Canada: The Gem on our Northern Border - Building Bridges for the Minority Business Community

By G. Alfred Kennedy
Managing Partner
Source International, Inc.

Special to The Black Business Journal


In an earlier article "Affirmative Action, New Markets, and the Struggle for Economic Freedom," I suggested that in today's economy, the minority and female-owned small-to-medium-sized enterprises can no longer live, compete and prosper without thinking globally. The reality of this new millennium is that the world must be their new market. I then identified ten markets that the U.S. Department of Commerce suggests offer the greatest export opportunities for American investors. To that list of ten countries, I would add the "gem" on our northern border - Canada, the world's seventh largest market economy. Canada offers an ideal first stop - a bridge - for the savvy executive of a minority or female-owned enterprise who is just beginning to export to or is new to international markets.

Although Canada's population is only one tenth that of the United States, its economy mirrors the American economy in about the same ratio. For the minority investor (African American, Hispanic American, or Asian American) who is uncertain about the challenges of navigating foreign social systems, business practices, and legal systems, Canada is the ideal first stop abroad. Its business practices, attitudes, and conditions are closer to those in the United States than are the business practices of any other country in the world.

The breath and depth of America's relationship with Canada provide additional incentive to pursue opportunities in the Canadian market. What joins Americans and Canadians at the hip is a commitment to preserving and deepening the world's largest bilateral trade relationship. We both believe in free, unfettered trade; open markets, deregulation, competition, sustainable economic growth, and the expansion and creation of opportunity on a global scale. This is the foundation of our relationship with our northern neighbors. This foundation offers a measure of comfort that some emerging nations do not.

We also share a belief in an enlightened trade policy as the sine qua non in creating a prosperous global economy in this new century. This is important to the female and minority investor for one simple, but critical, reason. An effective trade policy for this new millennium creates a framework of rules that sustains support in emerging markets, for example, for the principles of respect for intellectual property; fair, nondiscriminatory and transparent regulatory policies; and prevention of artificial new barriers to trade and investment. Where there is a common set of rules, there is opportunity. Where there is opportunity, creative genius flourishes. This has been the secret to the incredible success of the medium-size enterprise -- including those that are female and minority-owned -- in both the United States and Canada. By preserving a common set of rules, we are more apt to take risks crucial to success. Thus we compete and we remain profitable.

Here are a few facts to consider regarding the advantages of investing in Canada: Tariff-free benefits (Canada is a signatory to NAFTA). Congruent time zones. A straight forward regulatory system. A common language (except French-speaking Quebec). A highly-skilled and well-educated labor force. A quality of life equal to or better than that offered in other developed nations. One of the most modern and highly developed transportation infrastructures in the world. A communications infrastructure comparable to that in the United States.

Let me also share my perspective on Canada. While serving as the U.S. Consul General in Toronto, Canada (1993-1996), I was the official host for trade delegations from the United States and Puerto Rico. Generally, the members of the delegations were the CEOs and owners of small-to-medium-sized companies. I learned that many Americans beyond the Great Lakes and New England know little about Canada. This is particularly true for African Americans and other minority groups. It is as true now as it was during my tenure there: opportunities abound, most notably in the Province of Ontario.

For the female and minority investor, geographic proximity reduces the time and expense associated with maintaining trade relations. First-time U.S. exporters and investors can become familiar with some of the additional requirements of overseas marketing and investing in the less alien Canadian environment. These investors may also become exposed to some cultural and linguistic differences in Canada's five distinct regional markets. The experience female and minority investors gain in this market can provide a firm basis for success in markets worldwide.

So, why invest in Ontario? The answer is simple. The Province of Ontario is the dominant province in Canada in terms of population size as well as economic, political and cultural influence. This province accounts for about 40 percent of Canada's population, 53 percent of its manufacturing shipments, and over 40 percent of its Gross Domestic Product (GDP). It is also the heart of English-speaking Canada. Toronto, the largest city in the Province (and Canada), is the country's financial and commercial capitol. It is also the hub of Canada's corporate community. Opportunities abound in telecommunications, automotive aftermarket products/accessories, computer hardware and software, food service, environmental and health products and services, and building products.

The demographics of the Greater Toronto Area (GTA) are impressive: population over four million, number two financial center in North America after New York City, and its economic vitality is critical to the economic strength of Canada. Many Americans are unaware, for example, that 65 percent of Canada's wealth is within 100 miles of Toronto. This bustling city and its satellite communities are the fastest-growing large metropolis in the Eastern Great Lakes region. Important to the minority business community is the fact that the area is strong in business services: advertising, management consulting, and design-oriented activities. It is the center for national distribution networks in many product sectors.

For culture and entertainment, the GTA is the preferred location for tourists from many parts of Michigan, Ohio, Pennsylvania, and the State of New York, and the number two destination in North America for live entertainment after New York City.

The minority business community should bear in mind that Toronto and Ontario have everything going for it: a commited and well-educated work force, excellent schools, colleges and universities, advanced infrastructure, a city that works, and a provincial government friendly to and open for business.

While not impossible, it is significantly more difficult to sell and invest abroad if one does not go abroad. Given the close geographic proximity of Canada and the relatively low cost of travel across the border, when compared to travel to most of the Big Emerging Markets, I would urge the female and minority investor to go north and participate in one of a variety of low-cost market entry programs available.

Part of the challenge the female and minority investor confronts to remain competitive and profitable is defining the next frontier for his/her products and services. Canada offers opportunity, geographic proximity, and a business environment similar to that which we have in the United States. Once we have defined our market, let's move to the prescription for success I described in "Affirmative Action, New Markets, and the Struggle for Economic Freedom." At the risk of repeating myself.....' By all means and with all diligence, resolve the issues involved in knowing precisely who your customers are, what they want and what your competition will provide if you don't. Enlist the support of the right people to tailor your strategic plan to accommodate change, and to facilitate your research and development effort. Refine your business plan and then move your strategies into global directions.'

The choice for the female and minority investor is to enter markets like Canada and prosper in them, or to watch our foreign economic and commercial rivals do so. The large emerging markets, including that of Canada, are likely to be saturated within the next decade. The minority business community must move swiftly and aggressively if they are to be equal and productive contributors to the prosperity of their communities and to the prosperity of this nation.

Again, plan for success and for failure. Be agile enough to make timely corrections in your strategy. Above all, remain flexible.


G. Alfred Kennedy is a former senior Foreign Service officer with the U.S. Information Agency and the U.S. Department of State in Washington, D.C. He was the U.S. Consul General in Toronto, Canada (1993-1996), a Senior Advisor to former Commerce Secretary Ronald H. Brown, and a Deputy Assistant Secretary of State with the U.S. Department of State. Mr. Kennedy served in Italy, Germany, France, Belgium, the Republic of the Philippines and South Korea. Currently, he is a partner and owner of Source International, Inc., an international consulting firm with headquarters in the Washington, D.C. Area. Web site: www.sourceinternationalinc.com. He is a contributing editor of The Black Business Journal.