France: Market overview 

27-05-2020 

Cross-trade and investment between Canada and France ( C$, billions) in 2020

Source: Statistics Canada

Key considerations about France

• Canada and France enjoy excellent bilateral relations based on shared values, a common history and language, as well as meaningful and strong political, economic and cultural ties.
• In 2020, France remained Canada's ninth-largest global partner in trade of goods, and third-largest among the 27 countries of the European Union. It is Canada's ninth-largest export market and eleventh-largest import partner (Source: Statistics Canada).
• In terms of trade of services, France is Canada's leading partner in the EU-27 and fifth in the world (Source: Statistics Canada).
• Within the EU-27, France is the seventh-largest destination for Canadian direct investment and the fourth-largest source of investment in Canada (Source: Statistics Canada).
• France is the second-largest economy in the European Union. Its GDP of €2.3 trillion (C$3.5 trillion) represents 17% of the total GDP of the EU-27 (Source: Eurostat).
• In 2020, due to the covid-19 pandemic, France’s GDP fell by 7.9% in volume (Source: Insee). Most observers are forecasting a sharp upturn as of 2021 (+6% according to the IMF), and a return to pre-crisis GDP levels sometime in 2022.
• France has implemented strong economic support measures combined with a stimulus plan of €100 billion ($C153 billion) by 2022 (France Relance). Some of the measures announced could open up new opportunities, particularly in clean technologies and life sciences.

Approximately 250 subsidiaries of Canadian companies have operations in France, covering a wide range of economic sectors such as aeronautics, ground transportation, industrial equipment, manufacturing, renewable and non-renewable energy production, agri-food, as well as health, engineering, telecommunications and digital technology, management consulting, and financial services.

Sectors 

Aerospace 

The French aerospace industry, which was performing very well until 2019, has been hit hard by the 2020 health and economic crisis. However, Canadian exports in this sector, which account for 23% of all Canadian exports to France, suffered a slight decline in 2020 (-9%) despite significant changes in their mix. While the sector will continue to undergo profound changes in the coming years, bilateral trade is expected to continue to offer opportunities in the manufacture of commercial and military aircraft, helicopters and satellites. In addition, industrial ties between Canada and France in the space sector are experiencing renewed growth thanks to several large-scale projects. 

Agriculture and processed food 

Agri-food (including fish and seafood) accounted for 23% of Canadian exports to France in 2020, up 51% from 2019. The sector suffered a relatively limited negative impact as a result of the health and economic crisis, with the exception of products for restaurants and catering. The strong increase recorded in 2020 was connected to canola exports, which rose sharply for both cyclical and structural reasons. Although the sector is heavily regulated (labelling and health regulations) and fraught with market access issues, CETA has opened up opportunities for commodities, ingredients (fruits, proteins), a number of processed foods, and fish and seafood products.

Education

France is the third-largest source of incoming international students in Canada after China and India, and the largest among European countries. France has seen a 1.6% increase in students enrolled in higher education (HE), and this increase is putting higher education institutions under strain. Brexit and the UK's exit from the Erasmus+ programme are also having significant repercussions on the French market. This is creating favourable conditions for Canada to reach the target set out in its International Education Strategy (IES).

Arts and cultural industries

France is Canada's fifth-largest export destination for cultural and creative industries. Canadian exports are growing steadily, reaching C$393 millions in 2018 (+43% since 2010), driven by the audiovisual, design, interactive media and publishing sub-sectors. This trend is set to accelerate with the implementation of the “Creative Export Canada” strategy. Although the covid-19 pandemic and the shutdown of parts of the cultural sector may, however, curb this momentum, they are also allowing new opportunities to emerge, in particular thanks to broader use of digital technology and e-commerce.

Consumer products

France enjoys strong purchasing power and presents significant potential for consumer goods, most notably high-end and eco-friendly products. In addition, CETA offers competitive advantages through tariff reductions. The sector is also supported by the growth of e-commerce, which reached the historic milestone of €100 billion ($C153 billion) in revenue, making France the second-largest market in Europe, and fifth-largest in the world.

Life sciences

Health expenditure accounts for over 11% of GDP. In response to the covid-19 crisis, the French government has announced substantial additional investments (+€6 billion or $C9.2 billion) in the healthcare system, which will add to the “natural” growth in healthcare expenditure linked in particular to the ageing of the population. The 2018-2022 national health system transformation plan aims to improve quality of care and to support the digital transformation of the country’s health system, opening up numerous opportunities for Canadian companies.

Information and communications technology (ICT)

In recent years, France has focused on digital transformation and the development of an ICT industry. The France Relance plan will be adding nearly €4 billion ($C6 billion) to this endeavour over 2020-2022. The “software and services” sub-sector, analytics, AI, cybersecurity and the telecom sector will be the main areas of interest. The high-value video-game industry also offers good potential for attracting investment, due to the presence in France of internationally renowned publishers, which are potential buyers of Canadian creations.

Clean technologies

Support for the ecological transition is one of the pillars of the France Relance plan, which will devote €30 billion (C$46 billion) by the end of 2022 to renewable energies, energy storage, hydrogen, “green” mobility and energy efficiency in buildings, among others. This is in addition to a major investment plan (2018-2022) worth €57 billion (C$87 billion) which addresses four priorities: accelerating the ecological transition; building a skilled society; ensuring competitiveness through innovation; and digitizing government. These initiatives offer excellent opportunities for business, cross-investment and technology partnerships.

Contact

For more information on trade and investment opportunities in France, contact your Trade Commissioner in Paris, France.