With a surface area of nearly 10 million km², Canada is the second largest country in the world. Despite this immense territory, Canada's population is only slightly more than half that of France: 38 million inhabitants according to the latest estimates. The low fertility rate as well as the progressive increase in life expectancy are at the origin of the aging population that Canada is facing.
In order to solve this problem, Canada has resorted to massive immigration for centuries. It is estimated that nearly 22% of its population was born abroad, mostly in Asia. Large cities such as Toronto, Vancouver and Montreal remain the place of residence. Thanks to this massive influx, the population has grown by 5.2% since 2016, making it the fastest growing G7 country in terms of population.
Immigrants contribute to the social, economic and cultural development of the country. The latest statistics show that 1 in 4 Canadians have a mother tongue other than English or French. Cultural diversity is one of the main characteristics of the Canadian population. The country is known for its tolerance, its multiculturalism and the importance given to the protection of the cultural heritage of its citizens, which is enshrined in the law.
With a GDP approaching 2 billion US dollars in 2021, Canada ranks as the 9th largest economy in the world. The country is part of major international alliances including the G20, G7, OECD. Canada is recognized as the best country in the G20 to do business in and leads the G7 in terms of economic growth.
Canada's main resource is its land, which is rich in raw materials: oil, natural gas, fossil fuels and uranium. The predominance of forests is also of great interest to the Canadian economy, which benefits greatly from the timber trade. The vastness of the agricultural land allows a dynamic and diversified agriculture ranging from cattle breeding to grain cultivation. Canada is one of the world's largest agricultural exporters, particularly of wheat. Although agriculture is a major contributor to Canada's competitiveness, it is the service sector that dominates the economy, employing nearly 80% of the workforce.
Following the unprecedented crisis caused by the COVID-19 pandemic, the Canadian economy experienced its worst recession since 1945. However, the country was able to rebound quickly from the crisis as evidenced by the 4.6% GDP growth recorded in 2021.
Canada's economy is strongly based on its trade relationship with the United States. Indeed, Canada is its largest trading partner in terms of goods and services, with over $1 trillion in bilateral trade in 2021. The flexibility of import-export thanks to the free trade established between these two countries contributes greatly to the economic dynamism of North America.
Exporting is a lever for growth and profitability for companies, but it's important to find the right market. Global markets are a major lever to rebound from a crisis. Identifying the right market is essential. With 27 pages of unique content, and more than 25 exclusive statistics, discover the Canadian market and its opportunities.
Download the guideCanada is a leader in global market access. Here are the main free trade agreements in force:
→ Partner countries: United States, Mexico
Canada, the United States and Mexico have long built strong economic ties, creating the world's largest free trade region. The MEFTA went into effect in 2020 and replaces the North American Free Trade Agreement (NAFTA). This agreement provides businesses in all three member countries with easy access to millions of consumers beyond their borders.
Canada is attractive to North American investors because of the quality of its workforce and its advantageous tax rate, 46% lower than that of the United States. The MEPA is also a gateway to easy access to European markets through Canada's many other agreements.
In 2018, the value of trade under the MWTA represented 67% of Canada's international trade in 2018.
→ Partner countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.
The European Union is Canada's second largest trading partner. The GATS is a free trade agreement that provides companies with preferential access to the partner market. European companies can, for example, benefit from collaboration with Canada to gain greater access to the North American market.
The CETA protects against discrimination against EU investors and the expropriation of their investments in Canada. It also guarantees simplified customs formalities, accelerated processing times and reduced fees to promote free trade in goods between the countries. The agreement is currently in provisional application and will enter into full force once all EU member countries have ratified it.
→ Partner countries: Australia, Japan, Mexico, New Zealand, Peru, Singapore, Vietnam.
Asia-Pacific ranks as the world's leading region in terms of economic growth. The TPP aims to help open up Canada to new and growing Asian markets, such as Vietnam and Malaysia. It allows businesses in partner countries to sell their products at competitive prices by eliminating most tariffs and facilitating administrative and legal procedures.
Three countries will subsequently be added to the list of partner countries. They are Brunei, Chile and Malaysia. The TPP will form a trade bloc representing no less than 500 million consumers and will guarantee Canada preferential access to key markets in Asia and Latin America.
Five major retail chains hold over 62% of the market share in Canada. They are Loblaws, Sobeys, Metro, Costco and Walmart. Costco is the leader in wholesale sales for professionals and individuals. Other store chains specialize in a particular field such as culture (Chapters), home improvement (Home Depot), furniture (The Brick) or electronics (Best Buy).
Canadians also value small businesses as a place to shop. 86% of Canadians feel it is important to encourage small, local businesses, and two-thirds say they make an effort to buy from small businesses. Bakeries, butcher shops, and even privately owned clothing stores are known for their quality products and customer service.
Canada is one of the most connected countries in the world. According to Statista, 99.1% of the Canadian population will be using the Internet by 2022.
The pandemic has greatly contributed to the acceleration of e-commerce by promoting a new way to consume from home. E-commerce revenues have almost doubled since 2019, rising from $30 billion to over $60 billion in 2022. It is projected that these revenues will reach $90bn in 2025. The category most involved in online shopping is fashion, followed by electronics and media. The majority of spending on e-commerce sites benefits companies based abroad.
The younger generation (18-34 years old) is the group that makes the most online purchases, especially from a mobile device. Unlike in other developed countries, the older age groups are also very technology-savvy e-commerce users.
Commercial intermediaries in Canada are divided into two categories: trading companies and wholesalers (called "distributors" in Canadian French).
Trading companies are the large retailers such as Loblaws, Sobeys and Metro who centralize their purchases at their head office in order to negotiate better prices.
Wholesalers are responsible for purchasing products from multiple suppliers and then reselling them to other businesses such as restaurants, superstores or other wholesalers. Wholesalers are generally specialized in a particular sector of activity. Among the most important are Sysco for restaurants, BulkMart for supermarkets, and Gambles Produce for fruits and vegetables. For more information, the Canadian Wholesale Directory lists all Canadian distributors by industry.
Commercial agents represent companies in the Canadian market. Their mission is to create or strengthen commercial relationships with clients in a given sector. These agents are paid a commission based on the sales made in the region they represent. The percentage varies according to the sector of activity and the companies, but commercial agents are a profitable investment for small companies seeking to strengthen their presence in the territory.
The aging of the population combined with a strong purchasing power has resulted in a particular concern of Canadians for their health, their well-being and the quality of the food products they consume. The Canadian market is therefore particularly conducive to the sale of higher quality and higher priced food products, such as functional foods, gourmet foods or local products.
The wine market is a growing sector in Canada. Four provinces account for nearly 90% of wine consumption: Ontario, Quebec, British Columbia and Alberta. Although the majority of wine imports into Canada come from American countries such as Chile, Argentina or the United States, France is the leading exporter in terms of value of wines.
Some European products such as beer, cider, spirits, but also sparkling wines have a strong development potential on the North American market.
Investing to promote innovation is crucial for Canada as it seeks to close the productivity gap with its major partners, particularly the United States. Canada offers a competitive environment for R&D, with qualified personnel (94% of Canadians aged 25-34 have at least a high school diploma) and the lowest costs in the G7.
Many national and provincial programs support Canadian research and innovation. For example, the SR&ED tax incentive program provides billions of dollars in tax credits and incentives to companies performing R&D in Canada. It is one of the country's most important mechanisms for companies of all sizes to invest in R&D in Canada. Foreign companies can also benefit from this program by forming a Canadian R&D pipeline.
Among the most dynamic sectors in Canada are digital technologies, artificial intelligence and robotics.
Investing in Canada is a strategic choice for many companies looking to open up new markets. Canada's dynamic economy and the numerous free trade agreements in place make it a country of choice for investment or exporting products.
