prices. With the threat of climate change, and the drive for sustained reduction in carbon, Alberta is looking for a future where technology and innovation provides as many of the solutions as the CBI is convinced green taxes and carbon pricing can.
With a population of 35 million, just 10% of that of the US and half the size of the UK’s, Canada punches big. It has developed manufacturing, services, educational, technology and medical sectors, and is just as internationally focused as its dominant neighbour. For our part, the UK is the second largest foreign investor (after the USA) and one of the largest suppliers of immigrant labour. Visitors from the UK, on the hunt for pure maple syrup or hitting the ski slopes, are also the second largest group of tourists after the Americans!
All this, coupled with the historical and cultural ties that bind the UK and Canada together and its position as a pivotal crossroad in the global trading market, make it a natural place for all businesses to seriously consider investing in.