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7 Reasons Why Now Is the Perfect Time to Expand Your Business Into Canada

Here’s why you should consider doing business in the Great White North.

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BY Sean Wise - 02 Oct 2018

7 Reasons Why Now Is the Perfect Time to Expand Your Business Into Canada

PHOTO CREDIT: Getty Images

With the U.S., Mexico, and Canada agreeing Sunday night to preserve a version of the North American Free Trade Agreement (renamed the United States-Mexico-Canada Agreement), cross-border business along the 49th Parallel should return to the almost frictionless state it was at before all the dustup over renegotiation started in 2017.

I am a proud Canadian, but I've also worked extensively in the U.S. and have a good handle on entrepreneurship on both sides of the border. Canada has just over 36 million people, most of whom speak English, are huge consumers of American goods, and even watch the same TV shows as their southern neighbors. Most consider the U.S. the country's greatest ally. So with the new deal coming together, here are seven reasons to expand your small business into the Great White North.

  1. Proximity. 90 percent of Canadians live within 100 miles of the U.S. border. That's a lot closer than both Hawaii and Alaska.
  2. Familiarity. Canada shares much culture with its southern neighbor. This makes it easier for local business owners to begin operations in the north. Further, the language is almost identical (although the accent may vary).
  3. Online Shoppers. When you have winter for as long as we do, you love to shop online. Recent estimates say that Canada has more than 20 million digital consumers, and more than 20 percent of Canadians shop online at least monthly. Best of all, American businesses can easily fulfill Canadian orders with minimal infrastructure. Both Shopify and Amazon support online sales in Canada, offering easy options for shipping and dealing with customs (which should be even easier with a new trade deal in place).
  4. Tax Treaty. Total business tax costs in Canada are the lowest in the G-7 and up to 46 percent lower than those in the United States, according to the Fraser Institute. Further, the U.S. and Canada have a long-standing tax treaty that makes cross-border commerce fairly straightforward. Businesses headquartered outside of Canada are required to pay income tax on the profits earned from Canadian operation, but if your business does not have a permanent establishment, then profits are not subject to Canadian income tax.
  5. Skilled Workforce. If you decide you need humans working north of the border, you are in for a treat. Both education and health care are highly subsidized in Canada, which produces both an extremely skilled workforce and knowledgeable consumers. Among the countries in the Organization for Economic Cooperation and Development (OECD), Canada ranks first in the proportion of adults with a college education (24 percent) and eighth in the proportion of adults with a university education (26 percent). (In Canada a university awards bachelor's degrees, e.g. B.Comm, while a college awards diplomas, e.g. Diploma in Business Administration).
  6. Multiculturalism. Canada is one of the world's greatest cultural mosaics, with diversity being a key strength. The population of Toronto, Canada's largest city, is more than 50 percent immigrants. This makes Canada a great place to launch international operations. Several founders I know use this advantage by hiring country representatives who have recently arrived in Canada from the countries they want to expand into. Newcomers can offer deep insights into the customer base of the countries they arrived from.
  7. Quality of Life. If you need to send staff to Canada, they may never want to come home. A 2018 U.S. News & World Report ranking placed Canada first in the quality of life category, ahead of Denmark, Sweden, and Australia. Overall, Canada was ranked second, behind only Switzerland, scoring 9.9 out of a possible 10.

These strategic reasons to expand your small business to Canada are only the tip of the Canadian iceberg. We also have Ryan Reynolds, Ryan Gosling, William Shatner, Shania Twain, and Celine Dion. What more could you ask for?

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