Maintaining a prosperous economy is dependent on a number of factors, one of which includes utilizing the power of international trade and offshore investments to help drive economic growth and prosperity.
Canada has accomplished this reasonably well helping to establish itself as a formidable and reliable investment partner within the global markets. For example, according to Statistics Canada, more than 60 per cent of our annual Gross Domestic Product (GDP) is linked to trade where exports account for approximately 20 per cent of all Canadian jobs.
However, remaining competitive within international markets is challenging. New and innovative methods are constantly being developed to further boost Canada’s GDP and economic growth.
One way to aid in achieving this is to continue investing in dynamic and budding economies, such as emerging markets. This notion has been stressed in Canada’s new Global Markets Action Plan, which outlines the Canadian government’s efforts to focus on potential markets that offer the greatest return on investments for Canadian business.
Expanding further business ventures into Asia is key to this mandate and will further contribute to boosting Canada’s economy.
Expansion of Canada’s Lumber Exports to India
India continues to remain a strong prospective market for several of Canada’s exports, one of which includes Canadian lumber. As lumber sales have risen exponentially to China over the past several years, Canada’s Minister of Natural Resources Joe Oliver looks towards India in the hopes of achieving similar results.
“This is the fourth-largest consumer market in the world. For us to ignore that would make no sense and we’re not and we see enormous potential,” Minister Oliver told reporters via a conference call from Mumbai, where he was on a six-day trade venture in mid-January. He further explained that as India owns the world’s second fastest growing economy after China, Canadian lumber accounts for a very small percentage of this and he looks forward to changing this statistic.
Some of the roadblocks that Canada has experienced in exporting lumber to India are the general lack of using wood for construction there and the mistaken assumption that Canadian lumber is unable to withstand India’s intense heat and humidity.
A positive indicator, however, looking to help overcome these barriers is that disposable incomes are on the rise in India. This can potentially increase the demand for all types of Canadian exports including oil and gas, mining products, nuclear power and hopefully lumber.
Additional efforts aimed to boost lumber sales are exporting speciality products such as furniture and frames for both windows and doors. These serve as an alternative to traditional construction materials.
Furthermore, the federal government has invested an additional $600,000 to the Forest Innovation Investment India (FII India) fund to help stimulate lumber exports to India. The FII India is Canada’s forest products market development office and has already received $1.6 million from the federal government to support this trade venture.
BC Forging New Hydrogen & Fuel Cell Links to India
In another example of continued business expansion between Canada and Asia, British Columbia is set to work with India in forging new hydrogen and fuel cell links.
India Oil Corporation Limited (IOCL), one of world’s largest companies ranking 88th on Forbes Global 500 List in 2013, has aligned itself with Simon Fraser University (SFU) in an agreement to collaborate on hydrogen and fuel cell technology research.
Minister of International Trade Teresa Wat, who is also responsible for the Asia Pacific Strategy and Multiculturalism, recently commented on the partnership established between SFU and IOCL.
“We are deepening relationships in key sectors such as clean technology to increase trade and investment between British Columbia and India. Connecting world-leading institutions such as Simon Fraser University with a company such as Indian Oil will boost research and commercialization, attract new investment and create and protect jobs for British Columbians.”
BC, already a global leader in the clean technology and energy sectors, will focus on expanding its trade and investment network in India, thereby creating additional opportunities for future partnerships and innovative trade proposals to take place between the two nations.
“Indian Oil recognizes and values the global lead role which British Columbia is taking in the fuel cell developments and its commercialization. The collaboration with Simon Fraser University will help Indian Oil to get the benefit of their expertise in hydrogen and fuel cell research. The intended collaborative research will help further the development and optimization of fuel cell technology and cut down costs,” explained Dr. R. K. Malhotra, Director of Research and Development for IOCL.
Exports to India & China Exhibiting a Positive Trend
Positive indicators that Canada is succeeding in accordance to its Global Markets Action Plan, Stats Canada reported in February that BC’s international exports totalled $33.6 billion in 2013, an increase of 6.9 per cent from the previous year and Canadian exports in total increased by 3.5 per cent.
Furthermore, this report listed China and India as the two key markets in which BC recorded the most significant growth in from the previous year. In regards to China, BC’s next leading trading partner following the United States, BC observed a 13.6 per cent increase of exports which accounted for an additional $6.8 billion of revenue. Exports to India increased by an incredible 45.1 per cent which produced a further $466.6 million for the province.
More specifically, BC witnessed an increased export of wood products to all markets rising 25.8 per cent from the previous year and generating approximately $7.6 billion. Of this amount, increased exports to China accounted for nearly 35 per cent of this growth.
Diversifying and expanding markets, in addition to strategic investments made into the Asian trade infrastructure, were leading factors responsible for the observed increased economic prosperity for BC and Canada. As a result, BC has increased its network of international trade and investments thus creating opportunities and promoting the province as a stable and attractive destination for investments.
Conclusion
“Our number-one focus will remain the economy. Canada has led the global recovery, but the global recovery remains challenging and we know that we have to keep focused if we want to keep seeing results...We’re building on the safest and soundest financial system in the world. We’re making investments in skills, in infrastructure, in innovation,” explained Prime Minister Harper at a media roundtable, which included Darpan Magazine, on his recent trip to Vancouver in January. PM Harper discussed a number of key issues, including the Canadian economy and his government’s future mandate to maintain a stable, profitable economy in the coming years.
The discussion turned to expanding Canadian exports and finding innovative ways to stimulate our economy and looking beyond the United States to Asia. When asked about the decline in Canada’s import of oil and gas to the US, our chief client who accounts for 98 per cent of the energy exported, PM Harper responded by saying, “There are proposals, as you know, both to the West Coast and now to the East Coast, that would involve exporting outside of the Americas, outside of North America, and in particular to Asia.”
Leaving behind a larger footprint in Canada’s export market overseas will help ensure Canada’s long-term economic success and works in conjunction with expanding on Canada’s Global Market Action Plan. With a constantly changing landscape of the global marketplace, staying vigilant and innovative in securing investments overseas is paramount. With an emphasis placed in Asia and other emerging markets, these factors will contribute to a prosperous Canadian economy where all Canadians can benefit from the jobs and opportunities created at home.
Photo: Marketwired /Natural Resources Canada