There are many reasons to expand a business into Canada. The country has a thriving economy, with a low tax bracket and plenty of opportunities. Being close to the United States making it an ideal location to access the North American market.
These are only some of the reasons and in this article, we want to show you more about the current economy of Canada and the 5 reasons to consider a business expansion in Canada.
Economy of Canada
Canada’s economy is one of the most sophisticated and largest in the world. In 2020, the country’s annual gross domestic product (GDP) was $1.64 trillion in current USD. As a result, Canada is now the world’s ninth largest economy.
Despite the effect of the Omicron coronavirus strain and protests that shut down key border crossings, the Canadian economy entered 2022 on a strong footing, with a 2021 fourth-quarter growth of 6.7%, beating the expectations of analyst of 6.5%.
The global recovery of 2021 will continue in 2022, with a lower rate because of a slower rebound since the re-openings of the countries.
In 2022, Canadian households will continue to be critical to the country’s economic recovery. They are well-positioned to help the economy, thanks to the money they saved during the pandemic, which has provided them with a small cushion to withstand inflation. However, when constraints on the services sectors gradually loosen, their consumption habits are projected to revert to normal.
The outlook for the Canadian economy in 2022 remains positive. In the first few months of the new year, GDP should return to pre-pandemic levels, while some factors that led to the slowdown in the second half of 2021 will weigh more heavily on the recovery.
Top Industries in Canada
Service industry
The service industry in Canada accounts for a whopping 80% of the country’s GDP and employs nearly three-quarters of the workforce. Retail, business, education, and health care industries provide for the majority of the sector’s revenue.
Manufacturing
The manufacturing industry in Canada is involved in the transformation of materials or substances into new products, either physically or chemically. These items could be final goods for human consumption or semi-finished goods for use in manufacturing operations.
Mining, Quarrying, and Oil and Gas Extraction
The extraction of naturally occurring minerals is the primary focus of Canada’s mining, quarrying, and oil and gas extraction industries. Oil and gas extraction dominates the business, while other mining activities include coal mining and the extraction of a variety of metals such as gold, silver, copper, nickel, and others.
Real Estate, Rental, and Leasing
The real estate, rental, and leasing industry in Canada is made up of businesses that do things like real estate management, selling, renting, or buying real estate for others, appraising real estate, renting and leasing tangible assets like automobiles, and leasing nonfinancial intangible assets like copyrighted works.
5 Reasons to Consider a business expansion in Canada
1. International Trade Networks
Canada is the only G7 country that offers investors preferential market access to over 1.5 billion consumers in 51 countries.
A business with a Toronto address is in the epicenter of the financial and political sectors of North America, with close proximity to New York, Chicago, Boston, and Washington D.C. This gives your business quick and easy communication and travels with many other major cities and regions.
Business owners in Canada benefit from several international trade agreements, like the North American Free Trade Agreement and the Comprehensive Economic Trade Agreement between Canada and the European Union.
This expands Canada’s reach to more than a billion consumers across the United States, Mexico, and the European Union.
2. Canada’s Stable Economy
As we mentioned earlier, Canada was ranked number nine in terms of GDP in 2020. From 2005-2014, Canada experienced stable economic growth. The economy remained strong even through the global financial crisis of 2008.
Forbes states that Canada’s stable economy comes from early intervention by the Bank of Canada and the organization’s conservative lending practices. The financial damage was not as severe when compared to the banks in the USA.
After the Covid-19 pandemic hit the world in 2020, Canada showed signs of growth in 2021 and its economy will continue to grow in 2022, based on current projections.
This is the perfect opportunity for foreign business owners to expand in a growing market like Canada with low risk.
3. Highly Skilled Workforce
Canada has a large number of skilled people in the workforce because of its prestigious universities and institutes for vocational training.
According to the Organization for Economic Co-operation and Development (OECD), 62% of 25-34-year-olds in Canada have a secondary education;