We share our top ten reasons why you may choose Canada as your bridgehead into North America
When thinking of countries in which it would be great to live and do business, Canada will usually appear on most people’s shortlists. In 2020, Canada was named second-best country in the world for its quality of life, ranking highly in the category of “business-friendliness”. This is down to their openness to business, entrepreneurship, transparent government and low levels of bureaucracy.
“There are strong links between the UK and Canada. At Bridgehead, our purpose is to help each culture understand each other to facilitate a smooth and successful market entry. We strategically chose Toronto as our first North American office” – Paul McIntosh, Founder of Bridgehead
1. It’s home to one of the fastest growing tech-hubs in the world
Toronto is the fourth largest and fastest growing technology hub in North America. Today, the city is home to over 5,200 start-ups and 15,000 technology companies. This cluster centres on fields such as artificial intelligence (AI), blockchain, augmented reality/virtual reality (AR/VR), as well as cybersecurity.
There is a highly skilled technology talent pool, owing to Toronto being home to world class universities and colleges, who have ramped up their technology and business-related courses over the last decade.
The Canadian government is keen to attract technology companies by offering incentives, funding and procurement options for start-ups.
2. It’s a great landing point for North America and strategic geographical location neighbouring the US borders
Due to its shared borders, and solid transportation infrastructure, Canada is the main gateway linking to the US.
In Canada, you have access to 37 million potential customers, but if you move southwards to the US, there are 327 million more prospective customers to tap into.
In July 2020, the Canada-USA-Mexico Agreement (CUSMA) came into force, and we anticipate this alliance will further increase and strengthen trade and economic integration between these locations.
3. Cultural and language familiarity with the UK
Both the UK and Canada are members of the Commonwealth. This has resulted in a rich history of successful trade between the two nations.
Business culture has many similarities also – Canadians prefer a mix of direct and indirect communication when it comes to business discussions and small talk is considered important to build a personal rapport[1].
Business meetings are scheduled at least a week in advance and punctuality is of prime importance, conflicts are are resolved through discussions to arrive at a mutually acceptable solution[1]. It is also rather important to maintain a strong business network through personal and professional contacts to succeed in business in Canada.
Also, English, along with French, is one of Canada’s official languages so those lost-in-translation moments should be unlikely.
4. Stable economy and financial system
Canada enjoyed stable economic growth between 2005 to 2014. The country’s major banks emerged from the 2008 global financial crisis as some of the strongest in the world.
The economic outlook for Canada looks positive, with real GDP forecasted to increase by 1.6% p.a. from 2019 to 2024[1]:
Canada had a fiscal surplus of 0.8% of GDP in 2018, and the inflation rate is projected to decrease from 2019 to 2021[1].
5. Highly educated and skilled workforce
You can certainly rely on Canada for access to a top talent pool. The OECD reported that Canada (2019) ranks second in the world (after Korea), with 63% of their adult population (aged 25-34) possessing a college/university degree.
Canada’s world-leading universities also attract top researchers and professors from all over the globe resulting in a high calibre of graduates.[1]
6. Low start-up and running costs
The costs of operations are lower in Canada compared to most other countries, making it an ideal location to embark on your international expansion journey. KPMG’s research on international business location costs in 2016 revealed that Canada reaped the benefits of having the second lowest business costs in the world.
The Canadian government has also put in place many assistance programmes including incentives, tax deductions, and refund programmes.
Score for “starting a business” in Canada was higher than regional average in 2019[1]:
7. Foreign investors benefits
There are several financial programmes for foreign investors setting up companies in Canada. You have the option to open various types of structures at federal or territorial level and receive the same tax treatment as local investors.
Under the Investment Canada Act, foreign investors have the right to purchase either public or private local companies. The purchase of assets is also possible under the Canadian legislation on foreign investments. Some of the best schemes related to foreign direct investments include the Community Initiatives Program and the Foreign Trade Zones Marketing program.
8. The world’s lowest corporate tax rates
Through an effort to stimulate economic growth, the Canadian government have continued to lower their corporate tax rates. In 2019, the rate for qualifying companies was as low as 15%, which remains one of the lowest in the world.
9. Beneficial trade agreements
Canada benefits from having trade agreements with many countries. As well as CUSMA (formerly NAFTA), Canada is also part of the Comprehensive Economic and Trade Agreement (CETA) with the European Union and the twelve-nation Trans-Pacific Partnership (TPP).
At the time of writing this article, an encouraging announcement by the Government on the UK and Canada agreeing to rollover the provisions of CETA[2] is welcoming news. Businesses trading goods and services between the two nations now have the much-needed certainty and a renewed confidence in future trading. Further negotiations are scheduled to take place early in 2021 to agree a new bespoke UK-Canada trade deal.
10. Effective intellectual property rights protection
In Canada, the protection of intellectual property is a federal responsibility and is the subject of four principal statutes, comprising: Patent Act, Trade-marks Act, Copyright Act, and Industrial Design Act. You will be able to protect your intellectual property by submitting applications.
Will you be choosing Canada to expand your business into?
All the factors on this list collectively contributed to our decision to choose Toronto, Canada for our North American office. Do they make Canada the right next step for your business?
At Bridgehead, each client journey begins with extensive research to ensure the landing point chosen is going to be successful. Once the research is completed and the Go-To-Market strategy is put together, Bridgehead experts will realise the strategy, delivering quantifiable results within the first 90 days, guaranteed.
“The world is your oyster” as the saying goes, so if you have the right product or service, then we can help to accelerate your market entry and find you the fastest returns. Our expert teams across Europe and North America are ready to help you.
References:
[1] Canada 2020 Statista report
[2] Gov.uk, UK secures vital rollover trade deal with Canada and agrees to start negotiating more advanced deal next year
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