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Access Canada: A Guide on Exporting to Canada

Are you interested in exporting to Canada?

Exporting to a new market can be daunting even for experienced companies. This step-by-step guide will walk you through all aspects of how to export to Canada. It provides links to rich information on the Canadian market, trade data, sector reports, and much more to help you create your Market Entry Plan.

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Alcoholic Beverages

With 3 billion litres in volume sales and $CAD 21 billion in value sales, the Canadian alcoholic beverages market is an enticing proposition for Small and Medium Exporters (SME’s) from developing countries. The market profile is changing, with wine and spirits categories offering attractive opportunities. However, developing a solid business case, encompassing all the components of the “Route-to-Market”, will be critical to implementing a successful market-entry into Canada. This will require understanding the role of the Liquor Boards, Agents and Suppliers, integrating Corporate Social Responsibility into export plans, and full compliance with import regulations.

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Apparel and Textiles

According to Statistics Canada, retail clothing sales rose to their highest level in five years, reaching $26.9 billion in 2012. Sales of women’s clothing and accessories have risen slowly over the past four years, reaching $15.1 billion in that same year. More dramatic has been the rise in sales of men’s clothing and accessories, which reached a five year high of $8.6 billion following a low of $7.1 billion four years previously. Sales of children’s clothing also reached a five year high, amounting to $3.2 billion in 2012. In that year, large retailers sold $8.2 billion worth of women’s clothing and accessories; $4.3 billion worth of men’s clothing and accessories; and $2.2 billion worth of children’s and infants’ clothing. As well, large retailers sold $162 million worth of unisex clothing which can be used by both males and females

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Beverages

According to the Canadian Beverage Association, the Canadian non-alcoholic refreshment beverage industry currently generates over $5 billion annually in retail sales. The industry has more than 120 manufacturing, distribution and sales facilities in every region across Canada and directly employs some 12,000 Canadians with an annual payroll of $500 million. The beverage market in Canada is dynamic and intensely competitive. Increasingly sophisticated tastes of consumers affect the wine, coffee and tea markets, while healthy, active lifestyles contribute to an ever-changing range of products and packaging in the juice, alternative beverage, and bottled water markets. To maintain and increase market share, major non-alcoholic beverage manufacturers rationalize diverse operations and offer a comprehensive line of products ranging from soft drinks to fruit juices, bottled water, and alternative drinks, including those containing vitamins, minerals, or a low level of alcohol.

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Building Materials

While residential construction is facing a depressed market into 2015, opportunities exist for suppliers of building materials for commercial construction and home renovations for seniors who want to remain longer in their homes. Opportunities also exist for materials that are environmentally friendly and innovative for all types of construction. After a sharp decline in 2011 to $930 million, the value of Canadian lumber imports reached just over $1 billion in 2013, approaching the five year high last reached in 2010. Imports of value-added products such as kitchen cabinets, wooden windows, doors, pre-fabricated wooden buildings, fencing, etc. reached a five year high in 2013 at $1.3 billion. Sourced mainly from the United States ($701 million), China ($318 million) and Austria ($52 million), several TFO Canada client countries were successful in claiming a position among the top ten suppliers in this category. Canadian imports of ‘other’ building products such as clay and stone tiles for flooring and walls, and cement blocks rose consistently over the past five years to reach $3.3 billion in 2013.

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Canadian Market Access Guide for LDCs

This Guide explains how to export goods to Canada on a duty-free and quota-free basis under the Market Access Initiative. It offers useful information on customs requirements, with a focus on the Rules of Origin. There are 48 eligible Least Developed Countries (LDCs) that can benefit from these favourable trade arrangements with Canada.

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Carpets and Rugs

The total Canadian market for carpets and rugs is estimated at over $4.5 billion in 2014. As residential construction and housing markets recover from the recession, floor covering stores have returned to positive growth projected at 2.4% over the next five years (2014-2019). Carpets and rugs represent half of business sales for the over 1,777 floor covering stores located across Canada. In addition to specialty stores, mass merchandisers and home improvement stores have aggressively entered this market, offering unprecedented product selection to Canadian consumers. While price competition has increased for computer-made carpets and rugs, opportunities also exist for high-end handmade carpets, with style preferences ranging from traditional to modern depending on the consumer. Canadian imports of carpets and rugs reached a five year high in 2013 at a total of $873 million. The United States represents a large portion of these imports, however many developing countries have reached top ten supplier status, including Egypt, Turkey and Nepal. Exporters must meet Canada’s strict regulations for flammability and may be eligible for certification by the Carpet and Rug Institute’s Green Label Plus programme.

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Corporate Social Responsibility Guide

In Canada, and around the world, companies, governments and consumers are increasingly interested in buying products and services that are produced in socially and environmentally responsible ways.  Small and medium sized companies exporting to Canada need to be aware of how purchasers and regulators of the products they sell are defining and evaluating social and environmental performance, so that they can meet expectations, and ensure continued access to markets.  This guidance document contains two types of information. This first is information on how CSR is defined and measured, why it is important for SMEs, and how the Canadian market is evaluating CSR performance of companies (Sections 2 to 6). The second type of information is specific step by step guide on how your business can improve its understanding, documentation, and communication of its CSR performance (Section 7).  Links are included throughout the guide to provide you with additional information, and in the Annex’s a glossary, resources and examples of supplier codes of conduct have been provided.

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Cosmetics, Spa and Beauty Products

Cosmetics, spa, and beauty products comprise a significant portion of the Canadian retail market. Statistics Canada reports that out of total household consumption spending of $56,279, Canadian households spent about $2,285 on health care products and $1,194 on personal care products in 2012. Industry experts estimate that the Canadian cosmetics, spa and beauty retail market is valued at $5.3 billion annually, a number that is expected to rise by 5-6% each year. Imports satisfy about 93.2% of Canadian domestic demand for cosmetics and beauty products, up from 89% in 2009. Reaching a five year high of $2.9 billion in 2013, imports of the products covered in this report were led by Beauty or Make-Up Preparations ($1.3 billion).

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Dried Food, Nuts and Spices

With the exception of rice, which is climbing back to 2009 import levels after dropping in the intervening years ($339 million in 2013; $342 million in 2009), imports of all products covered in this report rose to five year highs in 2013. Imports of dried fruits reached a five year high in 2013, at $1.5 billion, up from $1.3 billion in 2009. Imports of citrus fruits led these purchases at $495.9 million. Imports of dried vegetables, manioc, sweet potatoes, arrowroot, and salep also rose to $293 million in 2013, the highest level in five years. At $601 million, imports of edible nuts also reached five year highs in 2013. Imports of dried legumes, including dried peas, chickpeas, beans, and lentils, peaked after five years, at $120.6 million in 2013. Imports of spices, herbs, and spice extractives rose significantly (by 17.7%) between 2012 and 2013 to reach a five year high in 2013 of $168 million. TFO Canada client countries were significant suppliers in all cases in 2013.

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Environmental Management Systems

In Canada, and around the world, companies, governments and consumers are increasingly interested in buying products and services from companies who are responsibly managing, and reducing, their negative environmental impacts. Expectations are growing for companies to show real progress on key issues such as, climate change, and to be more transparent about their business and their supply chains.  For small and medium sized companies this will mean more demand for information on how they are managing and improving their environmental performance.  TFO Canada offers this guide as one of many resources to help small and medium enterprises prepare for the changing expectations of current and future markets

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Fishery and Seafood Products

According to Agriculture and AgriFood Canada, the market for fish and seafood in Canada increased from US $2.8 billion (684,200 tonnes) in 2009 to US$3.8 billion (709,100 tonnes) in 2013. Consumption is expected to continue to rise as Canadians look to fish and seafood as a regular part of a healthy diet. Prices are also expected to rise significantly (almost 42%) by 2016 from 2009 levels. After a slight dip in 2010, imports of the fishery and seafood products covered in this report rose from $2.2 billion in 2009 to $2.7 billion in 2013. Fisheries and Oceans Canada estimates that imports of shellfish led the way at $1.2 billion, followed by Pelagic fish such as salmon and tuna at $777 million; ‘other’ fish not elsewhere specified ($492 million); Groundfish such as cod and halibut ($316 million); Freshwater Fish such as trout ($160 million); and other miscellaneous products ($47 million).

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Floriculture

The total market for greenhouse flowers and plants in Canada grew by 2.6% to $1.4 billion in 2013, with indoor and outdoor potted plants accounting for over half of total sales.  It is now estimated that more than 9,000 retail outlets sell floriculture products across Canada, as local florists face mounting competition from supermarkets, big box stores and mass merchandisers as well as online retailers. Canadian domestic growers face increasing price competition from foreign imports, particularly from Colombia, which has benefited from the 2011 signing of the Canadian-Colombian Free Trade Agreement. Floriculture imports reached a five year high in 2013, at $370 million, led by mushroom spawn and other live plants including roots and cuttings ($136.5 million), cut roses and buds for bouquets or other ornamental purposes ($64.5 million), and cut flowers and buds for bouquets or other decorating purposes ($41.7 million). Imports rose from $344 million in 2012, and are on track for another annual rise in 2014 as buyers in Canada sourced 7% more from overseas suppliers in the first nine months of 2014 than in the same period the year before.

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Footwear

The future looks promising for the footwear market in Canada. Despite a recent downturn in the economy and the falling Canadian dollar, footwear was one of the top performing categories of apparel during the 2014-2015 season. The total market for footwear reached a five year high of $6.6 billion in retail sales in 2014. An estimated 90% of demand is met through imports, mostly from China. Many of TFO Canada’s client countries are also major sources, including Vietnam, Indonesia, Cambodia, India, Mexico, Thailand, Brazil, Bangladesh and Dominican Republic. Sales of footwear closely follow the fashion calendar and weather seasons. Warm winter boots are a necessity during Canada’s famously cold winters, while summer brings on strong sales of athletic shoes and sandals. One of the biggest trends is a push towards comfortable and casual styles that offer orthopedic benefits without sacrificing style. Women are the largest consumer group, with over half of all footwear purchases made by women aged 35 and above. Following the wider growth trends in men’s fashion, the men’s segment is attracting increasing attention and expected be the center of growth in footwear in the coming years. While there are few specific regulatory requirements, many footwear items are subject to high tariff rates. This creates opportunities and cost advantages for exporters from countries with bilateral free trade agreements or least developed countries that are eligible for duty-free access to Canada.

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Fresh Fruits and Vegetables

Canadians spend an estimated $11.2 billion on fresh fruits and vegetables per year, purchasing these items at least once per week and consuming an average of three to five servings per day. Customer expectations for quality fresh produce year-round has driven a high level of globalization in the food industry. In 2013, Canada’s imports of fruits remained stable at $3.7 billion, while imports of vegetables reached a five-year high of $2.2 billion. While the U.S. and Mexico remain Canada’s principal food suppliers, the popularity of nutrient-rich “superfoods” and mainstream adoption of ethnic grocers offer promising opportunities for exporters from around the world. The largest increases in Canadian fruit consumption in 2013 were seen in exotic fruits, including limes, avocados, dates, guavas and mangoes. Green vegetables such as Kohlrabi, Brussel sprouts, rapini and leeks also experienced strong growth, in addition to sweet potatoes, okra and manioc. The new Safe Food for Canadians Act will bring important changes to rules for importing food to Canada, particularly in labelling and inspection, and is expected to come into force by mid-2015.

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Furniture

Following post-2008 recovery in housing construction and disposable income, the furniture market in Canada is estimated at $10.1 billion in 2014 with a projected annual growth of 2.1% over the next five years (2014-2018). Imports supply over half of the domestic market, amounting to $5.7 billion in 2013. An influx of foreign imports (especially from China) has intensified price competition amongst over 3,500 furniture stores located across the country. The market is consumer-oriented, with household sales for bedroom, living room and dining room furniture accounting for nearly 70% of 2014 sales, in addition to office furniture (27%) and outdoor furniture (4%). Canadians value durability and long-lasting pieces, with smaller niche markets for high-end furniture, particularly in the design centres of Toronto and Montreal. Industry innovation is being driven by Canada’s condo boom, with new lines of compact and multipurpose furniture, as well as millennial consumer demand for eco-friendly materials. Exporters must comply with Canada’s strict regulations on flammability and may be required to produce a phytosanitary certificate to demonstrate proper fumigation for certain wood products.

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Guide for Newly-Arrived Trade Representatives to the Province of Qubec

This Practical Guide provides a newly-arrived Trade Representative to the province of Québec a practical overview of the province as a market for his/her country’s exporters. It also gives some background on the economy as well as general market characteristics and  a variety of tools that can be used to better understand the market.

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Hardware and Hand Tools

Canadian imports of hardware dropped from $1.6 billion in 2008 to $1.4 billion in 2009, while imports of hand tools dropped even more dramatically, from $2.6 billion to $2 billion over the same period. However, there are signs that both markets are improving, with imports of hardware rising by 6.3% and those of hand tools by 2.4% in the first five months of 2010 compared to the same period a year ago. Since consumers are more conscious about security and energy conservation, sales of related devices for the home such as lights, locks, timers, alarms and lighting remain high. Energy audits, soon to be a requirement for home sales, will boost demand for these products.

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Hides, Leather Goods and Leather Apparels

Leather has re-emerged as a top fashion trend in recent years both on Canadian runways and retail shelves. Renowned for its softness, durability and luxury image, leather-made apparel and accessories have moved beyond the classic items of jackets, belts and gloves to include everything from pants, to dress shirts, to mixed fabric designs with leather accents. Canada’s domestic leather manufacturers reported their highest sales in five years in 2013 reaching a total of $430.7 million. In addition, Canada imported $98.3 million in leather hides this same year. Canadian imports of finished leather goods and apparel increased significantly from 2009 to 2013 to reach $303 million and $267 million respectively. Top products included leather handbags ($163 million), clothing ($90 million), gloves ($111 million), and sporting goods ($71 million). Italy remains a top leather supplier for luxury retailers, while China has emerged as a low-cost alternative. Strong opportunities exist for exporters from other countries, with recent gains by Vietnam, Indonesia and Colombia seen in this market.

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Home Dcor Handicrafts, Housewares and Giftware

According to the Canadian Gift and Tableware Association (CGTA), the Canadian home décor retail market was estimated at $10 billion in 2012. There are about 63,000 stores in Canada that sell or have the potential to sell giftware; about 45,500 of these are independent retailers and 17,500 are chain stores. In 2012, imports of kitchen electrics reached a four year high of $208 million, rising by 36.8% in the first six months of 2013 (to $119 million) when compared to the same period the previous year ($87 million). Imports of tableware reached a five year high at $1.2 billion in 2012. For cookware, China ($231 million), the United States ($35 million) and India ($12 million) were the top suppliers to this market in 2012. Canadian interest in imported handicrafts also reached a five year high in 2012, when $2 billion worth of products were imported. The three major import categories were lamps, signs and lighting fitting; festive articles; and sculptures.

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Jewellery and Fashion Accessories

The total market for jewellery and fashion accessories in Canada reached $4.8 billion in 2014, with an average growth of 4% annually over the past five years. Industry consolidation and volatile world prices for gold and silver have squeezed the profit margins of fine jewellers. Costume or imitation jewellery continues to gain market share as consumers follow fast fashion trends and seek out lower-price alternatives during hard economic times. Many Canadians, especially millennials, will splurge on occasional luxury items such as precious jewellery or designer watches and handbags, while making more frequent purchases of low to mid-price accessories to keep up with changing fashion trends. Most of Canada’s demand for jewellery and fashion accessories is met by imports, which reached a five year high of $2.4 billion in 2014. Fine jewellery accounts for half of imports ($1.2 billion), followed by fashion accessories ($1 billion) and costume jewellery ($264 million). The United States and Europe remain major sources, while lower-cost items are dominated by low-cost countries especially China and India. Exporters must be aware of Canada’s strict regulations for lead and cadmium content in children’s jewellery as well as detailed rules for marketing and labeling of precious metals and textile fibres.

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Manufactured Foods

This report covers baked goods; confectionery; specialty products such as frozen and canned foods; other manufactured foods such as snack foods; and poultry and meat products. In 2011, food sales by large retailers in Canada amounted to about $41 billion. In that year, Canada imported nearly $10 billion worth of manufactured foods, led by specialty foods, meat products, and confectionery and sugar products. In 2011, imports of sugar and confectionery products rose to their highest level in five years to $2.4 billion. Also reaching five year highs were imports of snack foods ($458 million), and baked goods ($1.26 billion). Specialty foods imports amounted to nearly $3 billion while imports of meat products were $2.8 billion, just over $400 million higher than the previous year.

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Natural Health Products

To be legally sold in Canada, all natural health products must have a product licence, and the Canadian sites that manufacture, package, label and import these products must have site licences. To get product and site licences, specific labelling and packaging requirements must be met, good manufacturing practices must be followed, and proper safety and efficacy evidence must be provided. According to Consumer Health Products Canada, the natural health products (NHP) market in Canada is currently valued at $4.7 billion, a significant increase from $2.5 billion in 2005. As well, a 2010 Ipsos-Reid survey shows that 73% of Canadians regularly take NHPs such as vitamins and minerals, herbal products, and homeopathic medicines.

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Organic and Ethnic and Fair Trade Foods

In 2012, this market was valued at nearly $3 billion out of a total organic market of $3.7 billion. The most popular organic groceries among Canadian consumers were soya drinks with 2012 sales of $58 million, a 48% growth over the previous year. Organic milk and coffee were the next most popular items with 2012 sales of $58 million and $47 million respectively. Interest in Ethnic foods continues to be evident, and with a vibrant and growing multi-ethnic population, this augurs well for suppliers who are encouraged to look at two sides of this lucrative coin. As well as selling ethnic foods to Canada’s ethnic communities, suppliers could look at how to market to ethnic consumers those foods that have historically been available in Canada. Another development on the Canadian food market is the increasing popularity of Fair Trade Foods, with most Canadians concerned about worker exploitation, unfair trade practices, and poverty in developing countries. Between 2008 and 2011, it is estimated that the number of Fairtrade customers in Canada increased from 14% to 17%.

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Pharmaceuticals

The Public Health Agency of Canada estimates that 67% of direct health care expenses are spent on chronic conditions such as diabetes, asthma, and congestive heart failure; these conditions are becoming increasingly prevalent as the population ages. In 2006, the total prescription pharmaceutical market in Canada was $17.8 billion, up 7.9% from 2005. Generic drugs fill 45% of all prescriptions in Canada, yet in 2006 the brand name industry experienced its strongest performance in three years and growth is expected to continue at an annual rate of 7.5% to reach $24.4 billion in 2010. This report provides information on industry trends and other factors shaping demand, sales opportunities, trade practices, stringent import regulations and additional sources of information for exporters. 

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Processed Fruits and Vegetables

Imports of provisionally preserved fruits and vegetables that require further processing for conversion into consumable products declined significantly from a five year high of $27.7 million in 2009 to $13.5 million in 2013. Among TFO Canada client countries, Thailand ($603,000), India ($385,000), China ($366,000) and the Philippines ($357,000) were within the top ten suppliers. In contrast, imports of canned and preserved fruits and vegetables that are suitable for immediate consumption rose to a five year high of $1.4 billion in 2013. After a significant decline in 2010, imports of frozen fruits and vegetables rose over the next four years to a four year high of $1.09 billion. Imports are on track for another rise in 2014, as January 2014 import levels increased by 6.5% over the same period in 2013.

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Services

Over the past decade, services – including manufacturing and agriculture, have been the fastest growing sector of the economy. Services such as telecommunications, financial and transport services provide the infrastructure and specialized inputs for all economic activities, as well as the health, education and cultural supports for quality of life. This report describes the dynamic service environment in Canada which includes a wide and complex variety of transactions that are generally intangible in nature. In Canada, the service sector is an important contributor to the economy. According to Industry Canada, in 2005, services accounted for 68% of GDP, and employed 75% of Canada’s work force.


 
 
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