According to the statistics of 2014, the Canadian investment in foreign countries grew by 8.9%. This figure reflected both investment flows outward and the upward revaluation of the Canadian dollar against US dollar. On the other hand, the inward foreign direct investment in Canada increased by 5.8%. This increase was majorly due to the investments from the US. Hence, the net direct investment in Canada, for the first time in past three years, reached $96.5 billion. This figure marks the largest net asset position of the country's recorded history.
In 2014, the Canadian foreign direct investments reached $829 billion, which was $67.3 billion higher as compared to 2013. Around two third of the gains in investments were from the investment stocks in the US . Europe is the second most favorite region for the country’s direct investors. The investments I Europe were up by 1% and reached $191.5 billion. The country had extensive gains in Switzerland and UK, which reduced the effects of losses faced in France and Luxembourg. The overall impact of foreign investments resulted in the appreciation of country's currency against the euro by 4.4% in the past year.
The process of the Canadian government to explore new emerging markets brought fruitful results and the country's investment in Asia Pacific, and Oceania regions reached $698 billion, 10.5% more than 2013. High growth in the investments was also recorded in China, Hong Kong, and Australia. However, significant reductions were faced in Japan, which resulted in the moderation of overall investments in that region. Despite the reduction in investments, Canadian dollar appreciated against Yen by 4.5%. The inward foreign direct investments in Canada increased by $40.3 billion and currently stand at $723.3 billion. Direct investors from the US increased their holdings by $19.5 billion, which resulted in the total investments reached up to $361.4 billion. This figure reflects almost half of the investments in Canada. Moreover, investments from Asia and Oceania region stand at $85.9 billion, after registering the growth of $7.9 billion. 60% of these investments were from the China and Hong Kong. Figure 1 below summarizes the net foreign direct investments of Canada :
Figure 1:
“Foreign direct investment position.”
Source: “Foreign direct investment position.” Stacan. 24 April 2015. Table. 27 February 2016.
It is important to note that finance and insurance sector of the country remained the most attractive sector for the foreign direct investments. Holding in this sector increased by 22.5 billion and reached up to $313.5 billion. Other important sectors included investments in asset management and manufacturing which reached $121.4 billion and $68.8 billion, increasing by $19.4 and $8.3 billion respectively.
A pattern of investments by the country reveals that Canada is focusing increasingly on manufacturing and mining sector. According to the statistics of 2014, this sector accounted for nearly half of the increment in foreign direct investments. Investment position in this sector is up by $11.2 billion and is currently floating at $215.7 billion. Since the past two decades, the sector of mining and manufacturing accounts for more than half of the foreign direct investments in Canada.
Role of Canada's Government in Promoting and Financing Exports
Canada has long recognized that the trade and investment are the most effective means to accelerate economic growth and prosperity. Today, the trade represents more than 60% of the country’s GDP and one of every five job in Canada is directly linked to exports related industry.
Global opportunities for associations were previously known as Program for Export Market Development. The aim of the association is to provide funding to the national associations that initiate or expands international business activities in high growth and strategic sectors. The association offers non-repayable findings to the companies. These funding’s range from $20000 to $25000 and are made for one year. Association also offers matching funds for eligible expenses up to 50% .
In 2007, the Government of Canada initiated its global commerce strategy as a program for strategic economic growth. The aim of the program is to expand the country’s trade network, approaching newly emerged markets around the globe and, strengthening the competitive position in the global market. Soon after its initiation, the Global commerce strategy program proved to be the success and lead to the conclusion of free trade agreements with around 37 countries around the world.
The government has also initiated an Economic Action Plan in 2012 with the purpose to continue the success of Global Commerce Strategy . In this action plan, the government has consulted business communities of the country to explore the opportunities and strengths and o identify the new emerging markets. Also, the government has made consultations with other allied countries.
It is important to note that the Government Action Plan has also established the targets for the next five years to enhance the exports of the small and medium-sized enterprises, particularly those working in line with the government.
Canada has responded most aggressively and strategically to the changing global economy, specifically after the recession of 2008-09. The recession has brought the negative effects on the trade of the country with most of its traditional partners. After the recession, the country believed that the change in communication and transportation system and the growth of new markets around the globe requires that the old strategies for conducting international business should be revised. The country global commerce strategy has played an important role in placing the country on strong economic footing. It is evident from the fact that the country has the lowest debt – to – GDP ratio and the highest employment growth among G-7 since the global recession of 2009.
The country has defined emerging markets with broad Canadian commercial interest as those markets that could be prioritized with foreign direct investments, technology and talent and, the markets that are part of regional trading platforms. Asia Pacific, Latin America, North America, Middle East, Africa and Europe were identified as the best potential market for foreign direct investments.
Canadian corporations, specifically medium and small sized enterprises face an enormous struggle for the expansion of emerging markets. In such countries, the major hurdles are culture, regulatory environment, and language, which often create a problem even in a trade agreement. The government of Canada has established a series of policies to address these issues, and the government continuously deploys its resources to the firms, which are working in the priority markets. Trade promotion tool offered by the government includes market expansion services and he market expansion programs. These tools are provided by the Canadian trade commissioner services. It is important to note here that Canada’s trade commission’s services are free of charge for eligible Canadian companies and serves more than 14000 clients in a year. The high achievement of this government department is evident from the fact that the commission received a satisfaction rating of 83% in 2013 and 2014.
The government of Canada has prioritized trade and trade-related agreements and has provided access to businesses of all size to the foreign markets to create jobs and opportunities for workers and businesses. To facilitate the trade and to remove growth barriers, the government has established several tools that include:
Free trade agreements
WTO agreements
Double taxation agreements
Foreign transport promotion and protection agreement
Air transport agreement
Winning Strategies of Canadian Corporations
Roger’s Communication
Rogers’s communications are considered as the market leader in the Canadian cellular M2M and IoT communications market. The company currently facilitates more than 1.5 million M2m and IoT connections through its network. The company has registered a successful growth across many industrial sectors including retail, healthcare, government, asset management and fleet management.
The company has an extensive business care and support groups that serve the need of enterprise M2M and IoT. The company also has highly professional and managed services system that has led it to become a provider of M2 and IoT lifecycle management services that also includes a device for boarding, deployment management, and application integration. With the help of its partner ecosystem, the company assists its customers in achieving enhanced productivity, seamless integration and lower costs .
One of the primary success factors for the company is that it offers customized pricing around their unique business models. The company also delivers additional value by offering cloud-based application hosting and machine data management services.
The adaptable and multipurpose M2M and IoT services offered by the company are the key factors behind the leadership position of the company. Other key elements of the company’s success include:
Global coverage through M2M global alliance and a global SIM.
Committed business supports teams
A vigorous highly technological next generation cellular network that supports 2G, 3G, and 4G deployments.
Highly effective strategies for sales, marketing, and distribution
Nonstop focus on development and innovation of new product line and investments in research and development.
According to Frost and Sullivan, Rogers’s communication offers the most comprehensive solution for IoT and M2M in Canada. The company is the only one to provide the 2G-network connection, which differentiates it from other competitors in the market . Furthermore, the company has exclusive rights in the country for the M2M Global Alliance initiative which encourages it to make further investment in application platforms, end to end vertical solutions and customer services that assist the company in enhancing its competitive position in domestic and as well as global markets. The Canadian market allows plenty of room for further growth in the industry; Frost and Sullivan are of the view that the company will maintain its leadership position through maintaining is preferred partner status.
Rogers's wireless division is Canada's biggest wireless carrier, which has more than 6 million customers and controls more than 35% of the youth market of the country. Rogers's wireless networks enjoy the highest revenues among other wireless carriers in the country. Rogers wireless accounts for approximately 55% of total income of Roger's communications.
One of the biggest changes in the company took place in 2004 when the company successfully invested $1.5 billion for the takeover of Microtel communication. The Company named it a ‘Fido’ brand, which is said to be successful for two primary reasons. First, it focuses solely on young buyers, which constitute the main market of Canada. According to the president of the company, Ted Rogers, “the Fido brand is well known and adds clout to Rogers Wireless's position in the important youth and young-adult market.” Secondly, the network of Fido was kept very small and was only available in major urban areas.
The company has used several strategies over the past decade to grab the market share in the industry. One of the most successful strategy for the company in this regard has been the price discrimination through which the company has offered many different packages to its customers such as Family Package, Pay as you Go, value Pack, etc. These packages were designed by the company to meet the requirements of the people belonging to different life style.
HSBC Bank
HSBC is the world’s largest banking and financial network with 6,100 offices in around 73 countries. The total assets of the company were reported to be US $ 2,634 billion at 31st December 2014. In Canada, HSBC is one of the leading banks with total assets of $88 billion. Other than Canada, HSBC’s international network is spread across Europe, Asia, America, Middle East and Africa. Shares of the company are listed in Hong Kong, New York, Paris, Bermuda, and London.
HSBC group considers Canada as one of its highest priority markets. It assists companies and individuals across the country in doing business and in managing their finances through its three global business divisions namely: Commercial Banking, Global Banking and Markets, and Retail banking and wealth management.
HSBC has deep roots in Asian markets and considers it an emerging market. It has invested $145 billion in that region . The bank manages more than $500 billion of the assets. Foreign investment by the company makes it undoubtedly the world’s largest emerging market managers. It can also be evidenced by the fact that the company has more than 200 specialists in around 18 countries of the world.
The company’s GEM range includes the funds in India equity, Brazil equity, and BRIC equity funds. Funds in India have provided the company with more than 1700% and are regarded as the largest fund in the sector. With regard to its funds, the company’s strategy had been to offer most cost effective access to their funds.
The primary factor behind the success of the company is its footprints in emerging markets of Asia. Hong Kong and India are considered to be the home markets of the bank in Asia while in Europe; the United Kingdom is the largest market.
Husky Energy
Husky Energy is one of the leading energy groups in Canada. The company recently changed its strategy and divided its operations between two pillars namely, Foundation and Growth Pillars that made it the entirely different company from what it was in the past decade. With the help of its strategic partnership, legacy position and exploration success, the company has developed a diverse portfolio of upstream assets.
Husky is on number three in terms of size, following Suncor and Imperial Oil. However, the company differentiates itself from the competitors through the high degree of diversification. The production facilities of the company range from western Canada to the east coast offshores. Its offshore gas production extends to Asia where the ongoing exploration and production works have reached up to Indonesia, China, Greenland, and Taiwan.
One of the major factors behind the success of the company had been its fiscal discipline. The company has cut down its capital spending significantly, reduced its labor force, issued new debt instrument and equity share in the market, improved its reserves and had paid off its obligations towards join venture partners.
The company, in order to enhance is growth, has initiated two new projects, Sunrise, and Liwan. These projects are generating high positive cash flows even after CapEx and dividend payments . Other than these two projects the company has significantly improved its operations by shifting its focus solely towards large and long-term projects. The large diversified portfolio of the company allows it to deliver predictable and high rerun opportunities.
The highly experienced management of the company has revitalized it base, Western Canadian upstream assets. These assets are led by the liquid rich gas and thermal heavy oil projects. The project execution of the company had been very staunch, and it is grading its portfolio high in western Canada.
Conclusion
Canada’s economy has been largely run by the trade and commerce industry. The government of the country is of the view that jobs and opportunities for the people are created by the business that the country does with other countries. Due to this reason, the government has made the opening of new markets and attracting investments as the key factors of Canada’s economic action plan. This long-term plan of the government is already bearing fruitful results and is expected to ensure the long-term success and prosperity for all the Canadians in the future.
Works Cited
Annual Report 2014: Husky Energy. Alberta: Husky Energy, 2014. Print.
Annual Report and Accounts 2015: HSBC Bank Canada. Vancouver: HSBC Canada, 2015. Print.
Canada: Foreign investment. 2016. Web. 28 February 2016. <https://en.santandertrade.com/establish-overseas/canada/foreign-investment>.
"Foreign direct investment position." 24 April 2015. Stancan. 27 February 2016. <http://www.statcan.gc.ca/daily-quotidien/150424/cg-a001-eng.htm>.
Global Opportunities for Associations. 27 January 2016. Web. 28 February 2016. <http://tradecommissioner.gc.ca/funding-financement/goa-oma/index.aspx?lang=eng>.
Husky Energy - Diversity And Caution Slowly Paying Off. 3 August 2015. Web. 28 February 2016. <http://seekingalpha.com/article/3390155-husky-energy-diversity-and-caution-slowly-paying-off>.
"Rogers Communications Award Write Up." 2015. enterprise.rogers. Web. 27 February 2016. <http://enterprise.rogers.com/pdf/RogersCommunicationsAwardWriteUp.pdf>.
Trade Investment and Economic Statistics. 2016. Web. 28 February 2016. <http://www.international.gc.ca/economist-economiste/statistics-statistiques/index.aspx?lang=eng>.
