Your guide to exporting to Canada

Want to sell to our neighbor in the north? Use our export to Canada guide

Read the source article by The International Trade Administration (ITA) here.

Canada is America’s number one trading partner. eCommerce trade between the two countries amounts to $2bn a day – and the Great White North offers many more opportunities for businesses looking to expand their horizons.

1 Why export to Canada?

Canada is America’s number one trading partner. eCommerce trade between the two countries amounts to $2bn a day – and the Great White North offers many more opportunities for businesses looking to expand their horizons.

Strong trading relationship

The U.S. and Canada enjoy the world’s largest and most comprehensive trading relationship, with $1.9 billion of goods and services passing between the two countries each day. It’s so big, that the $298.7 billion of goods exported to Canada in 2018 exceeded those to China, Japan, South Korea and Singapore combined.

In 2017, vehicles were the largest export commodity (at $51 billion), followed by machinery ($42 billion), electrical machinery ($25 billion), mineral fuels ($19 billion) and plastics ($13 billion).

There’s also a buoyant export market for U.S. services to Canada, valued at $61.8 billion in 2018. Sales of services in Canada by majority U.S.-owned affiliates were $117.2 billion in 2016.

Mutual interests

The U.S. is Canada’s main source of foreign direct investment (FDI). In 2017, U.S. investment stock reached $391.2 billion – up 6.8% from 2016. Similarly, Canadian investment in the U.S. hit $524 billion in 2017, making Canada our second-largest source of FDI. What’s more, Canadian firms with a presence in the U.S. employ around 679,400 people, contribute over $1 billion in research and development, and have helped increase U.S. exports by over $14 billion.

Market potential

Canada has a slightly larger geographic footprint than the U.S., and its diverse population of 37 million people is among the most educated in the world.

Shared cultures

In 2018, U.S. travelers made 14 million trips to Canada and spent nearly $10 billion there. Likewise, Canadians made 21 million trips visiting the U.S. and spent almost $22 billion – making it Canada’s most popular international tourism destination. With so much shared culture between our two nations, you can most likely leverage your existing eCommerce operation and make very few changes in terms of product descriptions or your site’s overall look and feel.

Being so culturally close also means Canada is very open to using and buying U.S. goods and services, with Canadians already spending more than 60% of their disposable income on imports from across the border.

Plus, of course, while Canada’s official languages are French and English, it’s the latter that’s most widely spoken – rendering your cross-border expansion that much easier to plan and manage.

Proximity

Being so close means logistics are well integrated between the U.S. and Canada, especially in the automotive sector. That makes it easier and cheaper for firms to do business. In fact, each day, some 380,000 people travel between the two countries.

Economic stability

Canada has one of the world’s most stable political and banking environments, and a strong economic growth record. According to Forbes, it’s the sixth-best country in the G20 to do business with.

2 Selling your product or service online?

eCommerce is one of the most popular ways for many American companies to reach new customers in Canada. But before jumping in, here are a few things to think about.

Import duties

While duties on most products into Canada are zero, shipments of goods above CAD $2,500 in value need a NAFTA Certificate of Origin. Different taxes and tax rates may apply, and regulations around certain industries differ slightly to those in the U.S.

Currencies

Making your offering as transparent as possible will encourage Canadians to buy from you – so always price your products in Canadian and U.S. dollars. You can also use the non-resident importer program to identify all costs up-front, and ease the movement of goods.

Distributors

You may also need to find a Canadian distributor to help with your export plans, and this U.S. government website will help you find a suitable trade show to assist with this process.

Packaging

Labeling needs to be in both English and French – and there are additional requirements for goods sold in Quebec.

Government regulations

Regulations around tax and business activities are managed at the federal, provincial and local level, so allow yourself time to navigate your way through it all.

3 Sources

For more information and advice, explore the country commercial guides on export.gov, or contact the U.S. Commercial Service.