Canada should go global to remain competitive, UPS survey says

Canadian small and medium-sized enterprises (SMEs) believe that Canada must diversify its exportbase on a global level and eliminate trade barriers, to ensure the country’s economy can compete

The study reveals a high level of optimism about Canada’s international competitiveness and itsmanufacturing sector compared to one year ago.

According to the UPS barometer, conducted by the research company Angus Reid, Canadian SMEsoverwhelmingly state that the country’s economy must become more globally competitive. Almost threequarters of respondents (73%) think that Canadian businesses should put more resources intointernational trade.

In addition, almost two thirds are concerned that Canada continues to maintain an internationaltrade deficit and an equal number believe the government should either abolish all tariffs betweenCanada and other nations or provide tax incentives to export-based businesses to stimulate globaltrade.

This new attitude strongly differs from the previous quarter, when 40% of SMEs believedcompanies should do business within Canada in order to sustain the country’s competitiveness.Similarly, 51% stated that Canada should establish tariffs to discourage overseas exporters fromaccessing the Canadian market.

UPS Canada president Mike Tierney commented: “More than half of Canada’s SMEs have told us thatunless Canada significantly improves value-add innovations and diversifies its export base beyondits traditional focus on natural resources, the country could be in serious trouble in thelong-term.”

Most SMEs consider Canada’s manufacturing sector to be very promising, the survey also reveals.While 36% describe it as high cost, 43% say it is also high quality. Meanwhile, 57% see the recentrebound of the sector as a sign of better things to come.

However, many business still associate Canada’s exports to its traditional trading partner, theUS, as the key factor, including 45 % who believe a rebound in Canadian exports will depend on USconsumer confidence. However, 56% cite the value of the Canadian dollar as a key driver.

While SMEs’ global outlook has improved significantly, many are still insecure about goingglobal themselves. In fact, 27% said that they have never considered exporting because they don’tthink there’s much of a market outside of Canada for what they offer. In addition, one in five SMEsdoesn’t believe it can compete with counterparts in emerging markets such as China, India andBrazil.

“With SMEs representing more than 90% of Canadian commerce, it is critical that they become moreengaged in the global marketplace,” Tierney added. “There is international interest in, and demandfor, Canadian goods that goes far beyond the traditional natural resources sector that hasdominated Canadian exports. SMEs should invest in these opportunities as they can provide acompetitive advantage.”

The Angus Reid Public Opinion survey was conducted from 9 March to 21 March 2011 among 546randomly selected Canadian adults who own a small to medium-sized enterprise.