Why expand to Canada from the US
If you’re looking to grow your US business, expanding to Canada is the most logical next step. It’s a natural extension of the US as our neighbor to the north. It also has one of the most thriving economies in the world, which is ideal for broadening your reach in consumer goods.
Let’s take a look at why you should expand to Canada from the US.
Cultural familiarity
Expanding to Canada from the US makes sense because it’s incredibly close.
If your business is in any of the northern US states, Canada is quite literally your neighbor, not to mention that it’s within the same time zones as the US. This makes logistics incredibly easy in terms of shipping products, scheduling meetings, and even potential trips for business meetings.
It’s also a primarily English-speaking country. Out of 35 million Canadians, 22.8% of the population speak french. The US technically doesn’t have an official language, but upwards of 75% only speak English.
Canada’s prominence in French speakers is actually beneficial in terms of business. In recent years, French has grown in status as a business language in the corporate environment. The ability to communicate in French gives your business a better chance at successful expansion in the future.
Additionally, Canada has many of the same corporate traditions as the US. For example, both Canada and the US handshake upon greeting, while a bow is the corporate custom in Japan.
This is not to say that you shouldn’t expand to Japan. But learning and adapting to foreign customs is an important initial step in expansion before selling abroad and working with overseas vendors.
Adapting is important when it comes to advertising and building your new customer base as well:
"When expanding to another country, it's important to optimize your business for quick growth and scalability. On the surface, expanding from the United States to Canada may appear "easy." However, from a brand awareness perspective, you're likely starting back at square one. Advertising, retargeting and audience-building are critical to brand-building as you expand and can help you leapfrog what can often be a painfully slow start to take full advantage of your new marketplace."
-Tyler Henderson, Head of Partnerships, Carbon6
[Related: USF financial operations guide for outsourcing and offshoring service providers]
Highly skilled workforce
Growing your business in Canada gives you access to a large talent pool with some of the most skilled, diverse, and educated workers in the world. For starters, Canada ranks third in the world for education, with 61% of its 25- to 34-year-old population having a tertiary education.
Here are some additional reasons that Canada’s talent pool is so sought-after:
Canada ranks No, 1 in access to qualified engineers in Group of Seven (G7). G7 refers to the seven countries that have the most advanced, largest economies in the world, including the US, Germany, Japan, the UK, France, Italy, and Canada.
There are over 2.8 million science, tech, engineering, and mathematics (STEM) graduates.
More than 200 languages are spoken in Canada.
Canada ranks fifth in the world for workforce diversity.
World-class talent is abundant across a range of major industries in Canada. Whether your business is looking for highly skilled foreign contractors, graduates from top universities, or to diversify your international workforce, you can find it in the Great White North.
Growing economic prestige
Canada’s economy has been steadily growing in strength for some time now — especially since it managed to avoid the 2008 financial crisis.
What’s more, the Organization for Economic Co-operation and Development (OECD) is forecasting that Canada’s economy will expand by 3.8% in 2022.
The OECD is a group of 37 member countries that discuss and develop social and economic policies. Most member countries are democratic and support free-market economies.
Some of the most thriving areas in the Canadian economy are banking, transportation, and manufacturing. This makes large cities such as Montreal, Toronto, and Vancouver especially attractive in terms of global business expansion.
Beneficial business environment
Canada is also ranked eighth in the world’s top countries to start a business.
This is mostly due to its low corporate tax rate (15%) and the support it offers to small- and medium-sized businesses (SMBs). Canada provides a range of government loans and grants to support entrepreneurs and eager-to-grow startups.
There are also beneficial trade agreements such as the Canada-United States-Mexico Agreement (CUSMA), the Clean Energy Transformation Act (CETA), and the Trans-Pacific Partnership (TPP):
CUSMA: CUSMA allows goods and services to easily move across the North American borders. It also allows citizens of the US and Mexico to easily enter Canada to increase investment opportunities and promote fair competition in the market.
CETA: CETA has a set of trade standards for goods and services, as well as nontariff barriers, investments, labor, and more.
TPP: TPP is a trade agreement between 11 countries, including Canada, Mexico, and others in the Asia-Pacific region. It eliminates 18,000 taxes on Made-in-America products.
Canada also has a Start-Up Visa Program that is particularly beneficial for business owners looking to sell in foreign markets
Prominent eCommerce industry
One of the biggest benefits of expanding to Canada is its prominent eCommerce marketplace.
Ecommerce has nearly doubled since 2019 thanks to Canada’s rising digital population. This led to a rapid increase in the number of eCommerce businesses, such as eBay, Amazon, Kijiji, and more, which fueled the high demand for jobs and services in this sector.
A growing eCommerce industry results in the need to streamline payments, avoid bank transfer delays, and manage financial transactions. Global fintech platforms such as Airwallex make it easier for businesses of all kinds, but especially eCommerce, to expand and pay globally distributed teams.
Airwallex offers foreign currency accounts in USD, EUR, GPB, and AUD. We have competitive FX rates when transferring money, instant payouts with payment links, borderless cards, and zero monthly account fees to make your expansion to Canada from the US as easy as possible.
[Related: Nine top trends in international accounting for 2022]
Contact Airwallex to facilitate your expansion to Canada
Expanding to Canada is a great next step for your US business. If you’re ready to make the move, don’t hesitate to create a global business account with Airwallex. Sign up for free to get started.
Airwallex further simplifies your Canadian expansion by partnering with other businesses that can help you. For example, PointStory can help with the logistics of branding and advertising.
"By launching on Amazon in Canada, you can take advantage of PointStory’s logistics prowess by attaching the Prime badge next to every item that you sell on the marketplace. Amazon will be able to deliver your products to most residents in Canada within two days of order. We've seen this delivery promise increase order volume by up to 25% vs. offers that don't leverage FBA (Fulfillment By Amazon)."
-Tik Yip, Co-founder, PointStory
Whatever you need help with, Airwallex and its partners have you covered.
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