Understanding the Canadian Market

Canadian Demographics - Accessibility and Remoteness of Population

According to the 2011 Canadian Census, more than 23 million people, almost 70 percent of the population, live in urban areas.  Ninety percent of the Canadian population lives within 100 miles of the U.S. border.  This means that the overwhelming majority of the Canadian population is easily reachable through traditional distribution routes.

 

But for the 10 million consumers and businesses not located near established urban routes, delivery options can be challenging.  For example, how would your business arrange shipping to Canadian customers living in the remote Northwest Territories, with a population density of zero people per square kilometer, or to Manitoba with a population density of 2.2 people per square mile, or to the populations living on any of Canada’s 15 populated islands.

 

Geographic Name

2011 Population

Population density per square kilometer, 2011

Canada

33,476,688

3.7

Newfoundland and Labrador

514,536

1.4

Prince Edward Island

140,204

24.7

Nova Scotia

921,727

17.4

New Brunswick

751,171

10.5

Quebec

7,903,001

5.8

Ontario

12,851,821

14.1

Manitoba

1,208,268

2.2

Saskatchewan

1,033,381

1.8

Alberta

3,645,257

5.7

British Columbia

4,400,057

4.8

Yukon

33,897

0.1

Northwest Territories

41,462

0.0

Nunavut

31,906

0.0

Source:  Statistics Canada

 

Understanding the Unique Canadian Culture


As close as the U.S. and Canada are geographically, it’s important to remember that the two countries have distinct and unique cultures.  Following are a few important facts to consider as you plan to ship to the Canadian market:

National Pride is a Factor in Purchasing Decisions

Canadians have a strong affinity for goods and services produced in Canada, and are fiercely proud of their local brands.  A 2010 “consumerology report” by Bensimon Bryne advertising agency, found that two-thirds of Canadians said that corporate reputation affects their brand choice, and 56 percent said that being Canadian-owned is a favorable advantage, along with 59 percent who said that local job creation is a key factor.  This would seem to affirm the findings of a 2005 survey by Leger Marketing which reported that 63 percent of respondents have an interest in whether or not the products they purchase are made in Canada – and are willing to pay up to 13 percent more for homemade goods.

 

A separate survey conducted by Leger ranked companies that earned the highest respect among Canadian consumers. In 2009 the survey found that of the top 20 most respected companies, half are Canadian brands. Companies including Tim Horton’s, Shoppers Drug Mart and Purolator ranked prominently, indicating a distinct streak of national pride among Canadian consumers.

 

Thus it seems obvious that a U.S. business interested in expanding to the Canadian market would be wise to align itself with distinctly Canadian business partners.

 

Consider this advisory from Doing Business in Canada: A Country Commercial Guide for U.S. Companies: “The key to achieving market penetration for export sales to Canada is making the transaction resemble as much as possible a Canadian domestic transaction for the Canadian customer.”

 

English is the Official Language of Canada – and so is French  


Canada has adopted both French and English as its official languages, with roughly 22 percent of the population listing French as their preferred tongue. While most native French speakers live in Quebec (where French is the sole official language), there are approximately one million additional French speakers interspersed throughout Canada. This has resulted in sizeable pockets of French-speakers located throughout several provinces.

 

Businesses interested in expanding and shipping in Canada, and building relationships with Canadian consumers, would be well served to have some degree of French proficiency. Not only will an understanding of the French language facilitate communication, but also it will demonstrate an awareness of, and appreciation for Canada’s cultural heritage.

 

By working with an established Canadian freight partner, a U.S. company can leverage that partner’s ability to provide bilingual customer support, and can benefit from the partner’s visibility (and ideally, prestige) in French speaking areas. The partner will also be more familiar with the requirements of conducting business in a country with two official languages.

 

Snapshot of the Canadian Economy


Like most industrialized nations, Canada was negatively impacted by the global economic recession. However, the impact was not as severe on the Canadian economy as it was on Western European nations and in the United States. Unemployment in Canada peaked in August 2009 at 8.7 percent, and had dropped to 7.1 percent by December 2012 (Source: Statistics Canada). By comparison, unemployment in the U.S. hit 10.0 percent in December 2009, and stood at 7.8 percent at the end of December 2012 (Source: U.S. Bureau of Labor Statistics).

 

By early 2013 however, analysts were predicting a slow period of growth for Canada, due largely to a sharp decline in exports to Europe.  A January report by Bloomberg news noted that “Growth in the world’s 11th largest economy slowed to a 0.6 percent annual pace in the third quarter as exports fell the fastest since the end of the 2009 recession, and [current data] suggest the expansion didn’t accelerate much in the fourth-quarter, leading to what could be the worst six month performance since the 2009 recession.”  As a result of negative indicators, several Canadian economists revised their economic forecasts downward.

 

From a monetary perspective, the Canadian dollar remains competitive against its U.S. counterpart. The current strength of the Canadian dollar marks a steep departure from the historical supremacy of the U.S. dollar. In fact, the two currencies were at one point so lopsided, that in 1998, the Canadian loonie was valued at US $0.63 – putting U.S. businesses and consumers at a steep buying advantage in the Canadian market. This advantage gradually diminished and in 2007 the Canadian loonie reached parity with the U.S. dollar. Since then, the two currencies have fluctuated in value.

 

The new competitiveness of the Canadian dollar has made the U.S. an attractive source of consumer goods and supplies. Materials that were once prohibitively expensive are now affordable options for many Canadian consumers.