Exporting to Canada Jakarta, Indonesia 22 October 2015 TFO Canada - - PowerPoint PPT Presentation

Exporting to Canada

Jakarta, Indonesia

22 October 2015

Canada-Indonesia Trade and Private Sector Assistance Project (TPSA)

TFO Canada

Mandate

TFO Canada confronts the challenge of global poverty by promoting sustainable economic development through export information, advice and contact. We facilitate access to the Canadian marketplace and share Canadian trade expertise for the benefit of smaller male and female owned/managed exporters from developing countries and for the men and women they employ.

History

• Founded by the Government of Canada

in 1980, became an NGO in 1985

• Headquarters in Ottawa, regional

representatives in Quebec, Ontario and British Columbia

• Clients: SMEs Exporters and Trade

Support Institutions (TSIs)

• Funding from:
• Department of Foreign Affairs, Trade

and Development

• Partner governments and other donors
• Cost sharing by participants, partners,

Canadian corporation. 2

Foreign Suppliers

• Free matchmaking

service with Canadian buyers

• Access to the Canadian

Importer Database

• Market Information

Papers

• Exporting to Canada

Handbook

• Exporting to Canada

Newsletter

Canadian Buyers

• Foreign Supplier

Database

• Client Country Profiles
• Market Links
• Import Info Newsletter

Trade Support Institutions

• Registered Suppliers

Database for their country

• Market Links
• Responsive activities:

co-financing of trade missions, market entry studies for companies with 4 MBA university programs, training on the Canadian market (priority countries only)

• Note: TSIs can also

register on our website 3

TFO Canada Online: 3 Types of Users

Canada: Consumers & Market Trends

Overview

9

Canadian Geography and Governance

• Second largest country in the

world by land mass

• Six geographic regions divided

into 10 provinces and 3 territories

• 3 levels of government:

federal, provincial/territorial, municipal

• Type of government: a

parliamentary democracy, a federation, and a constitutional monarchy

British Columbia The Prairies Ontario Québec The North Atlantic Canada

Source: Statistics Canada, Population estimates and projections (2013)

10

The Canadian Population

Small, concentrated population:

• Total population: 35.7 million (October

2014 estimate)

• 10% size of U.S. population
• 62% of Canadians live in Ontario

and Quebec

• 80% of Canadians live within 160

km of the U.S. border

• 81% of the population is urban
• 1 in 3 Canadians lives in one of

Canada’s three largest cities (Toronto, Montreal, and Vancouver)

British Columbia The Prairies Ontario Québec The North Atlantic Canada

Source: Statistics Canada, Population estimates and projections (2013)

11

Atlantic Provinces: Québec: Ontario: Prairie Provinces: British Columbia: The Territories: Million Million Million Million Million Million 2.3 8.1 13.5 5.3 4.5 0.1

• 1 in 7 Canadians are senior

citizens (age 65+)

• Baby boomers (born 1946 to 1965)

dominate the Canadian market

Source: Statistics Canada, Census (2011) Source: Globe & Mail (2012)

12

Ageing Population

• 1 in 5 Canadians are immigrants

(highest % in G8 countries)

• 1.6 million new immigrants settled in

Canada from 2006 to 2011

• 62% of new immigrants settle in

Toronto, Montreal and Vancouver

Source: Statistics Canada, Census (2011), National Household Survey (2011)

13

Immigrant Population

4%

Caribbean 5% Other

6%

Latin America

9%

Middle East

10%

Europe

15%

Africa

51%

Asia

New Immigrants to Canada by Region in 2013

Source: Citizenship and Immigration Canada, Permanent residents by source country (2013)

Income Per Capita by Province

14

Source: TFO Canada, Statistics Canada, CANSIM Table 203-0021, Survey of household spending, 2013.

Canadian Consumers

Trends/Opportunities:

• Ethnic Products (agro-food, halal, cosmetics)
• Health (natural products, certified bio/organic)
• Personal Care (natural products- market

growing +3% per year, forecast to $2 billion by 2018)

• Fast moving consumer goods (retail)
• Niche and specialty (premiumization in health

foods, alcoholic beverages)

• Household products (home décor)
• Hobbies (sport, gardening, recreational

equipment)

• Holiday/Seasonal markets (Christmas,

Halloween, Valentine’s Day)

Source: TFO Canada Market Information Papers

15

Household Spending:

• Shelter/Accommodation: 34%
• Income taxes: 14%
• Food: 8%
• Discretionary Spending: 20%

Increasingly multicultural Tech-savvy, purchase

• ver internet/mobile

Regional differences Health, socially and environmentally aware Well informed but demanding Affluent but price conscious Home owner Double income (although many single parent homes) 16

Canadian Consumers

Source: TFO Canada Market Information Papers

Importance of Corporate Social Responsibility (CSR)/Environmental considerations

Helps make your business more competitive, productive and innovative, through:

• Improved reputation and branding
• Enhanced operational efficiency, risk

management, and access to investment & capital

• Stronger relationships with employees and

communities CSR is important for SMEs when doing business with a growing number of Canadian businesses Know the regulations and legislative context related to environmental considerations Source: Industry Canada

17 Elements of CSR (some examples)

• No child labor
• Living wage
• Working hours, holidays
• Overtime pay
• Healthy and safe environment (e.g. fire

escape, medical facilities)

• Community involvement
• Gender sensitivity
• Social issues
• Child-care facilities
• Environment management

18

Source: TFO Canada “Changing Expectations: A Guide to Corporate Social Responsibility for Small and Medium Sized Enterprises Exporting to Canada” (2014)

Corporate Social Responsibility (CSR)

A Six Step Implementation Process

Regulatory Requirements and Stakeholder Expectations Assess Performance Against Expectations Commitment and Leadership Monitor and Review Develop an Action Plan to Address Priority Issues How to Best Tell the Story of Your CSR Performance

1 2 3 4 5 6

Environmental Management Systems for Exporters

19

Source: TFO Canada “Environmental Management for Exporters: An Environmental Management Guide for Small and Medium Sized Enterprises Exporting to Canada” (2014)

Develop an environmental goals/policy and analyze environmental impacts and legal requirements Set environmental

• bjectives and targets,

and establish programs to meet them Monitor and measure progress in achieving the objectives and ensure employees’ awareness and competence Review progress of the EMS and make improvements

Step 1 Step 2 Step 3 Step 4

20

Market Comparison and Trade Relations between Canada and Indonesia

Market Comparison between Canada and the USA

Canada USA

Population 35.7 million 317 million GDP $1,654 billion $16,086 billion Exports $525 billion $1,792 billion Imports $511 billion $2,660 billion

Values in $CAD estimates (2014) Source: Canadian & US Government Sources, ITC Trade Map

21

Canada USA

Population 35.7 million 317 million GDP $46,320 $50,140 Exports $14,680 $5,580 Imports $14,310 $8,290

Values in $CAD estimates (2014) Source: Canadian & US Government Sources, ITC Trade Map

22

Market Comparison: Canada and USA per capita

Why Canada?

Significant volume of imports valued at $411 Billion (2014)

• Imports represent 31% of GDP
• 5% average yearly growth in

imports over the past 5 years

• 11th largest import market in the

world Diversification of trade partners

• Canada is undertaking a major

effort to diversity trade

• pportunities, including signing

new Free Trade Agreements

Excludes minerals (HS Codes 26-27 and 71-80) Source: Industry Canada, Trade Data Online (2014)

23

$ 324 $ 347 $ 365 $ 380 $ 411

2010 2011 2012 2013 2014

Canadian Imports on the Rise ($CAD billions, excludes minerals)

Source: Industry Canada, Trade Data Online (2014) Regional breakdown based on countries with imports valued over $500,000. Excludes $3.2 billion in re-imports to Canada.

54% United States 23% Asia 13% Europe 8% Latin America

Canadian Imports by Region

United States (54%) Asia (23%) Europe (13%) Latin America (8%) Middle East (0.5%) Africa (0.4%) Caribbean (0.3%) Australia (0.3%) East Europe (0.1%) Other (0.4%)

Canadian Imports by Country

Asia & Middle East

24

Excluding mineral products (HS2 Codes 26-27 and 71-80) Source: Industry Canada, Trade Data Online (2014)

Asia Imports 2014 % of Total Growth Rate TOTAL 80,214,747,281 100% 1% China 54,659,331,494 68% 3% Japan 12,632,002,465 16% 14% South Korea 6,294,971,272 8% 3% Taiwan 3,927,597,906 5%

• 5%

Vietnam 2,700,844,144 3% 8% Middle East Imports 2014 % of Total Growth Rate TOTAL 2,114,226,310 100% 5% Israel 959,417,730 45% 2% Turkey 854,507,270 40% 9% UAE 65,644,730 3% 20% Jordan 58,932,393 3% 26% Oman 50,582,417 2% 23%

Excluding mineral products (HS2 Codes 26-27 and 71-80) Source: Industry Canada, Trade Data Online (2014)

25

Canadian Imports by Sector (2014)

For more information: Download TFO Canada Market Information Papers www.tfocanada.ca/mip.php

Overview of trade from Indonesia to Canada

28

• Imports into Canada from Indonesia

totaled CA $1,392 M (excluding minerals) in 2014 and are growing at a rate of 5% CAGR over the past 5 years

• Indonesia’s exports to Canada are

primarily in 3 product categories:

• Rubber articles: $241 million or 23%
• Woven apparel: $164 million or 16%
• Knitted apparel: $ 151 million or 14%

Source: TFO Canada Trade Data Analysis Tool

$ 1,115 $ 1,356 $ 1,242 $ 1,281 $ 1,392

2010 2011 2012 2013 2014

Canadian Imports from Indonesia ($CAD millions, excluding minerals) 5% growth over the past 5 years

Excluding minerals (HS codes HS2 26-27 et 71-80) Source : Industry Canada, Trade Data Online

29 23% 16% 14% 13% 9% 6% 6% 5% 4% 4%

• 1. Rubber (23%)
• 2. Woven Apparel (16%)
• 3. Knitted Apparel (14%)
• 4. Electronics (13%)
• 5. Footwear (9%)
• 6. Cocoa (6%)
• 7. Machinery and Appliances (6%)
• 8. Furniture (5%)
• 9. Paper Products (4%)
• 10. Coffee, Tea and Spices (4%)

Top 10 Indonesian Exports to Canada by HS2 Product Codes (2014)

30

Market Share of Indonesia (2014)

Excluding minerals (HS codes HS2 26-27 et 71-80) Source : Industry Canada, Trade Data Online

Top 10 Products Exports to Canada (millions) Addressable Market in Canada (millions) Market Share (%)

• 1. Rubber

$ 241 $ 7,413 3.3%

• 2. Woven Apparel

$ 164 $ 4,865 3.4%

• 3. Knitted Apparel

$ 151 $ 5,267 2.9%

• 4. Electronics

$ 136 $ 48,820 0.3%

• 5. Footwear

$ 90 $ 2,744 3.3%

• 6. Cocoa

$ 65 $ 1,636 4.0%

• 7. Machinery and Appliances

$ 64 $ 74,675 0.1%

• 8. Furniture

$ 57 $ 10,206 0.6%

• 9. Paper Products

$ 39 $ 6,177 0.6%

• 10. Coffee, Tea and Spices

$ 38 $ 1,826 2.1%

32

Conference Board of Canada TPSA

– Indonesia Imports (2014)

Excluding minerals (HS codes HS2 26-27 et 71-80) Source : Industry Canada, Trade Data Online

Products Exports to Canada (millions) Addressable Market in Canada (millions) Market Share (%)

• 1. Coffee

$ 29 $ 714 4.1%

• 2. Pepper

$ 2 $ 32 6.3%

• 3. Coconut (copra) Oil

$ 3 $ 64 4.8%

• 4. Sugar (invert sugar, caramel, artificial

honey, coconut sugar) $ 2 $ 26 6.1%

• 5. Coats, Jackets and Blazers (knitted or

crochet) $ 11 $ 259 4.4%

• 6. Coats, Jackets and Blazers (not knitted
• r crochet)

$ 27 $ 719 3.8%

• 7. Dresses and Shirts (knitted or crochet)

$ 38 $ 998 3.8%

• 8. Dresses and Shirts (not knitted or

crochet) $ 40 $ 733 5.5%

• 9. Footwear

$ 55 $ 1,305 4.2%

• 10. Furniture (wooden)

$ 38 $ 2,152 1.8%

Export Market Analysis

• Canada is not among Indonesia’s top

20 largest export markets, and accounts for less than 1% of its exports

• The main products Indonesia exports

to Canada are different from its global exports, which are dominated by coal, petroleum gas and palm oil 33 In order to increase trade with Canada, Indonesia could:

1) Identify other exportable products and services with potential in Canada, such as furniture & footwear 2) Seek to maintain competitive advantages and increase trade in top export categories to Canada, particularly apparel where Indonesia’s exports to Canada have grown rapidly in recent years 3) Register your business profile and export offer on TFO Canada’s website – there are less than 60 Indonesian companies currently registered!

Source: TFO Canada Trade Data Analysis Tool

Accessing the Canadian Market

A Step-by-Step Guide

34

Steps to Export to Canada

• 1. Implementation
• f market entry

strategy

• 2. Classification of

goods to determine rate of duties and taxes

• 3. Documentation to

get goods across the border

• 4. Transportation
• f goods to

importer Your starting point: Access Canada Guide & Market Information Papers www.tfocanada.ca 35

• Canadian Importer Database
• Industry Associations, Chambers of

Commerce, Trade Commissioners

• Trading, Banks, & Freight Companies
• Trade Shows, Commercial Missions
• Publicity & Promotion

Step 1: Gather Market Intelligence

Research the demand for your product in the Canadian market Understand the Canadian Regulatory Environment Identify Potential Importers/Buyers

• Size and scope
• Trends and opportunities
• Players in the market
• Price competitiveness
• Quotas, Norms and Standards
• Provincial laws, Prohibited Products
• Strict Labelling requirements
• Food, cosmetics & pharmaceuticals

Activities to create your Market Entry Strategy to access the Canadian market

Available at www.tfocanada.ca/mip.php

Know the Canadian Regulatory Environment

Products Examples of Regulations Government Department

Food, plants, animals (terrestrial and aquatic) and related products Food labelling and food recalls Wood packaging International waste and used machinery/equipment

• Fish Inspection Act
• Canadian Agricultural Products

Act

• Consumer packaging and

Labelling Act (as it relates to food)

• Fertilizer Act

Canadian Food Inspection Agency www.inspection.gc.ca Clothing labels Marking of precious metals Packaging and labelling of non-food products

• Competition Act
• Textile Labelling Act
• Consumer Packaging and

Labelling Act Competition Bureau www.competitionbureau.gc.ca Consumer goods, drugs, food, medical devices, natural health products, pesticides, pharmaceuticals, radiation-emitting devices, toxic substances, vitamins

• Canadian Consumer Product

Safety Act

• Food and Drug Act

Health Canada www.hc-sc.gc.ca Agricultural products, firearms, goods under trade embargoes, steel, textiles and clothing

• Export and Imports Permit Act

Foreign Affairs, Trade and Development Canada www.international.gc.ca

38

39

Automated Import Reference System (AIRS)

Available online at www.inspection.gc.ca/airs

• 1. Start search

using product key words

• r HS code
• 2. Answer guided questions
• n country of origin, end usage,

and/or destination in Canada

• 3. Generates a list of import

requirements Depending on the product, this may include:

• required licensing
• import documentation
• release forms, declarations, etc.
• links to relevant Canadian

regulations

Identify Distribution Channels

40

Importers/ Distributors

• Most goods are exported to an importer who either sells directly to a retailer or

through a broker

• Markups vary by sectors
• CID database/Trade shows

Agents/ Brokers

• Most food and specialty items enter the market by way of an agent/ broker who

sells directly to retailers

• Markups vary by sectors
• Trade shows/ online search/industry association database

Retailers

• Multinational and large national retailers purchase directly from exporters in a

number of sectors and via food brokers in others. Smaller retailers usually make purchases directly from exporters and/or importers

• Markups vary by sectors
• Trade shows (mostly consumer focused)/ industry association database

Retailers use different sources:

• Canadian trade shows (98%)
• Catalogues (93%)
• Websites (90%)
• Sales reps (90%)
• LinkedIn (85%)

Source: Retail News Magazine, Market Pulse 2014 (for home décor sector)

41 Available on www.tfocanada.ca

• r www.ic.gc.ca/cid

Search options

• product key

words

• HS6 or HS10
• destination city
• country of
• rigin

Generates a list of company names

Find Buyers: Search the Canadian Importers Database

Agro-Food

SIAL Canada Processed Foods www.sialcanada.com Montreal, April 13-15, 2016 CHFA West Natural and Organic Products www.chfa.ca Vancouver, May 12-15, 2016 Canadian Coffee & Tea Show www.coffeeteashow.ca Toronto, September 25-26, 2016 Canadian Produce Marketing Association Fresh Produce www.cpma.ca Calgary, April 12-14, 2016 Grocery Innovations Canada

• www. cfig.ca/grocery-innovations-canada

Toronto, October 17-18, 2016 Canadian Blooms Flowers www.canadablooms.com Toronto, March 11-20, 2016

Giftware & Decoration

Toronto Gift Fair www.cangift.org Toronto, January 31-February 4, 2016 Canadian Furniture Show www.canadianfurnitureshow.com Toronto, May 28-30, 2016

Apparel & Footwear

Mode Accessories (incl. Apparel/Fashion) Toronto, January 31-February 2, 2016 www.mode-accessories.com Toronto Shoe Show February 21-23, 2016 August 21-23, 2016 www.torontoshoeshow.com

42

Identify Major Trade Shows in Canada

• Canada has it own Customs Tariff Structure based on the Harmonized Tariff

System (HS Codes)

• For example: Here is the HS code structure for Basketwork, wickerwork

and other articles, made directly to shape from plaiting materials

• 4602. 11. 92 .00

Heading Subheading Tariff Item Statistical Suffix

International Canadian Classification of Goods

43

Understand Canadian Tariff Treatment

Rules of Origin

• Very complex and vary by products and trade agreements
• It is the exporter, not the certifying agency i.e. Chamber of Commerce or Ministry
• f Trade designate (varies by country), that signs the Certificate of Origin
• Indonesia has MFN and GPT status

44 Most Favoured Nation Tariff Treatment

• Canada applies the

MFNTT, as a default tariff to goods originating from all countries which are members of the WTO

Special rates of duty through bi- or multi- lateral trade agreements

• Canada-Peru Free Trade

Agreement: Peru Tariff (PT)

• Canada-Jordan Free

Trade Agreement: Jordan Tariff (JT)

Rates of duty based on preferential tariff provisions

• General Preferential

Tariff (GPT)

• Least Developed Country

Tariff (LDCT)

• Note: To qualify for the

tariff treatment, goods must move from GPT or LDCT

Access the Canadian Customs Tariff Schedule

45

HS Code

Important Note: Where a country qualifies for multiple preferential tariffs, the lowest applicable tariff will apply Direct link: http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2014/html/tblmod-03-eng.html#s1

Preferential tariffs Based on GPT, LDCT or bilateral Free Trade Agreements (FTAs)

The following documentation is required to get your goods through the Canadian border:

Certificate of Origin (Form A) is needed to ensure that goods qualify for preferential rates of duty on qualified imports. This has to be verified by a designated official of the Ministry of Trade or of the Chamber of Commerce where applicable Customs Invoice is a legal document required by customs officials to verify the value, quantity and nature of a shipment. Bill of Lading is a legal document between the shipper of a particular good and the carrier detailing the type, quantity and destination of the good being carried. 47

Duly Prepare Export Documentation

Logistics: Identify the Best Modes of Transport

At highway border crossings, goods can arrive in conveyances such as tractor-trailer units hauling goods for multi- national companies and cars, vans, or pickup trucks that the small business owner may utilize. 27,608 km of core highway routes

At airports, commercial goods can arrive on commercial airlines such as Air Canada, on charter airlines such as Air Transat, or on dedicated parcel delivery airlines such as Purolator Couriers. Major airports are Pearson International (Toronto), Calgary International, Pierre Elliot Trudeau International (Montreal) and Vancouver International. 13 international airports

At train stations or rail yards, commercial goods can be transshipped in box cars, flat cars, hopper cars or tank

• cars. Major rail companies are Canada National Railway Company (CN) and Canada Pacific Rail.

48, 000 km of railway tracks At seaports, goods can arrive in cargo containers, which are then transferred onto rail cars or tractor units. Major seaports are Port of Halifax, Port Montreal (inland port), Prince Rupert Port Authority and Metro Vancouver 18 port authorities

There are a number of ways commercial goods can enter Canada, depending on how the goods are being shipped:

48

Next Steps for Your Business

1.

Register at www.tfocanada.ca/register.php to access online trade information

2.

Regularly update your supply offers in your TFO Canada dashboard

3.

Download the Access Canada: A Guide on Exporting to Canada and use as a guide to access the Canadian market

4.

Download the Market Information Paper for your sector and use to gather market intelligence

5.

Look up the regulations and tariff for your product using your HS code

6.

Identify potential Canadian buyers, exercise due diligence when choosing business partners, and answer all correspondence (email) you receive

7.

Attend a Canadian trade show for your sector

8.

Create and implement your Market Entry Strategy

49

Steven Tipman, Executive Director Zaki Munshi, Project Manager-Asia TFO Canada 130 Slater Street, Suite 1025 Ottawa, ON Canada K1P 6E2 T: +1 1613 233 3925 T: +1 800 267 9674 E: zaki.munshi@tfocanada.ca; steven.tipman@tfocanada.ca www.tfocanada.ca

Thank You!

Contact us: @TFOcan linkedin.com/TFOCanada

50 Canada-Indonesia Trade and Private Sector Assistance Project (TPSA)