Five reasons to expand into Canada

  1. Large and Growing Economy. Canada has the 10th largest GDP in the world. Annual growth rates should gradually rise over the remaining years of this decade, reaching 2% in the medium term
  2. The New “Health Mania”. The demand for health and wellness-related products is increasing. 31% of consumers are willing to pay a premium for these products
  3. “Green Factor” Advantage. Social and environmental consciousness among consumers has reached a tipping point. 60% consider themselves ethical consumers and 30% are willing to pay a 15% premium on ethically made products
  4. Foreign-Trade Friendly Market. Canada has signed a number of Free Trade Agreements with countries in Europe, Latin America, Asia-Pacific and Middle East. Some examples are NAFTA, CUSFTA, CETA and TPP
  5. Baby Boomers. More and more citizens enter their retirement years every day and they have the most disposable incomes of any other generation

Source: Euromonitor, BDC and Statistics Canada

Comparing Canadian and U.S. consumers

Despite similar cultures and language, Canadian and U.S. consumers are fundamentally different. Some of these key differences are:

  1. Canada’s population is more diverse (and significantly smaller). 21% of the population is foreign-born compared to only 13% in the U.S.
  2. Even though the two countries have pretty much the same surface area, Canada’s population density (people per square km. of land) is 3.9 compared to 35 in the U.S. This has important implications on product transportation costs
  3. Americans are richer and spend more on a per capita basis. U.S. household net adjusted disposable income per capita is 41% more compared to Canada’s
  4. Canadians are more cautious about spending. There is a stronger focus on homeownership and housing-related expenses, which constrains spending on other items

Game-changing consumer trends in Canada

  1. The changed path of customer purchasing. More than 85% of the population is now connected to the Internet. They use it to search, review and compare products and services. More than 40% buy online
  2. The new “health mania”. The demand for health and wellness-related products is increasing. 31% of consumers are willing to pay a premium for these products
  3. Customization is king. Consumers are increasingly looking for custom-made solutions that fit their specific needs. Personalization is now a significant factor in determining value for money
  4. The “green factor” advantage. Social and environmental consciousness among consumers has reached a tipping point. 60% consider themselves ethical consumers and 30% are willing to pay a 15% premium on ethically made products
  5. The lingering effect of the recession. Consumers have become more aggressive bargain seekers. Low interest rates have spurred high debt levels to supplement stagnating wages

Source: Business Development Bank of Canada

Quick facts about Canada

  • Canada has 10 provinces and three territories. The capital city is Ottawa, located close to important economic centers such as Toronto, Montreal and Quebec City
  • Canada is a constitutional monarchy. This means that the Queen or King of England is the head of state, while the Prime Minister is the head of government
  • Canada’s population is 35.9 million. The provinces of Ontario and Quebec account for 62% of the total. 90% of Canadians live within 200 km. of the U.S. border
  • Canada has the highest share  of foreign-born population in the G-8 with 20%. Chinese and South Asians are the largest visible minority groups with just over 1.8 million each
  • Canada has the 10th largest GDP in the world. The average household net-adjusted disposable income per capita is USD $29,365 a year, more than the OECD average of $25,908. Household savings ratio is 5% of disposable income
  • Canada is experiencing a moderate-to-rapid ageing process. By 2020, 18% of the population will be over 65 years. The country's median age is 40.4 years, up from 29.1 in 1980
  • Canada has two official languages: English and French