Population (2019): 37,589,262
GDP (2019): 1.74 trillion
Ease of Doing Business Ranking (2019): 23nd
Bilateral Trade (2019-20): US$ 6.73 billion
The leading G7 nation in economic growth
Canada had the strongest economy among the G7 nations in 2017, with a growth of 3% which exceeded the United States and Germany. In 2019, Canada’s highly developed mixed economy is the world’s tenth largest by nominal GDP.
Indian businesses can find varied demographics of potential customers in Canada, many of which have significant spending power.
With a per capita GDP of around US$46,194.73 as of 2019, Canada is among the top 20 affluent countries in the world. The country’s consumer base is bolstered by its multiculturalism and acceptance of new immigrants. This creates a diverse range of buyers and spending habits, particularly in relation to food shopping.
Well-educated and highly-skilled workforce
Setting up your business in Canada gives you easy access to a well-educated workforce.
Canada has one of the highest proportion of university graduates among developed nations. The majority of Canadians (54%) hold at least an undergraduate degree. Its culture is also accommodating to migrant workers and attracts a high influx of well-educated immigrants4. Immigrants, who account for a quarter of the Canadian workforce, are more than twice as likely as natives to have post-graduate degrees.
There is clear benefit for Indian companies to consider Canada if you are interested to expand to North America. Canada resembles the United States with its capitalist economy but is more cost-competitive, providing an average 20% savings on qualified talent compared to their American counterparts.
Abundance of natural resources
Canada’s abundance of natural resources and agricultural produce spell opportunities for Indian companies in industries such as wholesale trade, or oil and gas.
Canada is the fifth largest agricultural exporter in the world. In particular, Canada is known for its export of wheat and grains, for which it is the world’s second largest exporter next to Russia.
Canada is also the world’s largest producer of potash for agriculture, second largest producer of niobium for superconducting materials, and the fifth largest producer of coal. Other major produce include natural gas, aluminium and diamonds.
The oil and gas sector contributed nearly 10% of Canada’s GDP. Canada is the fourth largest producer and exporter of oil in the world, producing about 4.2 million barrels per day. As of 2017, Canada had reserves of 167.7 billion barrels of crude oil, giving it the third largest oil reserves on the planet. It is also one of the few developed countries to be a net exporter of energy. There are a lot of opportunities for India’s oil and gas businesses in Canada.
High levels of economic freedom, coupled with strong judicial regulation
According to the 2020 Index of Economic Freedom, Canada’s economic freedom score is 78.2, making it the ninth freest economy in the world. International trade has long been considered a cornerstone of the country’s economy, with the combined value of exports and imports accounting for 64% of its GDP.
If you invest in Canada, you will have full and fair protection under Canada’s legal system, with few restrictions on the rights to private property. Canada’s protection of intellectual property rights meets world class standards: the judicial system is independent and transparent, and enforces contracts vigorously7.
As of 2017, Canada is home to 58 companies on the Forbes 2000 list, ranking seventh in the world.
Indian businesses will find Canada to be a familiar environment, with low levels of corruption and clear delineated roles of government in business.
Technology and Innovation
India’s tech companies can find strong interest in tech and innovation in Canada, in addition to a variety of digital products and services.
Vibrant tech innovation scene
The Canadian cities of Montreal, Toronto and Vancouver regularly rank high as top centres for tech innovation:
Montreal is a noted centre for tech startups, often hosting companies in the fields of Artificial Intelligence (AI), video games development, virtual reality, and wearable technology.
Toronto is a hub for AI innovation and research – Sidewalk Labs, a company under Google’s parent company, has a S$50 million contract to develop the world’s first neighbourhood “built from the internet up”.
Vancouver’s tech scene has seen growth in the infocomm technology, interactive digital media, life sciences and renewable energy sectors.
Strong government backing
The Canadian government is highly supportive of the tech industry boom. It has an extensive Innovation and Skills Plan to establish the country as a world-class innovation and tech hub. This includes a S$1.26 billion Strategic Innovation Fund for companies to develop and commercialise cutting-edge products and services.
Sizeable tech sector workforce
To expand into the Canadian market, your company can also tap into the innovative strength of Canada’s tech sector workforce. Part of the reason for Canada’s tech-centric workforce is its Start-up Visa Program. This is an immigration programme specifically targeted at entrepreneurs who have business ideas that are innovative, can create jobs for locals, and can scale internationally.
Steady growth in technology sub-sectors
Canada’s tech industry also registers steady growth in sub-sectors such as aerospace technology. The country is home to more than 700 aerospace companies, contributing around S$12.6 billion to GDP in 2017. India’s aviation companies can find opportunities and a business-friendly environment in the country.
Infrastructure and Smart Cities
Canada is noted for having some of the world’s largest domestic pension funds. The most significant of these, the Canada Pension Plan Investment Board (CPPIB), actively invests in infrastructure projects.
As of March 31, 2019, the CPPIB stands at around S$392 billion. 53% of the board’s assets are in North America, while a sizeable 23.5% are located in Asia Pacific. The CPPIB currently manages around 30 distinct investment programmes – these include 17 major infrastructure projects in countries such as Australia, Chile, India, and the United Kingdom.
Canadian pension funds are also increasingly focused on domestic public infrastructure. The Quebec Deposit and Investment Fund, for example, recently invested around S$1.3 billion into building a 67-kilometre light rail network for Montreal. These projects are part of Canada’s ongoing support for Smart City programmes.
Indian infrastructure and engineering companies can thus explore partnerships with Canadian counterparts, in infrastructure projects within ASEAN nations as well as in Canada.
The Canadian government has also launched an Investing in Canada plan which will inject more than S$184.1 billion into the country’s infrastructure over 12 years. This will fund infrastructure projects in the fields of green energy, public transit, social development, trade and transportation, and rural and northern communities. Indian companies in relevant fields can find opportunities to collaborate with Canadian partners, as the various projects gain momentum.
The service sector is the largest in Canada, accounting for 70.2% of the country’s GDP in 2017. Around four in five Canadians are employed in the service sector, and 60% of the country’s fastest growing exports over the past decade were services.
Retail is the largest component of the service sector, with major companies such as Walmart, Best Buy, and Future Shop being well established in the country. The second largest portion of the service sector comprising financial services, along with real estate and communications, are also seeing rapid growth. These business services are contained primarily in the urban centres of Montreal, Toronto and Vancouver.
Bilateral trade between India and Canada was worth US$6.72 billion in 2019-20. India’s exports to Canada during this period were US$ 2.95 billion and imports from Canada were US$ 3.88 billion. Canadian Pension Funds have invested approx. US$ 12.6 billion in India till now and are increasingly viewing India as an attractive destination for investments. More than 400 Canadian companies have a presence in India, and more than 1,000 companies are actively pursuing business in the Indian market. Indian companies in Canada are active in sectors such as Information Technology, steel, natural resources and banking. Notable Indian companies which have invested in Canada include ICICI Bank, State Bank of India, Mahindra Tractors, Tata Steel Minerals Canada, Tata Consultancy Services, Jaguar Land Rover, Tata Communications and Indian Oil Corporation, Aditya Birla Group, Jibilant DraxImage Inc., Infosys Technologies Limited, Tech Mahindra, ESSAR Steel Algoma Inc., IFFCO Canada Enterprise Ltd., Abellon Energy Inc., WIPRO Technologies and Prime Focus World.
India and Canada are discussing Comprehensive Economic Partnership Agreement (CEPA) and Bilateral Investment Promotion and Partnership Agreement (BIPPA/FIPA). The 4th Annual Trade Ministerial Dialogue was held on 13 November 2017 in New Delhi. Canadian Minister of International Trade Mr. Francois Philippe Champagne and Union Minister of Commerce and Industry, Shri Suresh Prabhu chaired the meeting. During the meeting, both sides expressed their strong commitment for early finalization of a progressive, balanced and mutually beneficial CEPA and BIPPA. The last round of CEPA negotiation was held in Ottawa on February 7-8, 2018, while the last round of BIPPA negotiation was held in New Delhi in November 2017.
An India – Canada CEO’s Forum was constituted in 2013 to improve bilateral trade and investment flows. The Forum identified natural resources, infrastructure, education, information and communication technology and financial services as priority sectors.
Major items of India’s exports to Canada include apparel, clothing, iron and steel, pharmaceuticals, etc.
|Product Code||Product Label||India’s exports to Canada in 2019 (US$ million)|
|73||Articles of iron or steel||334.99|
|84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||228.60|
|87||Vehicles other than railway or tramway rolling stock, and parts and accessories thereof||162.48|
|71||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad||129.68|
|63||Other made-up textile articles; sets; worn clothing and worn textile articles; rags||122.01|
|61||Articles of apparel and clothing accessories, knitted or crocheted||119.06|
|39||Plastics and articles thereof||104.26|
|62||Articles of apparel and clothing accessories, not knitted or crocheted||103.94|
According to the ITC Trade Map, India has an untapped trade potential of US$ 2.6 billion. The products with greatest export potential from India to Canada are Medicaments consisting of mixed or unmixed products, for retail sale, Motor vehicles for the transport of persons, nes, and Shrimps & prawns, frozen. Motor vehicles for the transport of persons, nes shows the largest absolute difference between potential and actual exports in value terms, leaving room to realize additional exports worth $327.1 million.
|Product code||Description||Untapped Export potential|
|3004Xb||Medicaments consisting of mixed or unmixed products, for retail sale||US$ 171.1 million|
|8703XX||Motor vehicles for the transport of persons, nes||US$ 209.7 million|
|0306Xb||Shrimps & prawns, frozen||US$ 65.7 million|
|711319||Jewellery, of precious metal, nes||US$ 42.1 million|
|100630||Semi-milled or wholly milled rice||US$ 64.4 million|
India’s imports from Canada include machinery, mineral fuels, precious metals, fertilizers, paper, etc.
|Product Code||Product Label||India’s imports from Canada in 2019 (US$ million)|
|27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral||1,301.19|
|7||Edible vegetables and certain roots and tubers||439.31|
|71||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad||395.86|
|47||Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper||308.44|
|84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||184.89|
|48||Paper and paperboard; articles of paper pulp, of paper or of paperboard||159.53|
|72||Iron and steel||154.80|
|26||Ores, slag and ash||116.28|
|85||Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television||82.89|
High Commission of India
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CONSULATE GENERAL OF INDIA, TORONTO
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CONSULATE GENERAL OF INDIA, VANCOUVER
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