Canada is among the first places where many countries look to send their goods. While the country is self-sufficient in many things, there are numerous items that Canada tends to source from other countries. In this piece, we will talk about various countries exporting their various goods to Canadian markets, along with various compliance requirements, documentation and much more.
Sourcing Parts to Canada
The United States Mexico Canada Agreement, which is also known as the USMCA replaced NAFTA during 2020. According to this agreement, companies that were utilizing the perks offered by NAFTA for sourcing industrial parts to Canada should review what they are exporting to ensure they qualify the USMCA’s terms. While there weren’t massive changes to many products, certain Canada based industries, such as agriculture, went through massive changes.
The USMCA balances and modernizes the trade relations of the United States with Mexico and Canada while minimizing outsourcing incentives by offering environmental and labor protections, changed investment provisions, and a brand-new rule of origin. This agreement also proposed environmental and labor obligation, ensuring they are enforced properly.
The Agreement’s Highlights
While the USMCA discusses numerous things, here are key highlights that are worth taking note of:
According to the USMCA, Mexico and Canada agreed to enforcement provisions taken against piracy and counterfeiting, making sure trade secrets remain protected and law enforcement officials stop any goods they think could be counterfeit
This agreement has incredibly strict regulations regarding digital trade, including international trade agreements. There are also rules for enabling data transfer cross border and reduced limits on data processing and storing
The USMCA also dictates that the Canadian market can source poultry and dairy items from the United States
Did you know?
MPI has been sourcing custom, engineered parts to
Canadian markets since 1976.
We are here to help you select the right industrial parts for your application.
Important Facts about Sourcing Parts to Canada
Ever since the Second World War, Canadian service, mining, and manufacturing sectors have seen a massive growth that changed the country from a mostly rural economy to an urban one. The country was ranked seventieth by PPP basis (Purchasing Power Parity). However, its fortunes have changed vastly over the past few decades.
The Canada and United States free trade agreement in 1980 and the North American free trade agreement of 1994 massively increased economic and trade integration among Canada and the U.S. These two countries share the most balanced and comprehensive bilateral investment and trade relationship. All of this might cause one tow wonder how this relationship looks like today. Well, the goods and services trade between Canada and the United states in 2018 totaled over 680 billion Dollars.
The United States receives over seventy five percent of Canadian exports every year. What’s more, Canada is arguably the biggest supplier of the energy that the United States receives. This includes electric power, natural gas oil and uranium.
Top Items Exported by the United States to Canada
Here is a list of the most common items that Canadian Markets have been sourcing from the United States since 2018:
Lawn Equipment
Mineral fuels
Machinery Parts
Automotive
Canada has also become the go to export destination for food and agriculture industry items from the United States. During 2019, the United States supplied Canada with agricultural products and was arguably the biggest one during that time.
Over seventy percent of exports from the United States were consumer oriented, high value products, which included nonalcoholic beverages, snack foods, fresh fruits and vegetables, and prepared foods.
The Challenges Associated with Sourcing Parts to Canada
Exporters who want to source items to Canada must overcome trade barriers. These barriers can be a massive challenge and some of them include:
Believe it or not, many countries tend to forget that America and Canada are different countries and that Canada’s export procedures are incredibly different. Because of this, they do not follow basic export compliance regulations, which often results in more obstacles
Exporters from the United States must comprehend the different provincial regulations and do their due diligence on sales channels and market potential. They must also understand things like certification standards, packaging requirements and labeling to steer clear from sourcing related issues
The competition in certain sectors like furnishings, electronics, vitamins, and cosmetics has vastly increased over the years. All of this means that there is an increased need for imaginative marketing, competitive pricing and discounts for distributors and agents. Exporters must also be prepared for things like bilingual labeling, packaging requirements, documentation, Canadian provincial, and federal sales tax accounting.
Contract bidding can be a massive challenge for countries sourcing products to Canada. This is mainly due to security clearances and requirements. Bidders should make sure that their registration in Canada is complete and remember to fulfill the Canadian government’s requirements to get contracts
Opportunities of Sourcing Industrial Parts to Canada
The possible rewards of sourcing goods to Canada far outweigh the various challenges that exporters could encounter. Exporters must cultivate and identify opportunities and develop a plan to steer clear from risks. The impact made by the USMCA so far has been quite positive, which means that Canada is among the best countries to source goods to.
What’s more, the USMCA vastly improves access to the market in several ways, particularly through automotive manufacturing, environmental obligations, labor obligations, digital trade and intellectual property rights. Canada has numerous sectors that show a great deal of promise, and some of them include:
Sourcing parts for following industries:
Agriculture
Snow Removal
Conveyor
Material Handling
Automotive
Heavy Machinery
Packaging
Lawn Equipment
One of the best parts about sourcing parts to Canada is that you don’t have to do it all by yourself. There is plenty of companies such as Mechanical Power out there, especially for businesses in the U.S and it includes trade missions, United States commercial service, chambers of commerce and in country allies.
Daniel Szwed - Marketing Manager
Mechanical Power, Inc.
Resourceful and innovative Marketing Pro, with 20+ years of progressive experience in the marketing and creative technology industry. Responsible for digital and traditional marketing efforts that promotes brand awareness, increases engagement, and drives revenue.
