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Canada: a booming economy with a highly skilled workforce

Canada is often referred to as the gateway to the Americas. But the Great White North is also a very attractive region in its own right and one that offers a less complex market than that of its American neighbour.

Canada is often referred to as the gateway to the Americas. But the Great White North is also a very attractive region in its own right and one that offers a less complex market than that of its American neighbour. For example, in Canada, starting a business is a fast and user-friendly process, taking just a day and a half. You can both apply for a new business license and receive approval online.

In addition to its prime location – which allows easy access to both the US and Europe, as well as good connectivity with the rest of the world – Canada’s workforce and its robust, growing economy make it a very attractive country to consider expanding into.

In 2021, Canada's annual exports reached a record $637 billion, exceeding the previous record set in 2019 by 7.0%.1

According to the latest World Bank annual ratings, it ranks 23rd out of 190 economies for ease of doing business.2 It is one of the most attractive OECD countries for highly qualified workers and comes out as the most attractive OECD country for entrepreneurs.3 There’s also an array of government funding support programmes, which come with a range of benefits, available for entrepreneurs and foreign investors.

Within the G20, Canada offers the best environment to do business for the next five years and had the second-largest foreign direct investment (FDI) stock to GDP ratio over the 2016-2020 period.4

Extensive trade connections provide excellent access to new markets

In 2020, Canada’s annual GDP was $1.64 trillion in current USD, making it the world's ninth-largest economy.5

The International Institute for Management Development (IMD) ranks Canada 14th globally for its overall economic competitiveness, and the country’s growth rate ranged from 1%-3% in the decade leading up to 2020. Unemployment rates are low and minimum wages are rising – a combination that tends to result in high levels of disposable income. Trade freedoms, low corporate taxes and a stable political environment make it a secure and reliable economy.6

Canada is the only G7 country to have trade agreements with all six other G7 countries. It also belongs to an extensive network of trade deals – including the 12-nation Trans-Pacific Partnership (TPP) and the Canada-EU Comprehensive Economic and Trade Agreement (CETA) – that span the globe, opening the door to markets in 51 different countries and 1.5 billion people internationally.7

The United States-Mexico-Canada Agreement (USMCA) came into force on July 1, 2020, replacing the North America Free Trade Agreement (NAFTA).8 The new agreement was designed to create balanced, reciprocal trade that supports high-paying jobs for Americans and grows the North American economies. Since its implementation, it has provided access to nearly half a billion consumers and a combined GDP of more than $24.2 trillion.9

The result is that Canada provides outstanding trade access to countries across the globe. This means Canada is not just an opportunity in its own right, it facilitates access to new markets, providing an opportunity for businesses to balance the risk of operating in Canada with the possibility of growth that comes from global access.

A strong but cost-effective labour pool

The IMD ranks Canada 8th in the world in terms of the competitiveness of its workforce.10 This is down to the fact that the labour pool here is highly skilled and educated, yet more economical than in the US.

The country consistently sits near the top of the charts when it comes to its citizens’ attainments; 63% of Canadian residents aged 25 to 34 have completed degrees or certificates, making it one of the countries with the highest percentage of nationals with post-secondary education. Canada also boasts a workforce that is adept and technical overall, owing to the fact that there are a high number of quality vocational programmes on offer.11

There is a deep, diverse talent pool in the tech and innovation sectors in Canada, which strongly supports the likes of green tech, healthcare and advanced manufacturing. Wages in these sectors, however, are significantly lower in Toronto than in San Francisco.

Potential sectors with strong growth opportunities

Canada has an ambitious plan to achieve 40-45% emissions reductions below 2005 levels by 2030 and achieve net-zero emissions by 2050. This will create significant new opportunities in renewable energy, green technology and sustainable innovation.

As the only country in the Western Hemisphere that has all the critical minerals required to manufacture electric vehicle (EV) batteries, Canada is well positioned to stake a claim in this industry. Canada currently ranks 1st in North America and 4th in the world for raw material capabilities in the battery supply chain. A recently announced $4.9 billion EV battery manufacturing plant coming to Windsor, Ontario, is an example of this trend.

Canada’s technology industry is one of the strongest in the world thanks to a deep and competitive talent pool and government initiatives to bring new tech companies from across the globe to Canada. Canada’s technology industry is currently growing fast in digital media, wireless infrastructure and e-commerce.

Canada’s agricultural sector, meanwhile, is steadily growing every year and accounts for 8% of the country’s GDP12. Accommodation and food services continue to grow, too, as does construction, transportation and warehousing and the arts, entertainment and recreation13. Skilled manufacturing, healthcare, commercial banking14 and services, which accounts for a remarkable 80% of Canada’s GDP and employs almost three quarters of the entire country15, are also very important sectors.

Challenges for businesses coming to Canada

While there’s an array of perks that come with expanding into Canada, the country is not without its hurdles.

The most common one is navigating regulations. Each province has its own rules in addition to federal law. This means that if you plan to ship products through the country, you will need to comply with the packaging, labelling, certification, and customs regulations in all of the provinces that your goods will be travelling through. Regulations such as quota agreements also exist with regard to some international exports and markets.

Businesses will also have to contend with labour costs that extent beyond wages and salaries. Many employers, for example, provide health insurance. Employees in Canada are also entitled to a full complement of benefits, including paid vacation time and paid state holidays.

Other issues that you might be faced with include dealing with unfamiliar tax laws, handling social and political issues that affect business as well as the time-consuming and often litigious process of establishing a physical presence, should you wish to do so.16

International Subsidiary Banking

Any time that an organisation is looking to effectively transition into a new market, they should be partnering with a bank that has an international approach as well as vast experience with other global businesses. It’s even better when they partner with the same bank that provides banking services in their home market and all international markets.

HSBC’s International Subsidiary Banking model can aid you in terms of overcoming any of the hurdles that you may encounter when entering into a country such as Canada. We have detailed knowledge of the market and understand its unique challenges so we can work closely with you to navigate the market complexity.

We can help you to stay in control of your finances by tracking them globally and in real-time with HSBCnet. We can assist you in optimizing your cash management to free up cash flow – making capital available for investment in your organisation’s future. Clients can also access flexible financing solutions across our global network in order to expand their business effectively or lean on us for support when it comes to identifying growth opportunities.

Solutions will be tailored to you and your business – providing better use of working capital as you expand into this exciting new area – and, crucially, financial communications will be streamlined – helping to make this transition as smooth and uncomplicated as possible.


HSBC Canada is the seventh largest bank in Canada, with offices in all but one province. We are also the largest foreign-owned bank in the country.

No international bank has our Canadian presence, and no domestic bank has our international reach. We have the local expertise and insight to help you navigate the market with confidence, combined with the global scope and scale to help you achieve reach both in Canada and internationally.

Our specialist teams, based in the four largest regions in the country, can provide clients with a broad range of products and services to support their expansion in the market. By partnering with HSBC, companies looking to move into this region can lean on us for extensive support.

HSBC is in a unique position to provide a comprehensive structured trade solution to improve your working capital efficiency, better manage your supply chain risks and enable strong business growth.

Our global HSBCnet platform and advanced cash management solutions also help business better manage their cash flow, cut down manual processes, and reduce costs whilst enhancing return of surplus fund. All of this will be carried out by specialists with vast experience working with multinationals.

Hong Kong: free markets, unique trade access and an enviable location

Hong Kong is home to a robust and ever-expanding economy. Its renowned free trade, free markets, and free enterprise present an abundance of growth and profit opportunities for businesses. Find out more in this short article focused on growing in the region.

Find out more

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