Shipping from US to Canada with Canadians in Mind

Canadian Demographics - Accessibility and Remoteness of Population

According to the 2006 Canadian Census, nearly 25 million people, or more than four-fifths of Canadians 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.

For the 8 million consumers and businesses that are not located near established urban routes, delivery options can be challenging. For example – how would your business arrange shipping in Canada to customers living in the remote Northwest Territories, with a population density of 0.03 people per square kilometer, or to Manitoba with a population density of 2.1 people per square kilometer, or to the populations living on any of Canada’s 15 populated islands?

Source: Statistics Canada

Understanding the Uniquely Canadian Culture

As close as the U.S. and Canada are geographically and even with similar cultures, it’s important to remember that the two countries have distinct and unique cultural differences as well. Here, courtesy of Purolator International, are a few important facts to be aware of when considering expanding and shipping to the Canada market:

National Pride is a Factor in Purchasing Decisions
With so many cultural similarities and such close geographic proximity, it’s not surprising that Canadians have a strong awareness of, and interest in American brands. It’s important to note, however, that Canadians also exhibit strong feelings of national pride and may prefer to do business with other Canadians.

How strong is this preference for Canadian brands? A 2010 study by the Gandalf Group, on behalf of Toronto-based advertising agency Bensimon Byrne, 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.

In addition, 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 23 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.

Canadian Customs Brokers Understand Canadian Economics

Snapshot of the Canadian Economy

Like virtually every industrialized nation, Canada was negatively impacted by the global economic recession. However, the impact was not as severe on the Canadian economy as it was on other Western European nations and in the United States. Unemployment in Canada peaked in August 2009 at 8.7 percent, and had dropped to 8.1 percent by August 2010 (Source: Statistics Canada). By comparison, unemployment in the U.S. hit 10.0 percent in December 2009, and stood at 9.6 percent at the end of September 2010 (Source: U.S. Bureau of Labor Statistics).

Canada’s recovery from the economic recession has been somewhat shaky. In July 2010 the Bank of Canada reported that the “Canadian economy is now producing almost as much as it did just before the recession hit.” This optimism hit a bump however, when government-and-consumer-fueled spending contracted somewhat in July, resulting in a 0.1 percent decline in the GNP. This slowing of the economy caused economists to revise their forecasts downward – Canada’s economy is now expected to grow by 3.5 percent in 2010 and by 2.9 percent in 2011. A major factor in Canada’s ability to recover will be the U.S. market’s demand for Canadian exports. This fact drives home the interdependence of the two countries’ economies.

From a monetary perspective, the Canadian dollar remains competitive against its U.S. counterpart. It’s worth noting however, that 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 advantaged gradually diminished to the point that, in 2007 the Canadian loonie reached parity with the U.S. dollar. Since then, the two currencies have incentitraded at near-parity.

The relatively 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 within range of many Canadian consumers.