Country Business Brief: CANADA.
A.Brief Country Description
Canada is a land of vast distances and rich natural resources, Canada became a self-governing dominion in 1867 while retaining ties to the British crown. Economically and technologically the nation has developed in parallel with the US, its neighbor to the south across an unfortified border. Its paramount political problem continues to be the relationship of the province of Quebec, with its French-speaking residents and unique culture, to the remainder of the country.
1.Country location and size:
Canada consists of the entire North American continent north of the Unites States except Alaska and the small French islands of St. Pierre and Miquelon. Its total land area of 9.9 million square kilometers (3.8 million square miles) makes it the second-largest country in the world. Canada is bounded on the North by the Artic Ocean, on the east by Kennedy Channel, Nares Strait, Baffin Bay, Davis Strait and the Atlantic Ocean, on the south by the United States and on the west by the Pacific Ocean and the US state of Alaska.
The capital city of Canada is Ottawa, located at the southeastern part of the country. It has a population of 1.081 million and is one of Canada’s most bilingual communities, with nearly half a million people speaking both English and French.
3.Major port cities
Canada has two major port cities which are very distinct from one another, even though each is a commercially thriving metropolitan center. One of them is Montreal, established in the 17th century and the largest French city outside France, has a strong influence of French architecture and culture. It is a financial and manufacturing center and seaport, with the majority of Canada’s European exports and imports coming through its harbor. The second city port is Vancouver, nestled at the base of the Coast Mountains, is the financial, commercial, agricultural, and industrial center for western Canada. It’s harbor and mountains make it one of Canada’s most picturesque. Consequently, West Vancouver is the most densely populated urban area and has the highest income per person of any municipality.
4.Other major cities
Toronto is another major financial and commercial center, is filled with office towers not historic buildings. It has a great number of people living in and around the central business district. The downtown district does not “close up” when people leave work.
Rivers in Canada flow into five major ocean drainage basins: the Pacific, Arctic and Atlantic oceans, Hudson Bay and the Gulf of Mexico. The drainage basin areas are separated by a drainage divide or height of land. The river system with the largest drainage area is the Mackenzie River, with 1 805 200 square kilometers.
6.Major mountain range(s)
The principal mountainous region is the Western Cordillera, or Cordilleran, mountain system located in western Canada in British Columbia, Alberta, Yukon Territory, and Northwest Territories. A second major mountain system in Canada is located along the north-eastern seaboard from Ellesmere Island down through to the Torngat Mountains of Quebec and Newfoundland and Labrador. A third system of significance is the Appalachians which cross much of Eastern Canada.
Most of northern Canada has sub-arctic to arctic climates, with long cold winters lasting 8 to 11 months, where the average temperature ranges from -31oC in January to 16oC in July. In contrast, the populated south has a template climate with a variety of climatological landscapes.
Canada has two official languages, English and French. Though English is more widely spoken and is used much more in business circles (about 59.3%), and French only accounts for 23.2%, it is the prevalent language in some important cities like Quebec, where 80% of the population speaks it as a native language. There are also other languages spoken like German, Italian, Chinese, Ukrainian and around 58 different Indian languages and dialects that account for 17.5%. Cree is the most common Indian language.
B.Role of Major Religions
Since the enactment of the Bill of rights in 1960 Canada has protected the freedom of religion for its citizen. Based on 1998 estimates, 82.1% of the Canadian population belongs to Christian denominations. Roman Catholics constitute the largest group with 45.2%, while Protestant are on second place with 36.4%. Traditional religions remain strong in rural areas, with most people attending church regularly.
C.Major Social Traditions
Most Canadians are proud of their multi-cultural heritage which includes British, French and other European influences. Atlantic Canadians considered themselves as conservatives and traditional, hardworking, unpretentious people who care about nature and community involvement. Family is considered the center of the society; parents usually work outside the home. When visiting Canada it is always good to maintain a reserved demeanor, and follow good rules of etiquette. Traditions and gracious manners are part of the culture, even in more rural areas. When traveling to different cities or areas, it is a good idea to pay attention to local customs. By being observant, you will respect the pace and nuances of each area.
Business hours are pretty similar to those in the United States. Offices open from 8 or 9 a.m. to 5 or 6 p.m. Stores and shopping centers usually open at 9 or 9:30 a.m. until 6 p.m. or 9 p.m. in some regions. Most retail shopping occurs on supermarkets and suburban shopping malls; retailing in some downtown areas remains vital.
E.National Cuisine and Dinning Customs
Canadians have the standard three meals per day in their eating customs, which are often complemented by an afternoon tea and coffee break or snack at work. Canadians usually have their breakfast as soon as they wake up. In some rural families midday is the most important family meal, but for most families supper constitutes the most important meal during the day and the usually eat it together. For this reason, it is consider impolite to make a phone call during dinner time. It is also consider impolite to leave food on the plate, while asking for second helpings is a compliment to the host. Not placing elbows on the table and saying thank you and please is important when eating in a Canadian house. Especially in Quebec, it is consider rude to eat while walking in public, you should plan your time so you can stop in a café or restaurant to enjoy your snack. Tipping rate is between 10 and 15 percent.
F.Business Customs and Values
1.Meeting and greeting Protocol
Use a firm handshake with good eye contact when meeting and leaving. Both French and English areas use and expect a firm handshake. Men will wait for a woman to extend her hand for a handshake. French Canadians will shake hands more frequently, even with a subsequent encounter the same day. Others may just nod or smile at a subsequent encounter on the same day. Use a person’s title if he or she has one. Otherwise, use Mr., Mrs., Miss and the surname. English is spoken in most of Canada. French is spoken in Quebec, and some area of Nova Scotia and New Brunswick, in these areas all the material for business meeting must be presented in English and French.
Canadians are usually independent thinkers, who are not afraid to go against the group consensus. Canadians will argue their personal viewpoints enthusiastically, though rarely aggressively when negotiating.
Gifts are not routinely given. If you do give a gift when you arrive or when you are leaving, make it a modest one. A lavish gift, though accepted, would be frowned upon. Gifts are given to celebrate finalizing a negotiation, a contract, or a project. Gifts for the office, a nice bottle of wine or liquor would be appropriate. Taking a business associate to a nice meal or an evening sporting event, play, or symphony is always a nice gesture.
4.Nature of business relationship
Canadians tend to be quite formal and reserved in the workplace. The business culture can be hierarchical, though meetings are usually very democratic and all participants are encouraged to voice their opinions.
5.Sense of time and space
Be punctual for meetings and appointments, as promptness is valued. In French areas, time is more relaxed. However, you will be expected to arrive at the appointed time, even if the French attending the meeting don’t. Personal space and body movement or gestures differ between the English and the French provinces and cities. In English areas, body movement is minimal, there is rarely touching other than handshakes, and personal space – how close someone stands – is about two feet. In French areas, people stand closer together, people will frequently touch, and gestures are more expressive.
Canada Hofstede’s ratings for Canada are the following:
Power Distance 39
Long Term Orientation23
Canadians individualism is ranked among the highest. Their success is measure mainly by personal achievement. Canadians tend to be self-confident and open to discussions on general topics; however, they hold their personal privacy off limits to all but the closest friends. It should be noted there is tension between the French province of Quebec and other Canadian provinces. Citizens of Quebec tend to be more private and reserved. Ethnocentrism is high throughout Canada, but particularly in Quebec.
Canada’s major holidays are New Years Day (January 1st), Good Friday, Easter Monday, Victoria Day( May 24th), Canada Day(July 1st), Labor Day(first Monday of September), Thanksgiving Day(second Monday of October), Remembrance Day (November 11th), Christmas(December 25th), and Boxing Day(December 26th).
Victoria Day commemorate the birthday of the Queen Victoria and it was declared a national holiday by the Legislature of the Province of Canada in 1845. Canada Day is the celebration of the anniversary of the formation of the union of the British North America provinces in a federation under the name of Canada.
Canadians have the obligation to send their children to school when they reach the age of 6 or 7, depending their province or territory of residence, until they reach the minimum age for leaving school, which is 15 or 16.
Almost half of the population aged years and over has graduated from secondary school. Most children remain in school well beyond the compulsory age, with more than one half of all high school graduates entering to postsecondary institutions, such as universities, colleges or specialized institutes.
Education in Canada is totally accessible because it is primarily financed by the various levels of government. Primary and secondary education is provided free for all children, and as it is remarked above it is compulsory for children between 6 and 15 years olds. There are tuition charges for courses at the postsecondary level.
H.Aesthetics, Values and Institutions
The vitality of Canadian visual arts today is the result of the combined efforts of the artists themselves, the theoreticians, critics, exhibition curators, artist-run centers, alternative or commercial galleries, museums, the Canada Council for the Arts and the provincial and regional art councils. The importance of the visual arts in Canadian society is undeniable. The enormous potential offered by these forms of expression ensures their continuing role as reflections of society, provocative food for thought and catalysts of social and cultural change.
Canadian dancers and choreographers have made a mark not only on their home stages but also those in Europe, Asia and the United States. They are cultural ambassadors for Canadian culture; for audiences who have witnessed Canadian dance artists in performance, Canada has become known as a home to artistry, innovation and excellence. There are three major ballet companies in Canada and more than 100 professional ballet, contemporary and experimental dance companies.
The music scene in Canada has reflected the influences of all the people who have come to this country. Settlers brought their songs and music from home just as new immigrants do today. The growth of Canadian achievements in music has been most dramatic since the Second World War, driven by such events as the establishment of the Conservatoire de musique du Québec and the creation of courses at the University of Toronto for professional performers and school music educators. Today there are more than 100 community orchestras in Canada and vibrant opera companies in Toronto, Montreal, Vancouver, Edmonton, Calgary and Winnipeg. In addition there are summer music festivals all across the country which are home to vibrant contemporary music.
More than 50 years ago, professional theatre started to really flourish in Canada with the founding of the Stratford Festival and the Théâtre du Nouveau Monde (TNM) and the formation of the Canada Council for the Arts. Stratford still regularly draws half a million tourists to its summer Shakespeare festival. The TNM has set professional standards in acting, staging and set and costume design and remains the most stable and influential theatrical company in Québec. Toronto, meanwhile, has become the third largest centre for English language theatre in the world, after New York and London.
I.Major sports & National Interest
Canadians favorite sports are golf, jockey, baseball and swimming. Sport touches most Canadians in various ways. From sandlot baseball to professional hockey, sport in Canada has become a cultural trademark. Few can deny the significance of sport in terms of participation, volunteer activity, entertainment and leisure, pride, health, community well-being and youth development. Over 78% of Canadians participate in sport as coaches, players or spectators, and 9.6 million Canadians regularly play some kind of organized sport (Statistics Canada, 1994). Sport and recreation account for the second highest proportion (18%) of all volunteers in Canada (Statistics Canada, 1998(a)). Canada is indeed a sporting nation and sport contributes in meaningful ways to defining us as Canadians. Canadian families spend around 1.46% of total family expenditures on sporting goods and services.
A.Economic Statistics and Activity
1.2002 GNP or GDP:
a.Total in US$ and CA$:
The Gross Domestic Product in the year 2002 was US$ 715.7 billions and CA$934.1 billions.
b. Rate of Growth
The rate growth of the GPP was 3.3% in 2002.
2. 2002 Per Capita Income
The Canadian per capita income in 2002 was approximately US$ 22,300 or CA$ 34,800.
3. 2002 Income Distribution
The Canadian GINI Index for 2002 was 31.5, this index explain the distribution of the income among the population. When it closer to 45 it describes a perfect equality in the distribution of the National income the population of the country, while when it gets lower and farter to 45 it means that the wealth of the country is not equally distributed. As it can be concluded Canadian Income Distribution is pretty equal that is why the average standard of living of Canadians is high.
4. 2002 Inflation Rate
Canada’s inflation rate in the year 2002 was 1.1%. This is a very low inflation rate that helps to explain the stable economy and high standard of living held in Canada.
1.Total: 31.4 millions
City Population (In 000′s)
Canada population is well distributed among the nation. There are some cities like Toronto, Montreal, Vancouver and Ottawa which are the most populated cities in Canada. Although, none of these cities is overcrowded and as it can be inferred from the table most of the population lives in smaller cities.
More than 80% of the population is Canadian-born. Person whole or partial British origin make 28% of the population; those of partial French origin account for about 23%; Other European groups (Germans, Italians, Dutch, Portuguese) accounts for 15% of the populace. About 26% of the population is from mixed backgrounds. Others, mostly Asian, African, Arab, make up 6%; and finally Amerindians or Indians constituted about 2%.
i.Size, in 2003 the labor force is approximately 17 million workers.
ii.Level of skill/education, Canada has a highly educated work forced.
iii.Unemployment Rate, in 2003 the unemployment rate was 7.6% and the participation rate was 67.5. Canada’s unemployment rate has remained high, and it is usually higher in the Atlantic provinces of New Newfoundland, Nova Scotia and Prince Edward Island.
C.Natural Resources Endowment
Canada is a country endowed with vast land, what enables it to produce many agricultural products such as wheat, barley, oats, and corn among others. Canada also has a river system containing more than half of the world’s fresh water, that it is why it is ranked 20th among the world major fishing producers. Additionally, 42% of Canada’ land is forestland which has made Canada the third largest producer of coniferous wood products. Finally, Canada is endowed with fossil fuels and hydroelectric resources making it the fifth leading energy producer.
Canada is the largest exporter of minerals and metals. Canada has the world richest reserves of potash, it is the leading supplier of uranium, the second largest producer of asbestos (possibly the largest deposits) and sulfur, the third largest in titanium, platinum group metals and mine zinc, fourth in aluminum, fifth in copper, lead, silver and gold.
D.Major Industries/ Products
With the gradual urbanization of Canada, the relative role of agricultural in the country’s economy has declined, but Canada remains one of the major food exporting countries of the world. The Canadian agricultural Industry employs about 416.6 thousands of workers and generates approximately $23 billion in farm cash receipts. Agriculture is 2.6% of the GDP.
The leading manufacturing industries are pulp and paper, automotive, petroleum refining, meat processing, iron and steel, sawmills and planning mills, automotive parts and accessories, dairy products, and miscellaneous machinery and equipment manufacture. Canada has notable technological strengths in telecommunications, large-scale engineering. Manufacturing is 30.6% of the GDP
The service sector in Canada is growing and in 2002 it accounted for 66.8% of the total GDP and a similar proportion of the work force. Business such as travel services, insurance services, computer and information, transportation, advertisement and managerial consultancy are extensively available and usually owned by private entities.
E.Infrastructure: Public vs. Private Ownership
The size and geography of the country make it uncommonly dependent on transportation of various types.
The main modes of transportation are by rail, water, road and air as well as pipeline transportation. The rail transportation in Canada is dominated by two transcontinental systems, the publicly owned Canadian National System and the privately owned Pacific Railway. Shipping in Canadians waterways is open to all foreign-flag shipping.
Canadian major ports are Montreal and Vancouver
By air the two major National carriers are Air Canada and the Canadian Airlines International, both privately owned.
Two major telecommunications carriers operate nationally: Stentor and Unitel. Stentor is a consortium comprising seven privately owned telephone companies and two provincially owned companies. Unitel was formed in 1990 by s merger of Canadian Pacific Limited and Rogers Communications Inc. In addition, there are about 50 independent telephone companies and hundreds of cable companies. There is sophisticated infrastructure for high speed, high quality digital data transmission. Canada is also a world leader in videotext and fiber-optics technology.
Canada’s chartered banks and their subsidiaries are the core of Canada’s financial system. They are the most important players in virtually every financial service market in Canada, with the exceptions of insurance and car leasing, where they face legislative restrictions. They have always been at the centre of deposit-taking and commercial lending activities. Canada’s banks are well-capitalized and efficient by international standards. Domestically, the banks operate in markets which are characterized by intense competition, despite the presence of a relatively small number of major players. The trend towards emphasizing non-traditional product lines is expected to continue. Until recently, the major banks have evolved along broadly parallel lines. However, the enhanced business powers conferred by the 1992 reforms, recent corporate acquisitions and changing technology have permitted and encouraged them to take somewhat different paths.
4. Channel of Distribution
Canadian Channels of distribution has changed radically with the advent of the Internet. The intermediaries have been reduced in a large quantity but there is still a big portion of the economy that use the normal chain of distribution.
5. Available energy
Canada is endowed with fossil fuels and hydroelectric resources making it the fifth leading energy producer.
1.2002 Balance of Payment
Current Account measures Canada’s revenues and expenditures arising from transactions in goods and services, income investment and current transfers. Canada’s current account in 2002 summed up a total of CA$ 25,783 or US$14,909 millions
Capital Account includes Canada’s capital transfers and transactions in non-produced and non-financial assets. Canada’s capital account in 2002 was CA$-4,826 US $-3,588 millions
2.2002 Imports and Exports
a.Major import categories
Canada major import category is Machinery and Equipment which accounts for 28.76% of the total imports. Followed by Industrial good and material, which constituted 19.07% of Canadian imports.
Imports 2002 (millions)341,381.3
Agricultural and fishing products21,520.3
Fruits and vegetables5,924.5
Other agricultural and fishing products15,595.9
Other energy products6,188.7
Industrial goods and materials65,117.5
Metals and metal ores14,931.7
Chemicals and plastics25,022.8
Other industrial goods and materials25,163.0
Machinery and equipment98,194.3
Industrial and agricultural machinery26,711.7
Aircraft and other transportation equipment11,993.8
Office machines and equipment14,502.4
Other machinery and equipment44,986.4
Passenger autos and chassis24,489.5
Trucks and other motor vehicles13,054.9
Motor vehicle parts38,811.5
Other consumer goods46,198.0
Apparel and footwear8,399.3
Miscellaneous consumer goods37,798.7
Special transactions trade5,246.8
b.Major export categories
Canada major exports are machinery and equipments, automotive industry, industrial goods and materials and energy products.
Exports 2002 (in millions)401,187.9
Agricultural and fishing products29,320.6
Other agricultural and fishing products26,492.0
Other energy products13,994.0
Lumber and sawmill products16,473.3
Wood pulp and other wood products6,316.5
Newsprint and other paper and paperboard products11,712.9
Industrial goods and materials66,587.7
Metals and metal ores5,776.1
Chemicals, plastics and fertilizers23,301.6
Metals and alloys20,291.1
Other industrial goods and materials17,218.9
Machinery and equipment89,238.3
Industrial and agricultural machinery18,869.4
Aircraft and other transportation equipment21,151.7
Other machinery and equipment49,217.2
Passenger autos and chassis43,557.2
Trucks and other motor vehicles16,182.0
Motor vehicle parts28,202.2
Other consumer goods17,124.6
Special transactions trade7,261.6
Canada’s General Preferences Tariffs applies to over 180 developing countries and customs territories, including economies in transition. The GPT covers most products (81.5 percent of all items in the Customs Tariff are covered), but excludes products in areas such as supply-managed agricultural products, refined sugar, and most textiles, apparel and footwear. Three quarters of covered products enter Canada duty-free; the remainder has tariff rates that are generally less than the Most-Favored-Nation (MFN) Tariff rates.
Canada has eliminated quotas on almost all imports from least developed countries. But to improve market access it must proceed hand in hand with the elimination of trade-distorting subsidies. The direct costs of agricultural subsidies, in particular, dwarf developed country aid transfers to the developing world. But even more seriously, they distort agricultural markets in both developing and developed countries. Beyond agriculture, we need to improve disciplines on the use of subsidies and trade remedy measures to ensure that market access is not undermined. And these issues should not be seen only in “North-South” terms. Developing countries themselves frequently maintain high barriers to the regional and “South-South” trade that should be an important catalyst for future growth.
4.Economic Bloc Membership
In 1986 Canada concluded the Caribbean Agreement with the Commonwealth countries and territories of the Caribbean, thereby permitting tariff-free entry for all products from those lands with the exception of several product lines such as clothing, textiles, footwear and leather goods. Canada also is a party to the Generalized System of Preferences which normally gives one-third off the Most Favored Nation rate or tariff-free access to products from virtually all developing nations in the world. For those developing countries considered as newly industrialized countries, Canada has, however, withdrawn the Generalized Preferential Tariff on a wide range of products. Canada is also part of the North America Free Trade Area, which went into effect in 1994. NAFTA includes the two way relationship between the Unites States, Mexico and Canada. Canada has free trade agreements with Chile, Costa Rica and Israel.
5.Member of World Trade Organization
Canada has been a World Trade Organization member since January 1st, 1995.
Canadian currency is the Canadian Dollar and it has the following characteristics:
a.Convertibility: It is a hard currency because it is fully convertible.
b.Strength or Stability: Canadian dollar is also very stable, because its value does not fluctuate widely compare to other currencies. In the last five years it has fluctuated between CA$ 0.6582 to CA$0.7716 per US$.
Canada, the second largest country in the world, is a rich country endowed with a wide variety of renewable and non-renewable resources, multi-cultural population and a strong and stable economy. It maintains international trade in the basis of an open market economy and its major trading partners are the Unites States, China and Japan. Is part of the North American Free Trade Area which enable it to increases its exports to the United States.