The United States of America
Market Access Plan 2015-2017

CapitalPopulationTotal AreaCurrency
Washington319.0 million9,147,420 km²Dollar

Why the United States Matters

The United States is:

  • a priority established market under Canada’s Global Markets Action Plan;
  • Canada’s largest trading partner with bilateral trade in goods and services reaching $870 billion in 2014;
  • the top export destination for every Canadian province and the Yukon;
  • home to the world's most influential financial market — the New York Stock Exchange, which is by far the largest stock exchange in the world based on market capitalization; and
  • a global business and innovation leader: entering the U.S. market enables companies to test their products and technologies in a highly competitive market, gain insight into global business and innovation trends, secure financing and capital, enter into research and development (R&D) and innovation partnerships, penetrate supply chains, build their global network, and better position themselves to pursue opportunities beyond the United States.

The United States has the largest economy in the world, equivalent to nearly 23 percent of the world’s gross domestic product (GDP) and is the second largest manufacturer in the world. The United States also has the largest consumer market in the world with consumption expenditure three-times larger than China, the next-largest consumer market.

As of 2014, 128 of the Fortune Global 500 world’s largest companies (ranked by revenue) had their headquarters in the United States. Among firms on that list that are headquartered elsewhere, the vast majority also have significant U.S. operations.

The United States also has an innovation ecosystem that is globally unparalleled and characterized by world-class universities and research institutions, innovative start-ups, multinationals with significant R&D budgets, and large, deep pools of venture capital (VC). In 2014, U.S.-based firms accounted for 63 percent of all global VC activity (PitchBook, 2014).

Considerable business opportunities exist for Canadian businesses across virtually every sector in the United States including aerospace, automotive, information communication technologies, infrastructure, life sciences, oil and gas, and sustainable technologies. As products, services, markets and value chains evolve, there will also be opportunities for Canadian industry to foster commercialization of innovative solutions through trade, investment, partnerships and joint research projects.

In addition to opportunities in the United States itself, the country can also serve as a gateway to other global markets. The pathway for the success of small and medium sized enterprises (SMEs) globally often begins in the United States, where they can grow their businesses, build their international business capacity and better position themselves to pursue opportunities in third markets, including in high-growth emerging markets. To more effectively pursue opportunities in third markets, Canadian firms are increasingly partnering with Fortune Global 500 companies, other large firms, and VC funds in the United States that also have a significant global reach.

Domestic Economic Environment

The U.S. budget deficit has dropped from 11 percent of GDP in 2010 to 6 percent in 2014. Although the United States is able to borrow essentially unlimited funds in its own currency at low, long-term interest rates, there is a strong perception among many in Congress that fiscal policy must be further tightened. Considering the last few years of political gridlock on spending and taxation, questions on the direction of U.S. fiscal policy will continue to be a major element of the political debate. Monetary policy, independently managed by the U.S. Federal Reserve, is very loose, with ultra-low interest rates and a quantitative easing program that is being wound down.

Key Figures – United States (2014)
GDP$19,238.6 billion
GDP per capita$60,300
GDP growth2.4%
Inflation1.6%
Unemployment6.2%
Canada’s merchandise exports$403,100.3 million
Canada’s merchandise imports$277,987.3 million
Canada’s service exports$52,739 million
Canada’s service imports$66,831 million
Foreign direct investment from the United States into Canada$361,372 million
Canadian direct investment in the United States$349,965 million
Potential long-term annual export growth2.8%

Canadian Commercial Interests in the United States

Overview

In 2014, Canada-U.S. bilateral trade in goods and services reached $870 billion, equivalent to approximately $1.6 million in trade per minute. About 77 percent of all Canadian exports go to the United States, while only 3.7 percent go to China, Canada’s second-largest trading partner.

In the ten-year period between 2005 and 2014, the value of U.S. exports of merchandise to Canada has increased by 34 percent (in Canadian dollars), while Canadian exports to the United States rose by 10 percent. In 2014 alone, Canadian exports to the United States increased by $45 billion.

Canada-U.S. trade, however, goes beyond simply selling goods and services to our respective consumers with hundreds of companies in both countries often feeding into the value chain of a single product. A large percentage of our bilateral trade consists of intermediate products that are feeding cross-border manufacturing processes and supply chains. Together, Canadian and U.S. firms are creating new technologies and building innovative and competitive products and services that are sold globally. Our economies are bound together by complex supply chains that may include cross-border R&D and innovation teams, product design and development, manufacturing processes, distribution channels, financing, marketing, and after-sales support.

The United States is also Canada’s single most important source of foreign direct investment (FDI). Between 2005 and 2014, the dollar value of the stock of U.S. FDI in Canada increased 43.7 percent to nearly $361.4 billion, putting the U.S. share of total global FDI in Canada at 49.4 percent (Statistics Canada). Canada is an appealing destination for U.S. investors for a number of reasons, including geographic proximity and logistical advantages, low corporate tax rates, and a highly skilled and educated workforce, In 2014, U.S. firms announced 118 greenfield and expansion investments in Canada with a total capital value of $3.9 billion and an estimated 7,391 new jobs (fDiMarkets). Additionally, forecasts for the next five years indicate that the United States will remain the dominant source of global FDI into Canada.

The United States is also a major source of global venture capital for Canadian start-ups and SMEs. Of the total foreign VC investments in Canada during the period from 2009 to the end of 2014, 79 percent was from U.S.-based VCs (PitchBook, 2015 Annual U.S. Private Equity Breakdown Report).

In the area of scientific research, the United States is Canada’s primary international partner. In 2014, the United States accounted for almost half of Canada's international co-publications in natural sciences and engineering. The number of Canadian collaborations with the United States more than doubled since 1996 to over 12,000 papers in 2014.

The U.S. economy presents enormous opportunities for Canadian business and is a primary source of capital, technology and talent. The Canada-U.S. shared border is more than a simple geographical boundary; it is also the site of more than 100 ports of entry, where the efficient movement of people and goods is crucial to the daily lives of our citizens, the health of our communities and the competitiveness of our economies.

Canada’s economy benefits from relatively free and open access to the United States due to the Canada-U.S. Free Trade Agreement (1989) and the North American Free Trade Agreement (NAFTA) (1994). Under NAFTA, Canada-U.S. bilateral trade in goods and services has doubled. To further strengthen North America’s global competitiveness and enable business opportunities, jobs, and prosperity, Canada and the United States are working to ensure a border that facilitates trade and travel, improves alignment of regulatory measures, and achieves an ambitious outcome in the Trans-Pacific Partnership (TPP) agreement negotiations.

In 2011, Prime Minister Stephen Harper and President Barack Obama announced The Beyond the Border (BtB) Action Plan and Regulatory Cooperation Council (RCC). The BtB includes more than thirty initiatives that will improve both countries’ abilities to manage security risks, while accelerating the flow of people, goods and services. The BtB sets ambitious, but achievable, goals that will lead to greater security and advance economic opportunity.

The RCC is working to increase regulatory cooperation between both countries. Effective regulations protect our health, safety and the environment while supporting growth, investment, innovation, and market openness. Canada and the United States are focusing on simplifying and aligning regulations where possible to lower costs for businesses, reduce red tape, offer better prices and choices for consumers, facilitate trade and investment, and ultimately generate more jobs on both sides of the border.

Also facilitating trade and travel will be the Detroit River International Crossing (DRIC) project to construct a new bridge between Detroit, Michigan and Windsor, Ontario. About 30 percent of total U.S.-Canada trade crosses the Windsor-Detroit international trade corridor and more than 8,000 trucks cross the existing Ambassador Bridge daily. In April 2013, the U.S. State Department issued a presidential permit for the construction of this new bridge. In July 2014, Canada and the United States announced the creation of the Windsor-Detroit Bridge Authority and the Canada-Michigan International Authority, the two oversight bodies for the DRIC. The DRIC will create thousands of construction jobs and long-term employment opportunities on both sides of the border and will enable efficiencies in the just-in-time inventory systems of automotive and other supply chains that depend on that border crossing.

Key Elements for Exporters to Consider

The U.S. economy presents a very attractive, but intensely competitive, marketplace for Canadian goods and services. Despite the dynamism of the commercial relationship, Canada’s overall export market share in the United States has declined from 18.8 percent of U.S. merchandise imports in 2000 to 14.8 percent in 2014. This phenomenon is partly attributable to diversification of Canadian export markets, but is also a result of greater and more diverse foreign competition in the U.S. market.

The Canadian government’s overarching objective in its bilateral relationship with the United States is to increase economic growth, competitiveness and job creation, notably by continuing to advance and implement the Beyond the Border and Regulatory Cooperation Council action plans, seeking approval of the Keystone XL pipeline project and implementing the Detroit River International Crossing bridge project. Successful negotiations of a Trans-Pacific Partnership agreement, a joint priority, would also contribute significantly to this overarching objective.
For the foreseeable future, the United States will continue to be Canada’s preeminent trading partner, its primary source of foreign capital, technology, and talent, and the market of choice for Canadian SMEs. As the U.S. economy continues to rebound, opportunities will increase for Canadian SMEs wanting to export their goods and services to the United States, secure financing including venture capital, penetrate global supply chains, and build R&D and innovation partnerships.

Sector-specific Opportunities and Challenges

Aerospace

The U.S. aviation sector is experiencing unprecedented growth. Boeing is headquartered in the United States, while Airbus and its European suppliers continue to increase their North American footprint, creating new opportunities for Canadian companies.

Both Boeing and Airbus are increasingly outsourcing major subassemblies (such as engines, structures, landing gear and avionics) to large “Tier 1” suppliers, themselves multinationals that carry out design, development and manufacturing. These Tier 1 suppliers are major customers for Canadian aerospace companies. Tier 1 suppliers are also increasingly interested in investing in Canada as another means to grow their presence in North America and, as such, creating additional business opportunities for Canadian suppliers.

The Canadian aerospace industry is highly integrated into global value chains and it exports 80 percent of its domestic production. The United States is by far the largest export destination, receiving 59 percent of total Canadian aerospace exports.

According to the Canadian Space Agency, the United States is also the largest destination for Canadian space-related products, technologies, and services, receiving 42.9 percent of Canada’s exports in this subsector. The Canadian space industry is built upon a strong and unique foundation of collaboration with leading space-faring countries and is recognized as a partner of choice by major international agencies, such as the U.S. National Aeronautics and Space Administration (NASA).

Agriculture and Processed Foods

U.S. grocery retail sales for 2014 were just over US$1 trillion and consumer food service sales were valued at about US$506.2 billion in 2014 (Euromonitor International, 2015).

The United States’ top agri-food and seafood imports in 2014 were: frozen seafood (mainly shrimp), spirit beverages, coffee, wine, fish and beer. Canada is the top supplier of U.S. imports providing 18.6 percent of all agri-food and seafood imported into the U.S. including 46.7 percent of bakery products and 15.0 percent of fish and seafood imports. Canada is also the United States’ largest supplier of pork, live cattle and pulses.

As the U.S. economy continues to improve, consumer spending is also recovering, offering opportunities for Canadian firms to increase their exports to the United States, especially for products where there is growing demand, such as canola, fish and seafood, wine and pulses. The U.S. grocery retail sector presents opportunities for new entrants in the market, but also presents a number of challenges the biggest of which is typically cost competitiveness with U.S. firms.

Automotive

North America remains a mature, saturated, highly competitive yet lucrative automotive market where sales are aggressive and market share is difficult to achieve. Canada is part of an integrated North American market with annual sales of about 20 million vehicles and production of 17 million units in 2014. Since the recession of 2008 and 2009, new vehicle sales and production have rebounded to pre-recession levels. Vehicle assemblers and suppliers are under pressure to restore lost production output and, for the most part, demand is strong. In 2014, Canada accounted for 13.7 percent of North America’s motor vehicle production (not including parts).

The Canadian auto sector's 100 year history is closely tied to that of the United States and, not surprisingly, is still highly dependent on North American demand. Canadian and American automotive supply chains are fully integrated: the United States accounts for 97 percent of Canada's exports and nearly 55 percent of imports.

U.S.-headquartered companies account for a significant portion of Canada's automotive manufacturing and engineering capacity. In addition, most Asian and European automotive companies have a North American headquarters in the United States responsible for the continent. Canadian firms should engage these headquarters as they play a key role in helping their parent company make their North American production, procurement, investment, and engineering decisions.

The United States is also home to the world’s largest cluster of automotive R&D centres. Metropolitan Detroit is the centre of the U.S. auto industry. The growth of the automotive market and its development of higher technology solutions present both significant opportunities for Canadian companies in terms of direct business and key innovation partnerships.

A challenge for Canada in this sector is the shift of new automotive investment in the United States toward more southern states, where investment is attractive, often because of aggressive economic incentives. This has created new clusters of suppliers and assembly facilities that threaten Canada’s share of the North American market.

Chemicals

According to the U.S. Department of Commerce, the chemicals industry is one of the largest manufacturing industries in the United States. Canada’s chemical exports to the United States are on an upward trend. According to Statistics Canada and the U.S. Census Bureau, chemical manufacturing exports from Canada increased 28 percent between 2010 and 2014, from $21 billion to $26.9 billion. The sector offers opportunities especially for Canadian firms that are seeking research and innovation partnerships. Comprising more than 10,000 firms, the industry reached US$57 billion in R&D investments in 2012, and generated one-fifth of all patents granted in the United States.

It is expected that the U.S. chemicals industry will continue to grow as key end-use industries also witness strong performance, including the auto industry, construction, plastics, and industrial machinery. This growth should generate more opportunities for Canadian firms across several subsectors including basic chemicals, specialty chemicals, agricultural chemicals and pharmaceuticals.

Consumer Products

According to the U.S. Department of Commerce, in 2012, the U.S. consumer goods market was the largest in the world, estimated at US$419 billion, and presents opportunities for both large and small Canadian companies across the range of subsectors that make up the consumer products sector. Opportunities for Canadian companies exist in appliances, toys, furniture and home furnishings, recreational boats, recreational vehicles, motorcycles, games, gifts, school and office products, jewelry, sporting goods, musical instruments, processed foods, and beverages.

Defence and Security

The United States accounts for about 35 percent of global defence spending, according to the Stockholm International Peace Research Institute database on military expenditures. Canada and the United States have a large number of bilateral arrangements and agreements relating to trade in defence, including the 1956 Defence Production Sharing Agreement (DPSA), which allows Canadian firms first access to most U.S. defence procurements on normal commercial terms. As a result, Canada’s defence sector is integrated with that of the United States into a single “North American Technology and Industrial Base”, enabling Canadian and American companies to compete on equal footing for U.S. Department of Defense contracts. The United States currently accounts for about three-quarters of Canada’s defence-related exports (Canada First: Leveraging Defence Procurement through Key Industrial Capabilities, 2013).

U.S. defence spending, however, has been on a significant downward trend recently, due to a reduced footprint in Iraq and Afghanistan, and annual reductions in U.S. government defence appropriations. U.S. prime defence contractors are responding by diversifying into related industries, such as energy, as well as attempting to increase sales to global markets.

Despite these challenges, the U.S. market continues to be fundamentally important for Canadian defence and security companies. Even with tight budgets, there are increasing opportunities for Canadian companies with niche capabilities in cyber and electronic warfare, unmanned vehicles and chemical, biological, radiological and nuclear countermeasures. The U.S. Department of Homeland Security is particularly interested in new security technologies and first responder solutions.

Canada’s integration with the U.S. defence sector extends to alignment of Canadian and U.S. export controls on many defence items. These controls have affected exports of U.S. and Canadian defence items outside North America, since international competitors increasingly offer comparable products without the need to comply with sometimes onerous export control regulations. The United States is currently implementing an ambitious reform of its export controls in order to minimise their impact on such international exports, a process that Canada is closely monitoring and that will present new export opportunities in the years ahead. However, at the present time, navigating the fluid nature of requirements for U.S. export licences has been challenging for U.S., international and Canadian companies. The Government of Canada offers support to Canadian companies to track and respond to the evolving requirements. It is anticipated that the long-term impact of these licensing changes for Canadian defence exports will be positive.

Education

The United States is a major source of international students for Canada’s post-secondary education institutions. The number of U.S. students studying abroad reached more than 289,400 in 2012-13 (Institute of International Education). According to Citizenship and Immigration Canada, 12,446 American students studied in Canada in 2014 for a period of six months or more, which represents a modest increase of 1.5 percent over 2013. The United States is Canada’s sixth-largest source country of international students and accounts for close to 4 percent of all international students in Canada. The number of U.S. students in Canada has remained relatively consistent over the past few years with numbers fluctuating between 12,000 and 12,500.

Financial Services

The United States is home to the world's most influential financial market. In 2014, finance and insurance represented 5.1 percent (or US$885.1 billion) of U.S. GDP and offered significant opportunities for Canadian firms, especially in cities such as Chicago, San Francisco, Boston, Los Angeles and New York.

The New York Stock Exchange is by far the largest stock exchange in the world by market capitalization. Since the recession, the U.S. market has experienced a dramatic shift as companies look to cut costs and invest more capital in innovation and R&D. The last few years have seen significant changes in banking, payment, tax, investment and financial disclosure regulations. With today’s cutting-edge technology, industry leaders are raising the bar in customer engagement. For instance, almost all major banks, insurance companies, and investment firms have invested in mobile technologies to offer new services to clients. Canadian financial technology companies can capitalize on the new opportunities generated from this increasing demand for premium online and mobile service.

Fish and Seafood

The United States is the largest importer of fish and seafood in the world, importing $22.5 billion in 2014, with Canada being the second-largest supplier to the United States. U.S. fish and seafood imports totaled US$2.6 billion from Canada in 2014, with crab and lobster representing Canada’s top exports to the United States in this sector. The United States was Canada’s most important destination for fish and seafood exports, and accounted for 62.0 percent of Canada’s seafood exports in 2014. The greatest opportunities for Canadian companies exist in the traditional seafood sector, in the frozen fish and seafood category, as well as in seafood and aquaculture-related technologies.

New England is a seafood hub, and its citizens consume proportionally more shellfish compared to the U.S. population as a whole, and also have a preference for fresh fish (AAFC, 2012). As such, many key seafood buyers and distributors are clustered in the New England region, which has strong historical ties with Atlantic Canada. The United States is currently experiencing increasing demand for seafood but decreasing domestic supply, creating opportunities for Canadian companies

Forestry and Wood Products

The United States is the world’s second largest consumer of forest products, ranking number one in wood pulp, softwood lumber, and paper and paperboard.

Canada is by far the largest foreign supplier of softwood lumber to the United States (over 92 percent of U.S. imports), primarily used in new home construction. In 2014, Canadian exports of softwood lumber to the United States were valued at more than $5.5 billion, with exports from British Columbia valued at more than $3.0 billion. U.S. housing starts have been rising steadily in parallel with the U.S. economic recovery, and this should provide further opportunities for Canadian mills.

Information and Communications Technology (ICT)

The United States is an international leader in information and communications technology. Canada’s ICT sector is highly export-oriented with $10.5 billion in ICT products exported globally in 2014. High-growth subsectors in the United States include: telecoms and wireless, game development and interactive entertainment, and cybersecurity. In addition, there is growing demand in the United States for ICT solutions and applications for the energy sector.

The United States is also the dominant source of FDI in Canada’s ICT sector. At year-end 2014, the stock of U.S. FDI in Canada in the ICT sector amounted to $8.3 billion, equivalent to three-quarters of the $10.7 billion in total foreign FDI stock in the sector (Statistics Canada).

To better access global Multinational Enterprise (MNE) supply chains in emerging markets, Canadian firms are increasingly targeting U.S. entry points into Asian MNE supply chains, and especially key hubs like Silicon Valley.

The Canadian Technology Accelerator (CTA) program is a Government of Canada initiative to help innovative Canadian technology SMEs grow and succeed through business accelerators in San Francisco, New York, Boston, and Denver, as well as global locations including India and Paris. The program provides Canadian firms with: office space for three to six months within business accelerators; mentoring by successful international business leaders; and enhanced access to venture capital and strategic partners, including MNEs and Canadian expatriates. As of March 2014, more than 300 companies have participated in the program, benefitting from access to services provided through the CTA initiative. In the past year, CTA participants reported a combined total of over $30 million in capital raised, increases in revenues, and increases in the number of new strategic partners identified.

Industrial Machinery

According to the U.S. Department of Commerce, the United States is the world’s largest market for machinery, as well as the third-largest supplier. Many Canadian companies are already engaged in cross-border North American supply chains, and Canadian exports of industrial machinery to the United States have grown. Canadian industrial machinery exports increased 11.7 percent from 2010 to 2014, from $16.2 billion to $18.3 billion.

Machinery and equipment is manufactured throughout the United States, but is concentrated in the industrial Midwest. California and Texas are also important states for machinery industries, while Upstate New York and Pennsylvania have a diverse base of small to medium-sized advanced manufacturers, most of which trace their roots back several decades, originally answering the needs of large manufacturing clusters that formerly populated the Northeast. The manufacturers that remain today have diversified, found new export markets, and are increasingly nimble. These manufacturers span several sectors: automotive, aerospace, medical, oil and gas, and equipment and machinery. Examples of products include heat exchangers, valves, sensors, compressors, boilers, oxygenating systems, chemicals and plastics.

Infrastructure

According to the American Society of Civil Engineers, an estimated US$3.6 trillion in new infrastructure is required in the United States by 2020 to modernize its systems and meet expanding demand (Economist Intelligence Unit, 2014). Canada’s infrastructure industry is well positioned to compete for opportunities in the United States across various subsectors, including: power, water and wastewater, social infrastructure, transportation, and sustainable/green building. The significant infrastructure deficit will ensure that the U.S. market remains an important source of demand for Canadian engineering services in the future.

The U.S. market also offers significant potential for Canadian expertise in public-private partnerships (P3s) as U.S. infrastructure needs grow without any corresponding increase in funding for these projects. Currently, 36 states and Puerto Rico have P3 authorizing legislation for transportation projects, and 39 states have some form of P3 authorizing legislation for either transportation or social infrastructure projects, with several other states exploring similar legislation (Moody’s Investors Service Special Comment: Public-Private Partnerships – Global P3 Landscape 2014; DFATD U.S. P3 Task Force, 2015). The United States has the potential to become the largest P3 market in the world given the sheer size of its infrastructure.

Life Sciences

The United States presents opportunities in all subsectors of life sciences (pharmaceuticals, medical devices and health information technology) for cross-border trade, investment and innovation/strategic alliances. The United States’ top life sciences imports in 2013 were small molecule pharmaceuticals and biologics such as hormones, insulin, blood products, and vaccines.

Canada is the sixth-largest pharmaceutical supplier to the United States, and exported $4.9 billion worth of pharmaceutical products there. There are several major American clusters for life sciences R&D in pharmaceuticals (human and animal), medical devices and health IT, including Boston, San Francisco and San Diego. The life sciences innovation ecosystem in the United States includes large American corporations (e.g., Johnson & Johnson, Pfizer, Amgen and Medtronic), foreign MNEs (Novartis, Roche, Sanofi and GlaxoSmithKline), world-renowned university programs and federal laboratories, venture capital investors, incubators and accelerators, and public-private collaborations. The U.S. pharmaceutical industry is supported by a system of specialized service companies (contract research organizations, bioscience-related distribution, law and consulting firms, advertising and public relations firms).

Pharmaceutical companies are seeking drug-development partnerships with innovative companies, universities, not-for-profit organizations and governments to partner with them. They are actively searching for early-stage technologies and some have created venture funds to invest early in innovative companies (e.g., Baxter, Pfizer and Amgen). Due to the implementation of the Affordable Care Act and the convergence of mobile, wireless and Internet technologies that are transforming the delivery of healthcare, opportunities exist for innovative Canadian software companies with applications for electronic medical records, data security, telehealth and medical imaging.

Mining

In 2014, Canadian domestic mineral and metals exports to the United States totalled $39.7 billion. According to the U.S Geological Survey, during 2014, the United States was completely dependent on foreign suppliers for 19 mineral commodities and more than 50-percent dependent on foreign sources for at least 24 others. In 2013, Canadian mining assets in the United States totalled $19.7 billion, representing some 218 Canadian-based companies with significant assets, making the United States the third-largest destination for Canadian mining assets located outside Canada (after Chile and Mexico). The U.S. mining industry, led by the National Mining Association, is spearheading a movement asking the government to pass a number of legislative amendments aimed at improving government coordination while streamlining the project review and permitting process of several critical and strategic minerals, and thus reducing the U.S. reliance on foreign countries. While this might have a downward effect on Canadian mineral exports, the passage of such legislation could make the U.S. market more attractive to Canadian mining and exploration companies.

Ocean Technologies

New England is home to a U.S. ocean technology cluster that is anchored around world-class research institutions. These institutions are early adopters and purchasers of new marine technologies (particularly marine robotics and sensors) and represent key innovation partners for Canadian firms.

Key subsectors of opportunity in the region include: marine defence (shipbuilding, submarines, and related components), ocean observation systems, marine robotics (platforms and components), and unmanned and remotely operated vehicles. Outside of New England, some ocean industry opportunities also exist in Florida and California.

Oil and Gas

The United States is the world’s largest energy consumer and Canada is by far its largest supplier. Essentially all Canadian oil exports go to the United States (97 percent in 2014), and Canada is by far the largest supplier of foreign oil to the United States In the last five years, crude oil from Canada has been displacing crude oil coming from other countries. All of Canada's natural gas exports are directed to the United States via pipeline, and Canada accounted for approximately 97 percent of U.S. natural gas imports in 2013, most of which comes from western provinces.

Canada is a major supplier of oil and gas technologies, oil field equipment and services to large oil and gas MNEs in the United States. Many Canadian firms also operate refineries in the United States.

The greatest opportunities for Canadian firms are in the following areas:

  • supplies for conventional oil and gas activity (in Texas, Louisiana, Oklahoma, and Colorado);
  • supplies for unconventional oil and gas activity (in Texas, Colorado, Louisiana, Arkansas, North Dakota, Wyoming, Pennsylvania, Ohio, and West Virginia);
  • pipeline construction, operation, supplies and services (throughout the United States); and
  • refinery construction, operation, supplies and services (in Texas, Louisiana, and Illinois).

In addition, Texas is also regarded as a location to pursue third markets through partnerships with global MNEs that have a presence there.

U.S. energy policy is influenced by two key challenges: how to increase security by reducing its dependence on imported supplies, and how to address growing emissions of greenhouse gases. Its national strategy is to find solutions largely through technology. After declining for almost three decades, U.S. domestic oil production has surged in the past five years as a result of technological innovations and the production of light (shale or tight) oil from shale formations. This production has grown to more than three million barrels per day, which may reduce demand for Canadian imports or reduce prices owing to increases in supply.

Sustainable Technologies

In the United States, supportive policies and aggressive technology deployments have made renewable energy generation – in particular residential and commercial solar – an increasingly popular choice. Eleven states generated more than 10 percent of their electricity from renewable energy sources (not including hydro) in 2013, with two, Iowa and South Dakota, exceeding 25 percent.

In June 2014, the U.S. Environmental Protection Agency announced regulations seeking to cut greenhouse gas emissions by 30 percent from 2005 levels by 2030. The new rules will face political and legal challenges, but could dramatically accelerate the ongoing shift from coal-fired power generation to a future of renewables, energy efficiency, and natural gas. Implementation of the carbon rules would be left up to the states.

According to the European Investment Bank, the United States ranks last among the top nine Western industrialized nations in the average length of power outages, which cost American businesses as much as US$150 billion per year. As such, there will be future opportunities for Canadian smart grid companies as many U.S. utility companies invest in upgrading their network infrastructure.

According to the 2014 U.S. Cleantech Leadership Index produced by Clean Edge, the United States is globally recognized as the most attractive country for renewable energy investment. Given the significant role that states play in setting their own policies and programs, new technology clusters have coalesced around states with the more supportive policies. California ranks first in the U.S. Cleantech Leadership Index, dominating every category measured: clean electricity generation, electric/hybrid vehicle adoption, green buildings, policy outlook, solar power capacity, and venture capital. Massachusetts ranked second and Oregon, third. In terms of leading cities, California, not surprisingly, dominated the rankings, with five of the top-seven cleantech cities: San Francisco (1), San Jose (2), San Diego (3), Sacramento (5) and Los Angeles (7). East coast cities ranking in the top ten include Boston (6) and Washington D.C. (8).

In the water and wastewater subsector, significant opportunities exist for Canadian firms as U.S. counties and municipalities are seeking new and innovative water and wastewater technology to replace old and inefficient water systems. Several municipalities have made it a priority to replace or upgrade their waterworks in order to lower ongoing operating costs and become more efficient.

Tourism

The United States is Canada’s largest inbound tourism market, representing approximately 70 percent of overnight tourists to Canada. In 2014, 11.5 million U.S. overnight tourists came to Canada.

On May 22, 2015, Prime Minister Stephen Harper announced support for a major new tourism campaign to attract more American visitors to destinations across Canada. The Connecting America campaign, which will be undertaken from 2015 to 2018, will use new technologies and innovative approaches to reach out to travellers from the United States. The initiative will enable the Canadian Tourism Commission to collaborate with partners in the private sector, international travel trade (e.g., travel agents, tour operators), and the provinces and territories to promote Canada as a premier tourism destination, creating new opportunities for the sector.

Transportation

In the United States the logistics and transportation industry is highly competitive. A highly integrated cross-border supply chain network links producers and consumers through multiple transportation modes, including air and express delivery services, freight rail, maritime transport, and truck transport. To serve customers efficiently, both large and small companies in the United States require tailored logistics and transportation solutions that ensure coordinated goods movement from origin to end user through each supply chain network segment. Canadian companies offering transportation logistics and supply chain solutions can capitalize on these opportunities. Industry subsectors include logistics services, air and express delivery services, freight rail, maritime and trucking.

Wine, Beer and Spirits

The U.S. market for wine, beer and spirits is mature, saturated and highly competitive. It is the second-largest global market for spirits; it offers a robust market for beer, in particular craft beer; and is the world’s largest consumer of wine by volume. For Canada, the United States is by far the largest export market for Canadian wine, beer and spirits. In 2014, for example, 97.4 percent of total Canadian wine export volume and 59.6 percent of wine export value went to the United States. Furthermore, about 95 percent of Canadian whisky exports, by value and volume, were destined for the United States.

While the United States offers tremendous export opportunities, the sector is also complex and highly regulated. The U.S. Alcohol, Tobacco, Tax and Trade Bureau regulates the sale and movement of all alcoholic beverages in the United States, with additional regulations regarding sales and distribution varying from state to state. In some cases individual municipalities may also have their own regulations.

Major Negotiations and Agreements

Trans-Pacific Partnership (TPP)

The TPP Agreement is the most comprehensive and ambitious regional trade agreement in the Asia Pacific and will deepen Canada’s trade ties in this dynamic and fast growing region. The TPP currently comprises 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam), representing a combined market of nearly 800 million people and a GDP of $28.5 trillion.

The North America Free Trade Agreement (NAFTA)

Chief among Canada’s agreements with the United States is NAFTA, which is the successor of the Canada-U.S. Free Trade Agreement of 1989. These agreements have provided a solid foundation for Canada’s future prosperity, facilitated Canada’s continued advancement of a broader economic and commercial relationship with the United States and Mexico, and strengthened North American trade and competitiveness.

NAFTA recently marked its 20th anniversary of coming into force. In 1994, NAFTA was the first comprehensive trade agreement of its type, setting a new standard in trade liberalization worldwide. Since then trilateral trade has more than tripled and the North American economy has doubled in size.

The Canada-U.S. Procurement Agreement (CUSPA)

Canada and the United States signed a key agreement in 2010, CUSPA. The CUSPA was negotiated in response to the American Recovery and Reinvestment Act of 2009 (Recovery Act).

Among other things, CUSPA permanently expanded Canada-U.S. procurement obligations to the sub-federal level: the United States gave Canada access to the 37 states that are part of the U.S. commitments to the World Trade Organization Government Procurement Agreement (WTO-GPA) in exchange for provincial/territorial commitments. These reciprocal commitments took effect in 2010, and ultimately became part of the revised WTO-GPA which came into force in April 2014. Canada’s CUSPA sub-national commitments are therefore now reflected in the revised WTO-GPA and apply to all WTO-GPA parties.

Open Skies Air Transport Agreement (ATA)

The Canada-United States “Open Skies” Air Transport Agreement (ATA) has been in force since March 2007. ATAs facilitate passenger and all-cargo traffic, with benefits for trade, investment, tourism and people-to-people ties.

The North American Agreement on Labour Cooperation (NAALC)

In conjunction with NAFTA, NAALC came into effect in January 1994. It is one of two parallel accords to the
NAFTA. The agreement is administered by the Commission for Labour Cooperation, which consists of a council of ministers and a tri-national secretariat. Currently, four provinces (Quebec, Alberta, Manitoba and Prince Edward Island) are signatories to the NAALC through an intergovernmental agreement.

The North American Agreement on Environmental Cooperation (NAAEC)

The second parallel accord in conjunction with NAFTA is NAAEC, which established the Commission on Environmental Cooperation (CEC) in 1994. The CEC is mandated to enhance regional environmental cooperation, reduce potential trade and environmental conflicts and promote the effective enforcement of environmental law. It also facilitates cooperation and public participation in efforts to foster conservation, protection and enhancement of the North American environment. 

There are also hundreds of sub-national agreements between various Canadian and U.S. jurisdictions and government agencies and organizations, including 41 agency-to-agency science and technology agreements.

Selected Trade Initiatives – Seize the Opportunity!

  • Aerospace; Defence and Security
    • Pacific Northwest Aerospace Alliance (PNAA) Annual Conference, February 2016, Lynnwood, WA
    • Aerospace and Defense Suppliers Summit (ADSS), April 2016, Seattle, WA
    • Association of Unmanned Vehicle Systems International (AUVSI), May 2016, New Orleans, LA
  • Automotive
    • Intelligent Transport Systems (ITS) World Congress, October 2015, Bordeaux, France
    • North American International Auto Show (NAIAS), January 2016, Detroit, MI
  • Agriculture and Processed Foods
    • Americas Food and Beverage Show, October 2015, Miami, FL
    • Private Label Manufacturers Association Show, November 2015 Chicago, IL
    • Seafood Expo North America and Seafood Processing North America, March 2016, Boston, MA
  • Education
    • National Association for College Admission Counseling Annual Conference, October 2015, San Diego, CA
  • ICT
    • CTIA Super Mobility Week, September 2016, Las Vegas, NV
    • Consumer Electronics Show (CES), January 2016, Las Vegas, NV
    • Game Developers Conference (GDC), March 2016, San Francisco, CA
  • Infrastructure
    • Greenbuild International Conference and Expo, November 2015, Washington DC
    • National Association of Home Builders (NAHB) International Builders’ Show, January 2016, Las Vegas, NV
    • P3 Connect, Annual Meeting of the National Council for Public-Private Partnerships
  • Life Sciences
    • AdvaMed, October 2015, San Diego, CA
    • Healthcare Information and Management Systems Society (HIMSS), February-March 2016, Las Vegas, NV
    • BIO International Convention, June 2016, San Francisco, CA
  • Mining
    • MINExpo International, September 2016, Las Vegas, NV
  • Oil and Gas
    • North America Prospect Expo (NAPE), February 2016, Houston, TX
    • Offshore Technology Conference (OTC), May 2016, Houston, TX
  • Sustainable Technologies
    • Water Environment Federation’s Annual Technical Exhibition and Conference (WEFTEC), September 2016, Chicago, IL
    • World Congress on Industrial Biotechnology, April 17-20, 2016, San Diego, California

Support Services

  • Canada’s Trade Commissioner Service (TCS): The TCS has offices in 16 locations across the United States: Atlanta; Boston; Chicago; Dallas; Denver; Detroit; Houston; Los Angeles; Miami; Minneapolis; New York; Palo Alto; San Diego; San Francisco; Seattle; and Washington D.C. The TCS offers foreign market intelligence, introductions in key networks, cost and risk-reduction advice, business-problem troubleshooting, and on-the-ground support.
  • The Embassy of Canada to the United States: Canadian government offices abroad provide a variety of services, including consular services.
  • Agriculture and Agri-Food Canada: Representation in Washington D.C.
  • Canada Border Services Agency: Representation in Miami and Washington. D.C.
  • Canadian Security Intelligence: Representation in Washington D.C.
  • Department of National Defence: Representation in Washington D.C.
  • Industry Canada: Representation in Washington D.C.
  • Public Safety: Representation in Washington D.C.
  • Public Works and Government Services Canada: Representation in Washington D.C.
  • Canadian Space Agency: Representation in Washington D.C.
  • Royal Canadian Mounted Police: Representation in Miami and Washington D.C.
  • Transport Canada: Representation in Washington D.C.
  • Export Development Canada (EDC): EDC services can include market knowledge, credit insurance, bank guarantees, foreign buyer financing, political risk insurance, foreign investments and foreign affiliate support.
  • Canadian Commercial Corporation (CCC): CCC provides assistance with government-to government contracting.

Where not otherwise indicated, the information is provided by the Embassy of Canada in Washington, D.C.. This document is not intended to provide specific advice and should not be relied on as such. It is intended as an overview only. No action or decision should be taken without detailed independent research and professional advice concerning the specific subject matter of such action or decision. While Foreign Affairs, Trade and Development Canada (DFATD) has made reasonable efforts to ensure that the information contained in this document is accurate, DFATD does not represent or warrant the accurateness, timeliness or completeness of the information contained herein. This document or any part of it may become obsolete at any time. It is the user’s responsibility to verify any information contained herein before relying on such information. DFATD is not liable in any manner whatsoever for any loss or damage caused by or resulting from any inaccuracies, errors or omissions in the information contained in this document. This document is not intended to and does not constitute investment, legal or tax advice. For investment, legal or tax advice, please consult a qualified professional.