New funding to help Canadians diversify export markets
The Government of Canada announced $2 billion for measure to help the steel and aluminum industry fortify itself against tariffs imposed by the United States and part of that money will help companies diversify their export markets—a strategy that can benefit all industries.
As part of the package of the funding package announced in June 2018, the government will invest $50 million over five years specifically to help Canadian companies diversify their exports. The money is slated to help exporters take advantage of opportunities created by new trade agreements including Canada‑European Union (EU) Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP). The government has yet to announce how the new funding will be allocated.
The Canadian Trade Commissioner Service (TCS) currently supports several existing programs and initiatives which help companies diversify their client base by breaking into new international markets for their goods and services. One such program is CanExport, which provides financial assistance to Canadian small and medium‑sized enterprises (SMEs) looking to develop new export markets abroad.
“Don’t put all your eggs in one basket. Just like it’s not a good investment strategy to have all of your money in one place, diversifying your exports and having clients in different markets can be a way to decrease your risk and bring more stability and growth to your business,” says Elise Racicot a trade commissioner based in Ottawa, and manager of the CanExport program.
“It’s important to diversify your markets and this is a good time to do it, with the new free‑trade agreements recently negotiated by Canada that open new markets and level the playing field for Canadian companies,” she adds. “The CanExport program is one of the best tools available to help companies diversify.”
Launched in 2016 with $50 million over five years, the program helps SMEs take advantage of growth opportunities abroad by providing funding to help alleviate the financial risks associated with developing new markets. CanExport provides matching contributions to eligible SMEs ranging from $10,000 to a maximum of $50,000 per project, for a maximum of $99,999 contribution per recipient per year.
The CanExport funding is available to help with incremental expenses associated with breaking into new markets, and not for overhead costs reflected in the price of the good or service, Racicot explains. It can help mitigate risks by providing funding for expenses such as legal fees to review a contract with a foreign partner, translation services for required product information in foreign languages, helping with certification requirement costs, protection of intellectual property, or adjusting a web site to accept foreign currencies, for example.
When Canadian companies diversify their interests it helps strengthen Canada’s economy, Racicot says. To date, the CanExport program has provided financial support to more than one thousand SME-led market diversification projects, in a variety of industries, targeting more than 80 different markets around the world.
Besides the CanExport program, other initiatives which are in place that can help Canadian companies diversify their export markets include the Canada Tariff Finder, Going Global Innovation funding, Canadian Technology Accelerators, and other resources.
Read more about the Government of Canada announcement.
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