Canada and Florida:
An Economic Impact Study
March 2011
Produced by the Canadian Trade Commissioner Service
Table of Contents
The Canada-Florida Economic Relationship
- Exports Lost Along the Way
- Driving Forces
- Florida’s Exports to Canada
- Canadian Exports to Florida
- Provincial Concentration of Direct Trade
- Transshipment
- Impact on Florida’s Economy
- Types of Canadian Travelers
- Seasonal Variations
- Principal Destinations
- Modes of Transportation
- Visit Duration
- Visitor Spending
The Canada-Florida Economic Relationship
Florida and Canada have long enjoyed a prosperous and diverse economic relationship that extends well beyond orange juice, lumber and sandy shorelines. Despite the effects of the economic crisis in both countries, two-way trade rebounded 20% in 2010 to reach almost $8 billion, withstanding the downturn and highlighting efficiencies created by trade integration. Canadians are buying up Florida real estate at a faster rate now than they were during the housing boom years. Whether drawn by the warmth, burgeoning local industries and markets, or quick access to Latin America, Canadians are discovering investment and trade synergies in the Florida sun.
In 2003, InfoAmericas, a leading regional market intelligence & consultancy firm now operating as Americas Market Intelligence, was asked to assess the Canada-Florida economic partnership and frame that analysis vis-à-vis Florida’s often higher-profile economic partners in Latin America, Europe and Asia. The 2003 study and its 2008 update surprised many readers by revealing that Canada was undisputedly Florida’s most significant international economic partner. Now in 2011, in the aftermath of the economic crisis, the study was revisited to determine how these linkages have evolved and identify new areas of growth.
Canada is Florida’s #1 source of in-bound tourism, #1 foreign buyer of Florida real-estate, the #3 destination of Florida exports (after Switzerland and Brazil), and one of the largest contributors of foreign direct investment in the state. In terms of total trade, Canada is one of Florida’s top international trading partners, exchanging nearly $8 billion in merchandise in 2010. Integrated industries showcase their roles in each other’s global value chains. The surplus in trade enjoyed by Canada shrank significantly during the crisis to about $230 million. Preliminary figures show tourism spending soared by an estimated 30% in 2010 and probably exceeded $3.5 billion by years end. Additionally, Canadians were responsible for about 8% of all home purchases in the state (36% of foreign buyer purchases), totaling about $2.1 billion. The Canada-Florida economic relationship sustains close to 500,000 direct and indirect jobs in Florida, representing 5.4% of all of Florida’s non-agricultural employment. This document examines each of the three main components of the Florida-Canada economic relationship: trade, investment and tourism.
| 2007 | 2010 | |
|---|---|---|
| Canadian Exports to Florida | $4.9 | $4.1 |
| Floridian Exports to Canada | $3.7 | $3.9 |
| Canadian Tourist Spending in Florida | $2.8 | $3.5 est. |
| Canadian Affiliate Real Assets in Florida | $3.0 | $3.4 |
| Canadian Residential Real Estate Purchases in Florida | $2.0 | $2.1 |
| Total | $16.4 | $17.1 |
Merchandise Trade
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
|---|---|---|---|---|---|---|
| Switzerland | 0.15 | 0.29 | 0.63 | 1.66 | 3.24 | 5.01 |
| Brazil | 3.06 | 3.70 | 3.95 | 4.92 | 4.29 | 4.72 |
| Canada | 2.82 | 2.99 | 3.71 | 3.80 | 2.97 | 3.85 |
| Venezuela | 2.07 | 2.87 | 3.18 | 4.11 | 3.41 | 3.46 |
| Mexico | 2.02 | 2.45 | 3.10 | 2.50 | 2.01 | 2.18 |
| Colombia | 1.29 | 1.57 | 2.06 | 2.45 | 2.10 | 2.52 |
| Switzerland | 5,012 |
|---|---|
| Brazil | 4,723 |
| Canada | 3,853 |
| Venezuela | 3,461 |
| Colombia | 2,521 |
| Mexico | 2,178 |
| Chile | 1,725 |
| Dominican Rep. | 1,705 |
| Paraguay | 1,442 |
| Peru | 1,353 |
| Total (all countries) | 55,227 |
Source: Exports.gov
Statistical note: Data is taken from the Office of Trade and Industry Information (OTII), Manufacturing and Services, International Trade Administration, U.S. Department of Commerce. Total Exports include re-exported goods.
Despite Florida’s distance from the Canada-US border, Canada remains one of Florida’s top economic trading partners - a relationship worth $7.9 billion in total trade. At $3.85 billion, Canada ranks third as the top export market for Florida after Switzerland with $5.01 billion (95% of which is scrap precious metal) and Brazil with $4.72 billion. According to the Federal Trade Commission, Florida registered $2.0 billion in Brazilian imports in 2009 (latest year available), down from $3.31 billion in 2007, while imports from Canada totaled $3.6 billion in 2009 and $4.1 billion in 2010.
Floridian exports to Brazil and Canada since 2006 have grown in concert with one another, at Compounded Annual Growth Rates (CAGRs) of 6.3 % and 6.5% and four-year expansion of 28% and 29% respectively. Both export markets took a downturn in 2009, but Canada fell further with a 22% decrease in imports from Florida compared to a 13% decline for Brazil, due to a decline in the value of the Canadian dollar. However, exports to Canada more than bounced back with a 30% gain in 2010, dwarfing the mere 10% increase in exports to Brazil. Total Florida exports to the world in 2010 expanded 18%, showing that an established customer like Canada can still offer untapped growth opportunities.
Trade between Florida and Canada is highly diversified, spreading the economic benefits across various sectors and geographies of the state. No single product sector represents more than 32% of a partner’s imports or exports. This diversity helps to spread the economic benefits of trade with Canada throughout the state generating business for both the traditional agricultural sector and for high technology industries. In 2010 for example, Florida’s top-ranked export to Canada was $220 million worth of medical and precision instrumentation. The second-ranked product was $194 million in processed vegetables, fruits or nuts – largely comprised of fruit juices. Pharmaceutical products and vehicle parts, also in the top five, further exhibit Florida’s clear export diversity and value-added complexity.
Likewise, Canadian exports to Florida come from a wide array of industries and production centers. After petroleum oil preparations, furniture is the second-ranked import, valuing $145 million in 2010. While natural-resource based products rank as top exports, they share prominence with high value-added products such as engines and various aircraft.
Exports Lost Along the Way
According to data published by the US Bureau of Transportation Statistics (BTS), in 2007, 88.4% of trade between Canada and Florida was carried by surface modes of transportation and did not pass through a customs port of entry in Florida. For this reason, some published trade statistics that are based only on overseas traffic through international ports seriously understate the importance of Canada-Florida trade. Florida exports often pass through mid-western and Atlantic states en route to Canada, adding components and value along the way and thereby become reclassified as exports originating from those states, not from Florida. Likewise Canadian products may be imported by a company in Pennsylvania, who then breaks up the shipment, re-labels it and reships it onto a distributor in Florida. Country of origin reporting obligations are far more lax on products crossing state borders than they are crossing an international border.
Driving Forces
| 2006 | 2007 | 2008 | 2009 | 2010 | |
|---|---|---|---|---|---|
| Total Imports from Canada | 4.77 | 4.90 | 4.75 | 3.61 | 4.08 |
| Canadian-Origin Imports | 3.99 | 3.83 | 3.71 | 2.85 | 3.08 |
| Total Exports to Canada | 2.99 | 3.71 | 3.80 | 2.97 | 3.85 |
| Florida-Origin Exports | 2.62 | 3.24 | 3.79 | 2.94 | Unknown at press time |
| Trade Balance | 1.78 | 1.19 | 0.95 | 0.64 | 0.23 |
| Total Trade | 7.76 | 8.61 | 8.55 | 6.58 | 7.93 |
Source: Statistics Canada, TradeStats Express, U.S. Department of Commerce, Consensus Bureau, Foreign Trade Division - State of Origin of Movement Series.
In terms of total exports (including re-exports), Canada and Florida enjoy an increasingly balanced trade relationship. Canada has a trade surplus of only $230 million. This surplus grew steadily from 2003 until 2006 to $1.8 billion, and then closed steadily as the Canadian currency appreciated to within parity of the US dollar and Florida exports surged. When goods of only Canadian and Floridian origin are considered (excluding re-exports), Florida shows a trade surplus of only $9 million in 2009, the latest year this data is available. These goods are also known as “domestic” exports/imports, and they are the focus of the remainder of this, the trade chapter of the report.
Free Trade
Trade between Canada and Florida is driven by a number of forces. The most important long-run influence has been freer trade under the Canada-US FTA and NAFTA. These agreements have led to increasing integration of the Canadian and US economies. Since the first agreement was passed in 1989, bilateral trade has tripled between Canada and the US. This integration has driven increases in inter-industry trade, as companies rely more heavily on other firms in the same industry as part of their supply-distribution networks. As a result, two-way business-to-business (B2B) trade is less influenced by short-term factors such as exchange rate fluctuations, which have comparatively greater influence on trade in consumer goods. Under NAFTA, bilateral trade between Canada and the US has grown 6% annually on average, soundly outpacing economic growth and proving that efficiencies through industry specialization and supply chain linkages can extend across a well-managed border. The data presented in this report tend to show clearly the strong economic benefits of a Canada-US border open for trade; impediments at the border can hurt economies on both sides of the border.
The impact of free trade on Canadian exports to Florida has been to push regional industries into integrated cross-border supply-chain networks. Some notable examples are pharmaceutical products, aerospace products and parts, and radio and TV broadcasting equipment. The other effect of free trade was to stimulate competition between producers in both markets, creating clear winners, such as middle and high end private boat building in Florida.
Trade Promotion Works
Undoubtedly another factor has been the increased awareness of Florida’s potential among Canadian exporters. Trade does not happen on its own accord. Many industries, especially in the fields of technology, require not only quality products but also aggressive sales promotion. From 2003-2005, the Canadian dollar soared 35% vis-à-vis the US dollar yet, Canadian exports to Florida jumped 32%. More importantly, Canadian exports of technology driven products jumped 103%. Much of this growth came from highly targeted B2B sales, generated by the sales promotion efforts of Canadian exporters who made visits to the state. The upgrade of the Miami based consulate to consulate general status has helped to increase the volume of trade missions to Florida and expanded participation of Canadian exporters in Florida based tradeshows where Canada has a longstanding presence. In late 2007, the Canadian Consulate in Miami reported that nine Canadian information and communication technology companies successfully closed over $30 million in contracts with US and Latin American resellers at a single conference held in Miami. In the 6 month period from October 2010 to April 2011 more than 220 Canadian firms participated in marquee business conferences in Florida including the America's Food and Beverage Show, the BIG Info-Tech Conference, the Gartner Conference, IITSEC Training and Simulation Show, the International Builders Show, the Second Clean Energy Dialogue, HIMMS Medical IT Show, CTIA Wireless Conference, and the Maintenance, Repair and Overhaul Conference in the aerospace sector. Tier one feedback gathered by the Consulate General of Canada in Miami confirm a minimum of 40 contracts worth well over $40 million, as well as scientific partnership agreements between research institutions and several non-disclosure agreements.
Economic Growth
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
|---|---|---|---|---|---|---|---|---|
| Canada | 1.9 | 3.1 | 3.1 | 2.8 | 2.2 | 0.5 | -2.5 | 3.1 |
| US | 2.5 | 3.6 | 2.9 | 2.8 | 1.9 | 0.0 | -2.6 | 2.8 |
The US and Canada saw GDP growth slow from 2.8% in 2006 in both countries to a low of -2.5% in Canada and -2.6% in the US by 2009. Economic growth rebounded in 2010 with 3.1% real GDP growth in Canada and 2.8% in the US.
Source: Statistics Canada, US Bureau of Economic Analysis
A look at the GDP growth of Canada and the US over the past five years proves that, although economic growth is certainly helpful for increasing trade volume, the Florida-Canada economic trade relationship can expand even in periods of cooling economic growth.
Both countries saw real GDP growth slow from 2.8% in 2006 for both economies to a low of -2.5% in Canada and -2.6% in the US by the year 2009. However, economic growth rebounded in 2010 for both Canada and the US with 3.1% and 2.8% real GDP growth respectively. Throughout the economic tumult, total trade expanded by 20%.
Economic Integration
Economic integration, driven partly by freer trade, has led to a significant increase in inter-industry trade. Florida and Canada share three of their top five export industries, as described by general product sectors. Together, the Machinery, Chemicals and Metals, and Transportation Equipment product sectors alone are responsible for 45% of Canadian-Floridian trade, representing an increase over 42% in 2007. This overall increase in integration is fundamental to future expansion of two-way trade between Canada and Florida. To better illustrate the level of specialization of each trading partner, these industries can be categorized into three groups based on the ratio of Floridian exports to Canadian exports that highlight 12 product sectors:
- Four relatively specialized Canadian sectors where Florida exports are less than 50% of Canadian exports, demonstrating a Canadian comparative advantage in the industry;
- Four relatively integrated sectors with Florida/Canada export ratios of between 74% and 160%, showing a high proportion of goods in the industry traveling both directions and indicating a great degree of inter-dependence;
- Four relatively specialized Floridian sectors with Florida/Canada export ratios of more than 165%, demonstrating a Floridian comparative advantage in the industry.
Specialized industries usually stem from natural resource endowments or technological focus. The accompanying tables list the top 12 product sectors accompanied by their five-year Compounded Annual Growth Rate (CAGR) from 2007 to 2010.
Canadian Specialized Exporters
| Canada Exports | Florida Exports | Florida/Canada | |
|---|---|---|---|
| Wood and Articles of Wood | $133 | $4 | 3% |
| Mineral Products (including Petroleum) | $613 | $31 | 5% |
| Textiles and Textile Articles | $38 | $15 | 21% |
| Plastics and Rubber Articles | $187 | $88 | 47% |
| Total | $971 | $138 | |
| Share of all Florida-Canada Exports | 29% | 5% |
Source: Primary data from Statistics Canada, Harmonized Code Sections
Statistical Note: International trade statistics are available for most of the world classified by commodities, according to the Harmonized System (HS). This categorization was used for the 2010 report, although the 2008 and 2003 report considers the NAICS classification of industries. Full annual NAICS data was not available at the time of the report for the year 2010. Instead, the Harmonized Code chapters were considered. The Compounded Annual Growth Rate (CAGR) is used to illustrate compounded annual growth using the starting and ending values, dampening the effect of oscillations in growth over time.
CAGR = (FV/PV)^1/n – 1, where FV=Future Value, PV=Present Value, and n=Number of Years.
Canada’s specialized industries are largely based on natural resources, including petroleum and wood. As a group, these Canadian specialized industries account for an average of 29% of Canadian exports to Florida and only 5% of Florida’s exports to Canada over the past four years.
Integrated Industries
| Canada Exports | Florida Exports | Florida/Canada | |
|---|---|---|---|
| Base Metals and Articles of Base Metals | $203 | $158 | 74% |
| Articles of Stone, Plaster, Cement, Glass, etc. | $19 | $14 | 78% |
| Machinery, Mechanical Appliances, Electrical Equipment | $790 | $735 | 97% |
| Transportation Equipment (Vehicles, Vessels and Aircraft) | $253 | $362 | 159% |
| Total | $1,266 | $1,269 | |
| Share of all Florida-Canada Exports | 38% | 43% |
Source: Primary data from Statistics Canada, Harmonized Code Sections
Four industries have export/import ratios of between 74% and 160%, pointing to their integrated natures, although they are weighted towards the Florida export side. They range from high-tech to construction-related industries and have accounted for 38% of Canada’s exports and 43% of Florida’s exports on average annually since 2007. Examples include the aerospace industry, where Florida parts largely supply Canadian aircraft manufacturers, which in turn export the finished aircraft back to the state. Canada is a net importer of motor vehicle parts and a net exporter of vehicles, most of which are exported through intra-corporate movements between Ontario and Quebec and bordering states. These four integrated industries are where there is most potential for further expansion of two-way trade and where mutual interest is being expressed between Canadian and Floridian business, including participation in trade missions. Overall, the integrated industries average $2.5 billion in exports and account for about 40% of two-way trade.
Floridian Specialized Exporters
| Canada Exports | Florida Exports | Florida/Canada | |
|---|---|---|---|
| Vegetable Products | $140 | $382 | 276% |
| Medical and Precision Equipment and Instrumentation | $85 | $230 | 276% |
| Chemical and Allied Products | $203 | $346 | 176% |
| Processed Foods and Beverages | $155 | $260 | 168% |
| Total | 955,753 | 176,481 | |
| Share of all Florida-Canada Exports | 30% | 5% |
Source: Primary data from Statistics Canada, Harmonized Code Sections
Specialized Florida industries are based either on natural resources, as is the case with Vegetable Products and Processed Foods, or technological specialization evidenced by Medical and Precision Instrumentation and Equipment. As a group, these industries account for 42% ($1.2bn) of Florida’s exports to Canada and 17% of Canada’s exports to Florida.
Florida's Exports to Canada
| Products | $ millions | % of Total | CAGR 2007-2010 |
|---|---|---|---|
| Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof | $220 | 7.2% | -4% |
| Preparations of vegetables, fruit, nuts or other parts of plants | $194 | 6.4% | -4% |
| Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof | $187 | 6.1% | -3% |
| Pharmaceutical products | $175 | 5.7% | 39% |
| Edible vegetables and certain roots and tubers | $147 | 4.8% | -9% |
| Fertilizers | $113 | 3.7% | -1% |
| Edible fruit and nuts; peel of citrus fruit or melons | $95 | 3.1% | 1% |
| Plastics and articles thereof | $84 | 2.7% | 6% |
| Ships, boats and floating structures | $79 | 2.6% | -5% |
| Aircraft, spacecraft, and parts thereof | $74 | 2.4% | -12% |
| Subtotal | $1,367 | 44.8% | |
| Total All Product Categories | $3,051 | 100.0% |
Source: based on primary Statistics Canada Florida import data by Harmonized Code Sections
Medical Precision Equipment and Instrumentation
| Orthopaedic or fracture appliances | 9.1 |
|---|---|
| Aeronautical or space navigation instrumentation | 19.9 |
| Contact lenses | 21.6 |
| Optical devices, appliances and instruments | 22.2 |
| Medical & veterinary equipment | 28.7 |
Source: Statistics Canada
Instruments and appliances used in medical or veterinary sciences are the leading sub-sector with 13% of the total product group, totaling $28.7 million in 2010. This well-established category has a CAGR of 3% since 2007, and boasted 15% growth in 2010.
Optical devices, appliances and instruments, comprising 10% of exports, enjoy one of the highest CAGRs at 14%. Florida has attracted over the years considerable investment from medical equipment manufacturers thanks to its favorable tax laws and large healthcare market. Florida is home to major medical device leaders including Baxter International and Boston Scientific both of which export to and have operations in Canada.
Processed Vegetables, Fruit, Nut & Plant Products
| Pineapple juice | 4 |
|---|---|
| Grapefruit juice | 4 |
| Mixed juices | 13 |
| Orange juice (other) | 15.4 |
| Orange juice (unfrozen) | 146 |
Source: Statistics Canada
Unfrozen orange juice continues to lead not only Processed Food Products with over a 75% share of the industry’s exports to Canada, but at $146 million it is also among the single largest product categories for the state. When other fruit juices are included, juices make up 95% of the product category.
Tropicana Products Inc. (TPI) manufacturing operations in Florida produce approximately 85% of the worldwide supply of Tropicana Pure Premium products. TPI operates regional distribution centers serving customers in Canada and the US.
Vehicles & Parts
| Special purpose vehicles | 14 |
|---|---|
| Automobiles (>1,500 cc) | 16 |
| Fire fighting vehicles | 24 |
| Automobiles (>3,000 cc) | 56 |
Source: Statistics Canada
Automobile categories together comprised 38% of the category sales, totaling $71 million, despite a sharp decline in 2009. The larger size automobile fell from $66 million in 2008 to $36 million in 2009, and rebounded to $56 million in 2010.
Fire fighting vehicles constituted $24 million in exports and other special purpose motor vehicles, with the fastest CAGR at 11%, contributed an additional $14 million.
Pharmaceutical Products
| Dressings and other articles having an adhesive layer | 2.6 |
|---|---|
| Vitamins and derivatives | 3.3 |
| Packaged medicines | 46 |
| Antisera/ blood fractions | 117 |
Source: Statistics Canada
The Pharmaceutical Product category is led by the products within “Antisera and other blood fractions” with a 67% total share. This segment boats a CAGR of 157%, jumping from only $7 million in 2007 to $117 million in 2010.
Packaged medications are a $46 million export industry and rebounded sharply after falling to $28 million in 2008.
On a smaller scale, vitamins and bandages are also prominent in the category.
Vegetables and Roots
| Cabbage | 5.4 |
|---|---|
| Celery | 5.48 |
| Potatoes | 8 |
| Beans | 15 |
| Vegetables NOSI | 21 |
| Peppers | 26 |
| Tomatoes | 54 |
Source: Statistics Canada
Tomatoes lead the Vegetable and Root category at $54 million and 36% of the total; however, they have declined steadily since 2008 and have a -13% CAGR since 2007. Peppers comprise 18% of the category at $ 26 million, but have fallen each year since 2007.
Products that share a more positive CAGR include celery and cabbages, each with about $ 5.4 million in exports.
Improved logistics links between Florida and Central and Eastern Canada has facilitated fresh produce exports over the last 10 years. Tropical Shipping is a Floridian company with four offices in Canada, moving approximately 25,000 containers between Florida and Canada per year.
Other Leading Industries
The five leading industries discussed in the previous sections account for more than $923 million in sales to Canada and together they account for about 30% of Florida’s exports to Canada, indicating a high level of trade diversification.
The Fertilizer industry is close behind with $113 million in exports to Canada, led by phosphate-based products, down from a peak in 2008 at $160 million. Other product categories of note come from Florida’s more specialized industries -- marine craft and aircraft. They comprise 2.6% and 2.4% of total imports respectively, but have suffered a decline during the economic crisis.
Canadian Exports to Florida
| Products | $ millions | % of Total | CAGR 2007-2010 |
|---|---|---|---|
| Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes | $651 | 21.1% | 11% |
| Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, illuminated signs, illuminated name-plates; prefabricated buildings | $145 | 4.7% | -18% |
| Plastics and articles thereof | $131 | 4.3% | -10% |
| Articles of iron or steel | $112 | 3.6% | -3% |
| Paper and paperboard; articles of paper pulp, of paper or of paperboard | $102 | 3.3% | -11% |
| Wood and articles of wood; wood charcoal | $98 | 3.1% | -22% |
| Salt; sulphur; earths and stone; plastering materials, lime and cement | $97 | 3.1% | 17% |
| Aircraft, spacecraft, and parts thereof | $93 | 3.0% | -22% |
| Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof | $82 | 2.7% | 7% |
| Preparations of cereals, flour, starch or milk; pastry cooks' products | $75 | 2.4% | 13% |
| Subtotal | $1,586 | 51.5% | |
| Total | $3,082 | 100.0% |
Source: based on primary Statistics Canada data, Harmonized Code Sections
About three-quarters of Canadian exports to Florida come from the top ten product categories shown in the table below. Energy exports have jumped to center stage, comprising 21.1% of exports in 2010. The big star in this category is Heavy Petroleum Oil Preparations, equivalent to 95% of the total product category, which grew rapidly in the three years leading up to 2007 due to a combination of higher pricing and higher volumes. Since then, it has shown a CAGR of 11% and reached $620 million. Far behind are furniture and plastics with 4-5% of total exports to Florida, both on the decline during the economic crisis.
Furniture Products
| Metal furniture | 13.5 |
|---|---|
| Wooden office furniture | 14 |
| Furniture parts | 15 |
| Wooden furniture - other | 18 |
| Wooden kitchen furniture | 18 |
Source: Statistics Canada
This category of exports suffered dramatically during the financial crisis, with a CAGR of -18% from a combination of the declining house building market in Florida and competition from lower cost furniture producers in Asia. The hardest hit categories were wooden kitchen furniture (-33%) and other wooden furniture (-29%). Metal furniture was the most resilient, according to its CAGR of -7%.
Shermag, Inc. manufactures wooden household furniture for export to Florida and maintains a sales force in Florida.
Plastic Products
| Packing or conveyance | 7.5 |
|---|---|
| Polymer of ethane | 8 |
| Sacks and bags | 13 |
| Film and sheet | 14 |
| Articles of plastic nosi | 15 |
Source: Statistics Canada
The Plastics product category totals $ 132 million, but it has been on the decline since 2007.
The largest group of products in this diverse segment is unspecified plastic articles, comprising 11% of the total, followed by film and sheets of plastic (10%) and plastic sacks and bags (10%). Packaging plastics, accounting for 6% of the category, have been the most resilient in the economic downturn.
Iron & Steel Products
| Articles of iron or steel nosi | 4.3 |
|---|---|
| Doors, windows, frames and thresholds | 7.4 |
| Structures and parts of structures | 36 |
| Towers and lattice masts | 49 |
Source: Statistics Canada
Articles of Iron and Steel have been on the decline as an export category, but rebounded in 2010, growing from $68 to $112 million in one year.
The stand-out sub-segment in this category encompasses towers and lattice masts, which total $49 million in exports and 43% of the total product group. Another large category is termed “structures or parts of structures”, typically used in construction, accounting for 32% of the category. 2010 exports stand at about half their volume in 2007 due largely to the slowdown in construction in Florida.
Paper Products
| Cartons boxes and cases | 4 |
|---|---|
| Toilet paper | 12 |
| Paper, fine | 18 |
| Newsprint | 19 |
| Paper, multi-ply, in rolls or sheets | 23 |
Source: Statistics Canada
Although Paper Products as a whole was hit by the downturn, the largest category – multi-ply papers in rolls or sheets – experienced a CAGR of 129% since 2007 to reach $23 million in exports to Florida. Toilet paper, accounting for 12% of the category, expanded as well with a CAGR of 69% to total $12 million in exports in 2010.
Newsprint continues to decline, with a CAGR of -33%, as the embattled newspaper industry across the US shrinks circulation.Provincial Concentration of Direct Trade
Two-way trade between Canada and Florida tends to follow the North-South corridor. It is especially concentrated in Ontario and Quebec, which are home to 62% of the country’s population and an even greater concentration of the Canadian market when purchasing power is taken into account. The two provinces are responsible for 68.9% of Canada’s imports from Florida and 6.1.% of exports to Florida. This shows greater trade diversification among the provinces when compared to 2007. These data can be misleading, however, because a considerable portion of Florida’s exports to Canada are delivered to national distributors located in the two largest provinces and then re-distributed from there. This is especially true for merchandise traveling to and from the Maritime Provinces. The majority of exports from Canada also travel through the Montreal and Toronto hubs.
| % of population | % of imports from FL | % of exports from FL | |
|---|---|---|---|
| Ontario | 39% | 50.3% | 37.0% |
| Quebec | 23% | 18.6% | 24.1% |
| Ontario & Quebec | 62% | 68.9% | 61.1% |
| British Columbia | 13% | 13.7% | 5.3% |
| Alberta | 11% | 7.1% | 5.8% |
| Manitoba | 4% | 4.5% | 2.3% |
| Saskatchewan | 3% | 3.0% | 2.4% |
| West | 30% | 28.3% | 15.8% |
| Nova Scotia | 3% | 0.4% | 2.4% |
| New Brunswick | 2% | 2.3% | 10.0% |
| Newfoundland | 2% | 0.0% | 10.3% |
| Prince Edward Island | <1% | 0.0% | 0.5% |
| East | 7% | 2.7% | 23.1% |
| Territories | <1% | 2.7% | 0.0% |
| Total | 100.0% | 100.0% | 100.0% |
Transshipment
According to the Origin of Movement series tracked by the Foreign Trade Division, 78% of Florida exports in 2009 was manufactured or significantly transformed in the state. The close integration of many Canadian and Floridian companies means that considerable Canadian value-added is incorporated into Florida-origin exports. In addition, a significant proportion of Canadian exports to Latin America and the Caribbean are trans-shipped in bond through Florida ports. Unfortunately, there is no current data available describing this traffic.
Canada and Florida are also common stopovers for merchandise trade arriving from or on their way to a third trading partner. Until 1996, the Bureau of Transportation Statistics published statistics for these “transshipments,” which represented 16% of all US shipments to Canada and 6% of all Canadian shipments to the US. These data, however, exclude “in transit” shipments. These are goods declared by the shipper as moving through the United States to or from Canada and a third country and they are not included in the official U.S. international merchandise trade statistics.
Industry observers believe that a significant amount of Canadian traffic bound for Latin America and the Caribbean travels through the “Miami Gateway” for the same reasons that US exporters favor Miami over numerous other US ports that are closer to their operations. The Port of Miami is also an important transshipment point for European exports to Latin America and the Caribbean. Florida has a highly-developed shipping infrastructure, including many freight forwarders and consolidators who specialize in Latin America or the Caribbean. The efficiency that this offers often outweighs the cost of longer truck shipments relative to other ports.
The development of an integrated Canadian-US trucking industry under the FTA and the NAFTA is also believed to have increased the popularity of shipping from Canada through Miami and other Florida ports. Many Canadian-based freight consolidators offer shipments to Latin America and the Caribbean, following these routes. This trend is expected to continue, especially as smaller Canadian companies, which need LTL (Less Than Load) consolidation services, expand their exports to the region. Other contributing factors include new multi-mode transportation technologies and more sophisticated end-to-end logistics services that make management of the transshipment and consolidation processes more effective.
Impact on Florida's Economy
| Total direct and indirect employment | 404,750 |
|---|---|
| Total Tax Revenue | $77 million |
An estimated 404,750 Floridians derive employment as a result of two-way trade between the state and Canada, similar to levels last measured by US authorities in 2007.
Companies required to pay taxes in Florida must pay a 5.5% flat tax on profits from exports that can be recorded as corporate income. According to industry experts, profit margins on exports average 20%.
Investment
| Country | $ million | % of total |
|---|---|---|
| Japan | 4,159 | 12% |
| Germany | 4,128 | 12% |
| United Kingdom | 3,877 | 12% |
| Latin America (excl.Mex.) | 3,790 | 11% |
| Australia | 3,561 | 11% |
| Canada | 3,358 | 10% |
| Middle East | 1,712 | 5% |
| France | 1,531 | 5% |
| Netherlands | 1,223 | 4% |
| Switzerland | 1,195 | 4% |
| Italy | 528 | 2% |
| Other Europe | 3,770 | 11% |
| Total All Countries | 33,647 | 100% |
Source: Enterprise Florida with primary data from the US Bureau of Economic Analysis
| 2002 | 4.81 |
|---|---|
| 2003 | 5.08 |
| 2004 | 5.61 |
| 2005 | 2.63 |
| 2006 | 2.99 |
| 2007 | 3.36 |
Source: Bureau of Economics
Statistical Note: At the state level, the inflow of foreign direct investment (FDI) is measured in terms of the toal value of holdings by foreign affiliated companies, or FDI stock. Foreign investment statistics for the US are published by the Bureau of Economic Analysis (BEA) based on an annual survey of foreign affiliates. Investments are attributed to countries based on “Ultimate Beneficial Ownership,” and exclude depository institutions. The BEA defines a “foreign affiliate” as a US company with 10% or more of its voting securities held by foreigners. Most of the statistics presented in this section are for “majority-owned foreign affiliates”, with more than 50% of their voting securities owned by foreigners. All of this data excludes foreign investment in Florida non-commercial real estate.
Canada is a leading foreign investor in Florida, ranking fifth in 2007 after Japan, Germany, the United Kingdom and Australia. Foreign investment in Florida businesses fluctuates considerably from year to year, partly because assets shift from state to state or from country to country in the statistics as a result of a complex set of the Bureau of Economic Analysis (BEA) rules about attribution of “ultimate beneficial ownership” as well as the states to which multi-state businesses are allocated.
In 2007 (the latest year for which data is available), majority-owned non-bank affiliates of Canadian companies based in Florida owned FDI stock in Florida in the amount of $3.358 billion. Canada represented about 10% of the assets of all foreign majority-owned affiliates in the state. As distant from the Canadian border as Florida is positioned, the state accounted for 2.2% of the total value of property, plant and equipment of Canadian majority-owned non-bank affiliates in the US.
The driving forces behind this expanding investment are the subject of some debate among experts. While a number of studies have found little relationship between free trade agreements and investment in general, none of these studies have directly focused on the Canada-Florida relationship. Many observers see an indirect relationship whereby expanding trade under the FTA and the NAFTA has led to increased linkages between Canadian and Floridian firms, ultimately creating the conditions for increased investment. While the increase in Canadian investment in Florida since the advent of the FTA is clear, the underlying causes cannot be statistically demonstrated.
Employment
Some 300+ majority-owned affiliates of Canadian companies in Florida employed approximately 24,300 people across 1,100 places of work in 2007 (the most recent data available), ranking second after the United Kingdom. This number exceeds the estimated number of employees in all majority-owned Latin American affiliates combined. These statistics include only people directly employed by Canadian affiliates. The total employment impact depends on multiplier effects and cannot be estimated accurately because data for employment by affiliates by industry is not available at the state level. A rough estimate, assuming a multiplier of 1.4, (similar to the tourism industry) implies that majority-owned Canadian affiliates maintain employment for about 34,020 Floridians.
Geographic Clusters
| Others | 11% |
|---|---|
| Southwest | 7% |
| East Central | 21% |
| Tampa Bay | 22% |
| Southeast | 40% |
Source: Enterprise Florida
Based on a database of about 275 Canadian companies in Florida produced by Enterprise Florida, Canadian direct investment has been concentrated in the Southeast, Tampa Bay, and East Central regions of the state.
An estimated 40% of Canadian affiliates in Florida are located in the Southeast, which includes South Florida (Miami-Dade, Broward, and Palm Beach Counties) and the Treasure Coast (Martin, St. Lucie and Indian River Counties). According to a WorldCity study published in January, 2008, South Florida is home to 1,200 multinational companies. Of the Canadian multinational subsidiaries in South Florida in their database, 41% are their company’s Regional Headquarters for Latin America and 30% are the US/Americas Headquarters. Their combined revenue is over $1 billion.
The Tampa Bay region, encompassing the Tampa-St. Petersburg-Clearwater and Sarasota-Bradenton metropolitan areas, is home to about 22% of Canadian companies in Florida. The East Central region, home to the Orlando-Kississimmee and Daytona MSAs, accounts for another 21%.
Investment Clusters
| Other | 9% |
|---|---|
| Biomedical & Pharmaceutical | 1% |
| Aviation/Aerospace/Defense | 1% |
| Real Estate | 2% |
| Tourism/Hospitality | 3% |
| Media & Telecommunications | 5% |
| Engineering & Construction | 5% |
| Business Services | 6% |
| Industrial Materials & Components | 6% |
| Information Technology | 7% |
| Consumer Products | 17% |
| Financial Services | 37% |
Source: Kroll Analysis, Enterprise Florida
One of the impacts of free trade agreements is the expansion of industrial clusters, where linkages among firms within the same industry increase overall productivity and promote innovation. There are no official statistics to demonstrate the industrial allocation of Canadian investment at the state level. However, Canadian companies in Florida are grouped into sector categories by Enterprise Florida.
Financial Services leading a new investment wave
Canada’s banking system, ranked the worlds soundest by the World Economic Forum each year since the start of the 2008 financial crisis, has gradually been acquiring US banking assets through acquisitions. TD Bank now has more branches in the US than in Canada. In 2010, TD Bank purchased three FDIC (Federal Deposit Insurance Corporation) controlled Florida banks: Riverside National Bank of Florida, First Federal Bank of North Florida and American First Bank. The three banks lift TD’s Florida banking network to over 100 branches and add over $3.8bn in assets to the bank’s balance sheet.
RBC Bank expanded its network across S.E. USA by purchasing three US banks operated by the Alabama National Bank holding company, specifically: Alabama Exchange Bank (Tuskegee, Ala.), First American Bank (Birmingham, Ala.) and First Gulf Bank (Pensacola, Fla.). RBC now has close to 100 branches and over 600 employees in Florida.
In 2009, Scotiabank launched in Miami a Private Client Group Center to support their private banking clients across Latin America and the Caribbean. The bank chose Miami because it is the hub through which many of its Latin American High Net Worth clients travel en route to a 3rd market and therefore serves as a convenient travel point for meeting clients.
High-Tech’s new arrivals
Some of Canada’s best known high tech companies are recent new investors in Florida. Convergia is a world-class provider of voice, data, and internet services recently built its US headquarters in Miami, FL. Convergia supplies over 500,000 customers worldwide offering a wide range of telecom services, including local, long distance, cellular services, travel calling cards, high speed internet access, audio and web conferencing. Convergia also drives its data, voice and internet traffic through the Network Access Point (NAP) of the Americas located in downtown Miami.
High-tech aerospace simulation giant CAE (USA), a key player in the Florida aerospace sector, employs over 450 Floridians in its Tampa headquarters. CAE is an active player in Florida’s “high tech corridor”, spanning 23 counties along Interstate-4 in the middle of the state, and attracting some of the largest global IT firms in the world.
Florida’s other high-tech area, the “Internet Coast,” stretches from Miami to Palm Beach, positioning South Florida as a “global science and technology hub.” Contributing to this hub is BlackBerry maker Research in Motion (RIM)’s Florida R&D center that employs approximately 500 people at an estimated average annual remuneration of over $84,000.
OpenText, one of the world’s leading content management software companies, purchased in 2009 a US rival, Vignette, for $310M, including their Florida operations. Among other industries that it serves, Open Text is best known for saving the health industry millions of dollars each year in redundant paperwork by digitizing and managing content for hospitals.
Retail Expansion
Canadian retail chains find Florida a captivating market for their expansion. The nearly three million annual Canadian visitors come to Florida with a well-developed loyalty to homegrown retail brands. This helped convince Montreal’s Aldo Group, shoe and accessories retailers, to open several stores in Florida starting with their first at Sunset Place in South Miami in 2001.
Vancouver’s Lululemon opened its first retail stores in Florida in 2007, with a store in the Aventura Mall and showrooms in Orlando, Naples, and Miami. Lululemon, with almost a cult following among Canadian women, sells athletic clothes and accessories, and offers healthy lifestyle classes. Aventura Mall is a favorite shopping destination for visiting Latin American tourists who save 30-60% in US stores versus retail options at home.
Circle K, the Florida based convenience store chain with over 2,400 stores across the US, is owned by Alimentation Couche-Tard of Laval, Quebec. In Florida, the retailer employs an estimated 3,005 Floridians.
South Florida - the Geteway Economy
Forty percent of US exports to Latin America (excluding Mexico) and the Caribbean pass through South Florida. Several Canadian companies have built their Latin American strategies around a South Florida hub. Apple Express, a Canadian logistics firm, specializes in the transport of some of the main Florida export industries to Canada – large aircraft parts, high-tech, and motion picture equipment.
SNC Lavalin recently opened its Latin American headquarters in Miami. The new office will oversee a region undergoing one the world’s most ambitious infrastructure modernization investment phases with well over $1 trillion USD earmarked across Latin America.
Entertaining the World
Florida attracts over 90 million visitors per year and is forecast to bring in over 10 million foreign visitors in 2011. Many international visitors start their Florida visit in Orlando, home to Disney World and many other theme parks. Canada’s Cirque du Soleil has established itself as a downtown Disney landmark and employs over 200 people in Florida. Ripley’s Believe it or Not!, owned by Canada’s 3rd largest private company, the Jim Pattison Group, has attractions in Key West, Orlando, Panama City Beach, and St-Augustine. Pattison also owns two other less well known Florida companies.
Residential Real Estate
| % of Foreign purchases | % of Canadian purchases | |
|---|---|---|
| Naples-Marco Island | 5% | 9% |
| Tampa-St. Petersburg | 10% | 9% |
| Cape Coral-Ft. Myers | 9% | 9% |
| Miami-Ft. Lauderdale | 17% | 9% |
| Orlando-Kissimmee | 19% | 14% |
| Bradenton-Sarasota-Venice | 13% | 18% |
| Other | 27% | 32% |
Source: National Association of Realtors
As the housing market continues in a slump, Canadians have been acquiring Florida real estate in unprecedented numbers. They represented about 8% of existing home purchases for the year, according to a survey by the National Association of Realtors (NAR) conducted in 2010. This places Canada well ahead of any other country of origin for those purchasing Florida real estate from abroad. Applying the $ 150,000 median value of Canadian home purchases in Florida reported by NAR for 2010, the argument could be made that over $2.1 billion in residential Florida real estate was purchased by Canadians in 2010.
Estimates of the total number of Canadians who own residential real estate in Florida range as high as 500,000, which include timeshares of 30 days or less. If members of the Canadian Snowbird Association are representative of all snowbirds, about 62% Canadian snowbirds in Florida own a home there. Using the median value of Canadian home purchases in 2009 as a proxy for the average value of Canadian properties in Florida, and assuming that most homes are owned by couples, the total value of Canadian residential property could approach $50 billion.
Snapshots of the Canadian home buying profile in Florida are available from surveys of realtors serving international clients, conducted by the Florida Association of Realtors in 2004, 2006 and 2010. These surveys capture Canadian buying activity during the peak of the housing boom and during its decline, revealing that Canadians are more loyal to the Florida real estate market than other investors. Canadians buyers accounted for an impressive 36% of foreign real estate purchases in Florida in 2010 compared to only 9% in 2007 and 7% in 2004. In comparison, all Latin American countries combined represented only 16% of buyers in 2010.
Fortunately for Canadians, they are much less burdened by the mortgage crisis than their American and European counterparts. In 2010, 89% of Canadians paid for their Florida real estate purchases in all cash, compared to only 8% of all home purchases in the state. One reason for this trend might be the low median price of homes purchased by Canadians, valuing $150,000 in 2010, which was lower than the average price paid by foreign buyers as a whole - $180,000. Canadian home buyers prefer condominiums and co-ops, which together account for 53% of their property purchases in Florida in 2010. Canadians are the most likely of all foreign buyers to use their property as a vacation home (59%), and much less likely to rent the property (18%) or some combination of both (19%). Almost half (47%) of Canadian buyers reported planning to personally use the newly purchased property for 3 to 6 months each year. An additional 5% expected to use it more than 6 months.
The location of recent home purchases by Canadians has changed with the aging baby boomers and growing retirement communities in the less expensive areas of the state. In 2010, the Bradenton-Sarasota-Venice area drew the most buyers, representing 18% of total home purchases. The Orlando-Kissimmee area drew 14% of buyers, followed by Cape Coral-Ft. Myers with 12%. In contrast to recent years, the Miami-Fort Lauderdale area fell from 24% of purchases in 2006 to only 9% of purchases in 2010. The Naples-Marco Island and Tampa-St. Petersburg-Clearwater regions also represented 9% of purchases each.
Tourism
| Year | Overseas | Canadian | Total |
|---|---|---|---|
| 1999 | 5.8 | 1.7 | 58.9 |
| 2000 | 6 | 2 | 72.8 |
| 2001 | 5.3 | 1.9 | 69.5 |
| 2002 | 4.4 | 1.6 | 73.9 |
| 2003 | 4.2 | 1.7 | 74.6 |
| 2004 | 4.4 | 1.9 | 79.7 |
| 2005 | 4.4 | 2 | 83.6 |
| 2006 | 4.1 | 2.1 | 83.9 |
| 2007 | 4.7 | 2.5 | 84.5 |
| 2008 | 5.2 | 2.9 | 84.2 |
| 2009 | 7 | 2.6 | 80.9 |
Source: Visit Florida
| Germany | 280 |
|---|---|
| Venezuela | 401 |
| Brazil | 712 |
| United Kingdom | 1,200 |
| Canada | 2,644 |
Source: Visit Florida, based on ITA Data
Statistical Note: All visitor statistics in this report refer to overnight visits to Florida, excluding same day visitors. These are mostly in-transit air travelers, typically changing flights in Miami en route to Latin America or the Caribbean. This number excludes passengers who remain in transit lounges and do not pass through US customs and immigration.
Florida’s warm winter climate is both alluring and accessible to Canadian tourists, who have long made Florida their favorite winter vacation destination. Canadians made a total of 2.64 million visits to the state staying at least one night during 2009, the last year for which annual data was available at the time of this report. This represents a slight decline over a peak of 2.87 million visits in 2008; however, preliminary figures from 2010 indicate a record-breaking year for Canadian tourism to Florida. In the first three quarters, the state registered 2.45 million Canadian tourists, which is a 4.2% increase over the same period in the peak year of 2008. Following this trend, over 3 million visits to Florida should have been made by end of 2010.
In 2009, Canadian visitors stayed 47.5 million nights and transferred $2.7 billion into Florida’s economy. In the first three quarters of 2010, Canadians had already spent 46.1 million nights and $2.9 billion in the State of Florida. The importance of this contribution as the state slowly pulls out of the economic crisis cannot be understated.
Although overseas international visitors hit a record-breaking 9.6 million in 2009, Canada remains Florida’s most important international tourism market and accounts for about 27% total international visitors.
Canadian visits to the state have been increasing at 9.3% on average annually since 2002 and outpaced growth for overseas visitors until 2008. Due to a weaker US dollar, overseas visitor rates to Florida rose rapidly with the onset of the economic crisis to surpass their pre-September 11th highs, rising from 4.7 million in 2007 to 7.0 million in 2009.
When compared with other top countries of origin, Canada far outpaces any other nationality. The United Kingdom, representing the second largest tourist contingent for Florida, was responsible for 1.2 million visitors, amounting to less than half of registered Canadian visits. Even combining the next four largest markets -- the United Kingdom, Brazil, Venezuela, and Germany – does not equal Canadian visits for the year.
Canadian visitor traffic showed a 17-19% increase in the first three quarters of 2010 compared to the same quarters in 2009, reaching 2.45 million visits compared to only 2 million by the same time the previous year. The first three quarters of the year traditionally account for around 80% of total visits for the year. If current trends continue, Canadian visits to Florida should have totaled 3.1 million by year’s end.
Types of Canadian Travelers
| Other | 59 |
|---|---|
| Business | 190 |
| Visit Friends & Relatives | 287 |
| Leisure Vacation | 2,108 |
Source: Statistics Canada
Canadian visitor traffic showed a 17-19% increase in the first three quarters of 2010 compared to the same quarters in 2009, reaching 2.45 million visits compared to only 2 million by the same time the previous year. The first three quarters of the year traditionally account for around 80% of total visits for the year. If current trends continue, Canadian visits to Florida should have totaled 3.1 million by year’s end.
Canadian travelers fall into three principal groups based on the purpose of their trip and the visit duration:
- “Snowbirds,” who spend some or all of each winter in the South;
- Short-term leisure visitors who take 1 to 2 week vacations in Florida, primarily in the winter;
- Business visitors, who stay less than one week.
Snowbirds
| Under 20 | 389 |
|---|---|
| 20 - 44 | 559 |
| 45 - 54 | 487 |
| 55 -64 | 561 |
| 65 - 74 | 367 |
| 75 + | 135 |
| Cottage/Cabin | 1% |
|---|---|
| Camping | 3% |
| Friends or relatives | 19% |
| Other combination | 67% |
| Hotel/Motel | 32% |
Source: Statistics Canada
Statistical Note: The statistics cited in the tourism section of this whitepaper come from a variety of sources, but principally from two datasets: The Survey of International Travelers, published by the US Department of Commerce annually and Statistics Canada’s ongoing tracking of Canadian international travel. Although the statistical agencies of the two countries collaborate to improve data comparability, there are minor differences in their estimates because of varying statistical concepts and methods. Most data for Canada published by Florida’s tourism promotion agencies comes from Statistics Canada, but ITA data is used for comparisons between Canada and Florida’s other tourism markets.
Snowbirds are mainly retired or semi-retired people who live away from their northern homes during significant portions of each winter. In 2009, approximately 40% of Canadian visitors to Florida were over age 55. The largest visitor age group is 55-64, totaling 560,500 travelers in 2009.
The Canadian Snowbird Association defines snowbirds as those spending 31 nights or more in a southern destination. The Association estimates that 70% of Canadian travelers spending over one month in the sun-belt states choose Florida as their destination. The association estimates that there are over 500,000 Canadians that winter in Florida each year. Arizona is the most popular alternative and has the second highest average Canadian stay at 15 nights. Other states that are popular with Canadian snowbirds (in order of preference) are California, Texas and Hawaii, attracting a large proportion of their visitors from Western Canada. Historically, 58.7% of Canadian snowbirds spend 60 nights or more and 20% spend over 90 nights in the U.S.
Snowbirds are less likely to stay in hotels than other visitors, preferring their second or rented homes, or arriving in RVs. Most fall into the “Other” accommodations category. This category represented 67% of Canadian visitors in 2009, and also includes those that stayed in more than one type of category.
Additionally, snowbirds are also partly responsible for the volume and loyalty of many short-term visitors to the state, who see and/or stay with snowbirds while they are vacationing. About 19% of Canadian visitors, likely a combination of short-term and snowbird visitors, reported staying with friends or relatives while in Florida in 2009.
The spending patterns of these visitors are similar to resident Floridians, mainly routed through retail stores and local service providers. As a result, the money they inject into Florida is more broadly diffused than spending by shorter term visitors who concentrate their spending on hotels, meals, shopping and entertainment. However, the Canadian Snowbird Association reports that some snowbirds can often make large purchases while in Florida. Some fly down, purchase either a new or used car while in the state and drive back. Used cars last longer in Florida’s benign climate and the same models of new cars are generally 10-15% less expensive in Florida than in Canada.
Short-Term Leisure Visitors
In 2009, visitors staying one to two weeks in Florida accounted for 67% of visitors. Their spending patterns are much different from snowbirds, because they tend to stay in hotels and purchase more meals, spending considerably more per day. Of Canadian travelers in 2009, 32% reported staying exclusively in hotels or motels for the duration of the trip. They are also more likely than snowbirds to spend money on leisure attractions, travel with children and to visit Orlando. According to a survey in 2006, 35% of Canadian visitors to Florida reported visiting a theme park.
Short-term visitors make repeated trips to Florida largely because of the Canadian snowbirds. Nearly half of Canadian visitors in 2006 reported seeing a friend or relative while on vacation. These include snowbirds and the estimated 150,000 Canadians that are permanent Florida residents.
Business Travelers
Business visitors accounted for 7.2% of Canadian travelers to Florida in 2009, totaling 189,800. The majority (around 76%) of these visitors stay less than one week, and an additional 20% stay from one to two weeks. Business travelers stay in hotels and dine out, spending the most per night of any traveler.
Regional Tourism Markets in Canada
| Territories | 0.03% |
|---|---|
| Prince Edward Island | 0.31% |
| Saskatchewan | 1.12% |
| Manitoba | 1.81% |
| Newfoundland | 1.98% |
| New Brunswick | 2.32% |
| Nova Scotia | 2.75% |
| British Columbia | 3.16% |
| Alberta | 3.84% |
| Quebec | 19.87% |
| Ontario | 62.83% |
Source: Statistics Canada
Ontario and Quebec continue to send the most visitors to the Sunshine State. Together, these two provinces comprise 62% of Canada’s total population, but accounted for 83% of l Canadian visitors to Florida in 2009.
Alberta ranked third in number of visitors at 3.8 % of the total. British Columbia followed with a 3.2% share, but the Western province is underrepresented in Florida due to its distance and the closer proximity Southwestern sun destinations.
Seasonal Variations
| Q1 | 1,100 |
|---|---|
| Q2 | 636 |
| Q3 | 341 |
| Q4 | 567 |
Source: Statistics Canada
Canadian tourists are obviously drawn to Florida during the winter months to escape the cold weather, reflected in the visitor statistics every year. Of all Canadian visits in 2009, 42% took place in the first (and coldest) quarter of the year. Another 24% arrived in the second quarter, which includes family vacations taken at the start of the summer holidays. At the end of the summer and early fall, travel to Florida is at its lowest point – 13% of all visitors in 2009.
In the fourth quarter, visitor numbers are on the rise again as the temperature drops and accounted for 22% of visitors in 2009. This is largely due to snowbird arrivals at the onset of winter season. The holidays play a role in snowbird travel patterns. The tourist season begins after the Canadian Thanksgiving, but some choose to wait until just after the Christmas holidays to leave their families for Florida. Wealthier snowbirds arrive earlier to their winter homes with the option of flying back for the holiday season or for business concerns in the middle of their stay. Regardless of weather, Canadians generally return home in time for Easter and tax season.
Principal Destinations
| Key West | 0.2% |
|---|---|
| Panama City | 0.2% |
| Tallahassee | 0.3% |
| Daytona | 0.3% |
| Ft. Walton Beach | 0.3% |
| Pensacola | 0.5% |
| Sarasota/Bradenton | 0.7% |
| Jacksonville | 2% |
| West Palm Beach | 4% |
| Ft. Myers | 4% |
| Tampa / St. Petersburg | 13% |
| Miami | 23% |
| Ft. Lauderdale | 24% |
| Orlando | 28% |
Source: Statistics Canada
| Golfing | 19% |
|---|---|
| Bar or Night Club | 27% |
| Theme park | 35% |
| Visit friends/relatives | 48% |
| Outdoor activities/sports | 51% |
| Sightseeing | 57% |
| Shopping | 84% |
| Total | 100% |
Source: Statistics Canada
Canadian visitors do frequent tourist locations like Orlando, but they are less likely than South American and European visitors to visit Miami and more likely to visit parts of the state where Canadians reside, including Tampa, Ft. Lauderdale, Ft. Myers, West Palm Beach, and Jacksonville. Orlando is also the best destination airport to reach many snowbird communities in the Central region of the state, where there are many new and affordable developments and retirement communities.
The following graph shows the percent share of inbound Canadian passengers of the total inbound travel to these top Florida locations in 2006, the last year for which this data is available. The final air destination (last airport) is considered, not necessarily the final destination for the traveler. However, the choice of airport indicates the general geographic area to which they are traveling.
There are also regional preferences depending on the passenger’s origin (the first airport of the flight sequence). Flights originating in Toronto share the highest passenger traffic with final destinations Miami, Orlando, and Ft. Lauderdale (in that order), while Montreal’s ranking is Ft. Lauderdale, Miami, and then Orlando. Toronto flight traffic is more weighted to the West Coast of Florida than traffic from Montreal. The two cities have nearly equal flight traffic with Ft. Lauderdale, even though the number of passengers visiting Florida from Toronto is far greater. Both share Tampa/St. Petersburg as their fourth highest traffic location, but for Toronto it is two thirds the volume of the city ranked above it, while the Montreal volume drops steeply to one third. Ft. Myers ranks fifth for Toronto passengers, whereas West Palm Beach is the next destination for Montreal.
Orlando ranks as the top Florida destination for most other top cities of origin, including Ottawa, Vancouver, Calgary, Halifax, Edmonton, and Winnipeg (in order of volume). Again, the Quebecers prefer Ft. Lauderdale, coming in as the top destination for flights originating from Quebec City.
As the Canadian Loonie has strengthened in recent years against the dollar, there has been an increase in shopping by Canadian visitors to the US. In 2006, shopping was the most cited activity for Canadian visitors. Just over half of visitors reported participating in outdoor activities (including the beach) and 57% considered sightseeing a top priority. Theme parks, the main attraction for short-term visitors to the Orlando area, were frequented by 35% of visitors. The short-term and snowbird traveler alike enjoy golf, drawing 19% of visitors.
Canadian snowbirds have long been a mainstay of the Florida winter crowd. The Canadian Snowbird Association’s annual gathering in Lakeland, known as Snowbird Extravaganza, attracts over 30,000 attendees annually. The most prominent enclave of French-Canadian snowbirds is in Hollywood Beach, as evidenced by several local news publications and ATMs in French. Over the last ten years, Canadian snowbirds have shifted their preferences away from high real estate prices towards more affordable communities in Tampa-St. Petersburg, Sarasota, Naples, Panama City and along the coast between Daytona and Jacksonville. Although Orlando is popular with short-term visitors, snowbirds tend to nest closer to the coast.
Modes of Transportation
The majority of Canadian visitors to Florida have continued to travel by air after a brief decline following September 11th. Air travel accounted for 61% of Canadian visits to Florida in 2009, totaling 1,6 million. Travelers making the trip by car have consequently fallen from 38% of total visitors in 2004 to 34% of total visitors in 2007, but gross numbers are still rising. In 2009, 906,700 Canadian visited Florida by car, up from 865,000 in 2007.
Major air carriers such as American Airlines, Air Canada, West Jet and Air Transat offer regular direct service between top Florida destinations (Miami, Ft. Lauderdale, West Palm Beach, Orlando, Tampa, Ft. Myers and Sarasota) and Toronto and Montreal. In season, they offer approximately a combined total of 276 weekly direct flights between Florida and Canada. Direct flights are also available to Halifax and Ottawa during the snowbird season.
The Canada-US open skies agreement was further liberalized on March 12, 2006. Improvements included removing bilateral restrictions on pricing and allowing carriers from either side to carry passengers on routes beyond the country to a third nation. Canadian snowbirds are still lobbying for easier air travel to the U.S. with a higher security electronic passport that will be valid for 10 years instead of the current five. Some airlines are pushing for the U.S government to increase its pre-clearance capacity at Canadian airports so as to increase the flight capacity.
Visit Duration
| 1 night | 43 |
|---|---|
| 2 – 6 nights | 596 |
| 7 – 13 nights | 1136 |
| 14+ nights | 869 |
| Total | 2644 |
Source: Statistics Canada
Florida has, by far, the highest visit duration of any state. On average, Canadians spend over five times as many nights in Florida as in New York, which ranks first in total Canadian visits. In 2009, Canadians averaged 18 nights per visitor, over twice the US average for all states. This high average trip duration is weighed upwards significantly by Canadian snowbirds.
The most common length of stay in 2009 was between one and two weeks, accounting for 43% of total visits. Vacationers staying over two weeks, including snowbirds, accounted for 31% of Canadian travelers to Florida, totaling 869,000 person-visits. An additional 24% spent under a week in the state.
The Canadian Snowbird Association states that snowbirds wintering in the southern US stay an average of 4.7 months. The duration of stay for Canadian snowbirds in Florida is influenced by regulatory factors in both countries. The US Internal Revenue Service requires tax declarations (under the “Substantial Presence Test”) from Canadians who stay longer than allowed by a moving-average formula that allows 180 days in one year, but only about 120 days per year for snowbirds who visit every year. Individuals who have no US income can stay longer without paying US income taxes, but there is considerable reporting paperwork involved, a burden that serves as a disincentive to longer says.
The Canadian health care system also restricts the time that residents can spend outside the country. Public health coverage lapses entirely after six months in most provinces, and individuals who stay out longer must typically wait three months to re-qualify. All provinces provide only very basic out-of-country benefits that cover only a small proportion of the cost of US healthcare. For this reason most visitors buy private insurance. Many short-term visitors are automatically covered by standard supplementary insurance policies, but snowbirds generally buy special insurance.
Visitor Spending
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |
|---|---|---|---|---|---|---|---|
| Total Spending ($US millions) | 1403 | 1597 | 1924 | 2372 | 2812 | 3100 | 2700 |
| Avg. spending per person-visit ($US) | 840 | 836 | 944 | 1131 | 1133 | 1080 | 1000 |
Source: Statistics Canada
Canadian visitors spent $2.7 billion while in the state in 2009. Although representing a decline from a peak of $3.1 billion in 2008, this figure is nearly twice the amount spent in 2003. Total Canadian spending in the state registered a compounded annual growth rate (CAGR) of 11% from 2003 to 2009. Furthermore, 2010 spending is forecast to have leapt up to historical record levels of $3.5bn, or a 29% jump over 2009.
Economic Benefits to Florida
| Direct Employment | 43,000 |
|---|---|
| Total Employment | 62,780 |
| Direct Taxes | $195 million |
| Total Tax Impact | $700 million |
Florida is expected to have received over 90 million tourists in 2010, of which an estimated 77 million came from other US states and approximately 14-15 million visited from another country, including an estimated 3.1 million from Canada. The economic impact of Canadian tourists, with their mix of snowbirds, family and friend visitors and short term high spenders is slightly higher than US tourists (who stay less time) but lower than off-shore visitors (who shop conspicuously) Conservative estimates by the Florida Tax Watch study of the impact of Tourism, first published in 2006, estimate that total tourism in 2010 generated $103bn of the state’s economic GDP. The contribution born from Canadian tourists (home buying aside) in 2010 is estimated to be $4.45bn.
In 2010, the same TaxWatch study estimates total direct employment from the state’s number one industry to reach 1,000,000. Canadian tourism spend, by correlation, is therefore expected to directly employ over 43,000 Floridians. The spending and investment habits of those directly employed as a knock-on effect of creating indirect employment for other industries. Applying a multiplier of 1.46x, as recommended in the TaxWatch study, total direct and indirect employment created from Canadian tourism spending in 2010 is approximately 62,780 jobs in Florida.
In addition, Canadian visitors can be assumed to have contributed 4.3% of tourism-related tax revenues, proportional to their percentage of tourism revenues. Based upon comparable tax contribution analysis in 2007 by the TaxWatch report and the growth in Canadian tourist spending anticipated in 2010, total tax contribution by Canadian tourism grew more than 16% from 2007 to 2010.
Outlook
| 2004 | 0.77 |
|---|---|
| 2005 | 0.83 |
| 2006 | 0.88 |
| 2007 | 0.93 |
| 2008 | 0.93 |
| 2009 | 0.88 |
| 2010 | 0.97 |
Source: Federal Reserve
Canadians travelers to the United States have been reveling in the increasingly favorable exchange rate environment. The Loonie realized a 20% appreciation against the dollar from 2004 to 2007 and bounced again in 2010 by almost 15%. When this report went to print, high resource prices drove the Loonie above the value of the USD. Currency fluctuations have a dramatic impact on tourism spending. After a depressed 2009, Canadian tourism spending in 2010 is expected to have jumped 21% over the previous year and is forecast to grow another 6-8% in 2011 as the Canadian dollar makes further gains and the Ontario and Quebec economies return to full employment.
Looking longer term beyond the volatility of 2008-9, there is every reason to expect Canada to remain as Florida’s leading international tourism market. Canadians continue to purchase bargain priced Florida real-estate in record numbers assuming that Florida non-resident tax rates remain affordable, which will only further the commitment of Snowbirds to their yearly visits. Snowbird numbers will grow as baby-boomers begin a phase of record retiree levels.
Business tourism will continue to grow as well as tourism links breed small business initiatives that bridge Canadian and Florida enterprises. Miami’s unique role as the logistics and services gateway to the Americas is a feature that has been heavily promoted by Canadian trade authorities as an export platform for Canadian SMEs trying to exploit the high growth levels of Latin America.
Conclusion
In 2008 and 2009, the sub-prime mortgage driven financial crisis struck hard in Florida. As the state’s employment began to grow again in 2010, it was Florida’s international economic links to export markets, tourists and investors that led the way in job creation and will continue to lead the recovery. That fact illustrates the renewed importance of Florida’s links to Canada, its leading and most enduring overall international economic partner. When Florida’s housing market collapsed and transactions dwindled, Canadian buyers stepped in and were responsible for 8% of existing home sales in the state, valuing an estimated $2.1 billion. Bargain priced Florida real-estate was a well-publicized phenomenon around the world but it was Canadians who led the investment wave, responsible for 36% of all foreign buyer transactions.
Florida features largely and positively in the imaginations of sun-starved Canadians so it comes as little surprise how Canadian tourism spending in the state leapt a forecast 29% in 2010 thanks to a rebounding Canadian Loonie, recovering economies in Ontario and Quebec, heavily discounted hotel and flight deals and an historically cold winter. For Canadian winter travellers, Florida offers the most accessible and safe warm weather destination. As Canada (like the US) enters a 20 year phase of retiring baby-boomers, Florida will loom even larger in the travel patterns of Canadians.
Florida features largely and positively in the imaginations of sun-starved Canadians so it comes as little surprise how Canadian tourism spending in the state leapt a forecast 29% in 2010 thanks to a rebounding Canadian Loonie, recovering economies in Ontario and Quebec, heavily discounted hotel and flight deals and an historically cold winter. For Canadian winter travellers, Florida offers the most accessible and safe warm weather destination. As Canada (like the US) enters a 20 year phase of retiring baby-boomers, Florida will loom even larger in the travel patterns of Canadians.
Canadian investors are intrigued by the opportunities found in Florida. Canadian banks, heralded as the world’s most stable, have, like other foreign banks, been opportunistic buyers of distressed Florida bank assets, injecting billions into the state’s lending economy. Florida’s efforts to build and promote high tech sectors have created compelling investment opportunities, which several Canadian medical, communications, and aerospace industries have leveraged. Some of Canada’s best known companies, among them RIM (maker of the Blackberry), CAE, Convergia and OpenText have recently invested in Florida. Thanks in part to the promotional efforts of the Canadian Consulate General in Miami and a convincing study that they sponsored, many more Canadian businesses now understand the cost-effective role played by South Florida as a gateway to Latin America and the Caribbean. Scotiabank and SNC Lavalin both recently opened offices in South Florida to better manage their Latin American operations.
In total, Canadian commercial ties to Florida support an estimated 500,000 direct and indirect jobs in the state impacting 5.4% of all of Florida’s non-agricultural employment, more than any other international economic relationship held by Florida.
For additional information, please contact:
Consulate General of Canada in Miami
Political and Economic Relations and Public Affairs
200 S. Biscayne Blvd., Suite 1600
Miami, Florida 33131
Phone: 305-579-1600
Fax: 305:579-1631
Website: www.miami.gc.ca
E-Mail: miami-gr@international.gc.ca
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