Canada: A Stable, Reliable, and Well-Connected Partner

Has the global COVID-19 pandemic forced us to rethink our supply chains?

What COVID-19 has done more than anything else is forced us to understand and take into account the risks inherent in our supply chain. Traditional enterprise risk management thinks in single-risk terms, but COVID-19 has made people think in terms of compound risks. What that has done is that has increased significantly the focus on risk and people’s attempt to minimize the risks they face.

Traditional enterprise risk management thinks in single-risk terms, but COVID-19 has made people think in terms of compound risks.

In terms of the risks themselves, we have for the last 20 years focused on driving cost out of the supply chain, whether that be by reducing the number of factories or remote or offshore sourcing, and that has led to single-point risk. I first became aware of this in 2011 when Japanese carmakers could not continue to manufacture cars because of floods that occurred in Thailand, causing electronic components to be unavailable during those floods. Interestingly, when we look at this, what we see coming forward is a thickening and a shortening of supply lines. If you think about moving from a single long pipe, in the future, supply chains will look more like a web than an individual pipe, and we will see more onshoring and nearshoring in Canada. Canada, being next to the largest consumer market in the world, is very well-positioned from a supply chain perspective.

How do you rate Canada in terms of the resilience and agility of its supply chains?

Canada is a much more measured place than many other places in the world and our reactions tend to be a bit more muted. Therefore, our initial moves may not be as grand or great. Having said that, access and supply to and from very large markets is an incredibly important part of the Canadian supply scene. As I look at the marketplace, I see Canada being very resilient. We are a bit unconfident, at least in our public dialogue, about our resilience and our ability to react, but largely, we are seeing Canada being very positive in terms of our ability to react. The market’s reaction to Canada is very positive and Canada’s ability to react and honour its commitments has been paramount and has been one of the true hallmarks of the Canadian economy through this crisis.

Which specific sectors should foreign investors look at in Canada?

We have focused on three in particular: advanced manufacturing, agri-business, and cleantech. All three will offer significant opportunities to both Canada and investors in Canada. Interestingly, Canada is uniquely positioned in each case. The attributes of the Canadian economy and our historical approach to certain sectors gives Canada an important advantage in advanced manufacturing, agri-business, and cleantech.

The attributes of the Canadian economy and our historical approach to certain sectors gives Canada an important advantage in advanced manufacturing, agri-business, and cleantech.

At the same time, we have a significant advantage in terms of our labour force and the training potential in our labour force. Now, could we be doing better? Absolutely, we could be doing better, but in terms of how we are doing compared to many others, it is a very positive story from Canada’s perspective. Access to the very large United States and Mexican markets is a key element of all three of these sectors. These are sectors where Canadian competence is among or near the best in the world.

How can Canada improve infrastructure for our supply chains?

There are three things: the first is continued support for our international agreements, then continued support for training and development, and then thirdly, really focusing on areas of significant benefit to Canada. I will just give you a simple example; this is not a Canadian example but it is an example we dealt with earlier in the year. Another foreign government was trying to find a way to stimulate its economy and it decided it wanted to invest in public transit. Investing in public transit would result in significant growth through the construction of civil works. However, it did not make any buses in the country and the only economic value-add would be the painting of the buses. We need to remember that when working on infrastructure, we need to keep in mind the domestic content of the sectors. The three sectors I mentioned have significant domestic content, and as we expand the investment in these sectors, we will see a greater economic and industrial impact.

For advanced manufacturing, we do have a relatively cheap and abundant water supply and energy resources. We have a highly trained and diverse workforce, and we have significant expertise in logistics. Canada is a big place, but we have figured out how to move goods and services around the country efficiently and effectively.

Canada is a big place, but we have figured out how to move goods and services around the country efficiently and effectively.

The Canada brand, over and over again, comes up both in terms of experts within the country and outside. Our experience with human capital in all three sectors is also very important. We do, however, need to make sure that we continue to have access to the United States market. That represents the principal demand option for Canada.

Is Canada well-positioned to continue to attract investment considering global megatrends?

Our experts have told us very much that we are, taking into account the scale of Canada. Canada does not have a billion people, and we are not the largest consumer market in the world, but having said that, Canada has high quality as its real brand in the world and what I would call a muted response to many actions. In other words, we are a good, constant, and faithful partner, and that will show great value in the coming decades.

I am not saying that the others are not reliable partners. What I am saying is that in a world where there is constant upheaval and turmoil, Canada has a reputation for sobriety or having a muted response, and that is a very big advantage in a tumultuous world.

We are a good, constant, and faithful partner, and that will show great value in the coming decades.

Our economy is poised to take advantage and prosper from the changes that have been set in motion by COVID-19. We do not need massive changes; the things that we have in place are good, strong, and durable advantages. Our experts told us that we should be confident and that Canada is well-positioned to prosper in the future.