By: Bill Macheras, Trade Commissioner, Global Affairs Canada, Ontario Regional Office – October 23, 2019
I recently visited London and even though it was a pleasure visit, it was painfully clear the Brexit issue has consumed the headlines of all media outlets and has successfully seized politicians of all stripes. However, interestingly, after the initial mention of Brexit in conversations, the substantive part of conversations turned to everyone’s take on the real prospects for the British economy. After you dug down, you found that Brits were not overly concerned about the Brexit issue – instead, they were quietly confident about the country’s medium and long-term prospects. And they are right to feel this way – Britain has a strong economy, diversified into many resilient sectors, and world-leading in some, such as the financial services sector. There was relative optimism the issue would sort itself out in the long run and that Britain has many friends (as it does) that are outside the European continent and that want to do more business. The USA is a prime friend, but so is Canada, with its Commonwealth partnership, longstanding ties, common language, similar culture and common business practices.
The UK is Canada’s 5th largest trading partner, with two-way merchandise trade totalling $25.5B in 2018 – greater than Germany, Netherlands or Belgium. It doesn’t stop at merchandise trade: the UK was Canada’s number two trading partner in services ($14B) and fourth largest in foreign direct investment/investment into Canada ($47B). The numbers speak for themselves, and they are steady and sure – it does not appear the Brexit fuss has had economic effect on trade and investment to date.
So there is indeed licence for Canadian firms to strategically dive into the UK and uncover the substantive opportunities that exist in the following major industry sectors:
Aerospace, Defense and Security: With the 2nd largest aerospace industry in the world, there’s a high level of international collaboration in the UK. In September, 2021, the Defence and Security Equipment International exhibition will take place in London and a Canadian delegation is expected. Interest in Canadian technology remains strong. In the aerospace sector, specific opportunities are found in: MRO, UAV’s, landing gears and composite materials. The Farnborough Air Show (July, 2020) is the major event in this sector in the UK.
Agriculture, Food and Beverages, including Fish and Seafood: The UK was Canada’s second largest export destination within the EU for agri-food products in 2017. Canada is the largest supplier of wheat to the UK, and the UK was Canada’s largest EU export market for fish and seafood products in 2017. CETA - the Canada-Europe free trade agreement - has provided increased opportunities for the sector and there are growing opportunities for Canadian wine and spirits.
Creative Industries: The Creative Industries sector contributed over £100B to the UK economy in 2017. The largest subsectors - creative tech, music, performing & visual arts, film/TV provide opportunities for Canada and there is a high level of interest in Canadian productions and content. In October, 2018, Canada hired a Trade Commissioner in London to be fully dedicated to this sector.
Education: Canada moved from 5th in 2015 to 2nd in 2017 after the U.S. as a study destination for U.K. students. There is also an increased interest in partnership opportunities. Specific opportunities exist in two areas: profiling and and showcasing Canada with UK educational institutions; and increasing the number of partnerships between Canadian and UK higher education institutions
Energy (Clean Technology, Sustainable Technology, Oil and Gas, Nuclear, Ocean Tech): With its heavy focus on energy efficiency, the U.K. is a prime market for Canadian companies in this sector. Canada and the U.K. share common interests in promoting energy security and decarbonisation, as outlined in PM May and Trudeau’s clean growth partnership. Canadian expertise can be applied in the UK in areas such as unconventional energy extraction, carbon capture and storage (CSS), and wave and tidal energy. In the nuclear sector there are opportunities around small, modular reactors in both Canada and U.K..
Financial Services and technology: As the global financial capital of the world, London is an important market for Canadian companies. The six large Canadian banks have a presence in the city, and Canadian pension funds, insurance companies, brokers, real estate developers, investment and asset managers, lawyers and an increasing number of Fintech companies are also active in London and other UK centres. Brexit uncertainty means many financial institutions are reviewing their operations, presenting opportunities for new Canadian supply relationships, as well as new investment, in particular in financial technology.
Information and Communications Technologies (ICT): The UK ICT sector is valued at £180B, sustains 1.56m jobs and comprises 58,000 active businesses. In the context of worldwide ICT procurement, this represents around 4% and within the EU, the UK remains the largest ICT market by value for Canadian exporters. Opportunities exist within these specific sub-sectors: IOT, Cloud Computing/Big Data (especially related to UK Government investments), Mobility, FinTech, AI and Cyber Security. Cyber Security: Valued at £2.8billion and mobile phone security is expected to be one of the largest markets over the next few years as more people start using mobile devices for mobile commerce (m-commerce).
Infrastructure: There are tangible opportunities for Canadian companies as investors, services or goods providers, particularly in energy, transportation and utilities Specific sub-sectors that show promise are: water; wastewater; green building and energy efficiency; as well as national heavy infrastructure such as the 600 projects worth $780B outlined in the National Infrastructure Delivery Plan
Life Sciences: The UK is home to one of the world’s strongest and most productive life science sectors and is a significant market for medical devices, health IT and related technologies. As the UK attempts to drive costs down in the National Health Service, sales of innovative technologies and medical devices represent areas of opportunity.
Science, Technology, and Innovation: The U.K. is Canada’s most important science, technology and innovation partner in Europe and second most important STI partner in the world, after the US. This importance is underscored in the comprehensive 2017 Canada-U.K. Memorandum of Understanding (MoU) to facilitate further bilateral STI cooperation. The MoU will see further collaboration amongst government bodies, knowledge-based institutions and businesses in the fields of science, technology, innovation and entrepreneurship with a view to accelerate the commercialization of emerging technologies and the growth of domestic firms. Initial priority areas of focus include clean technologies, advanced manufacturing, agri-tech, and quantum technology.
As you can see, the opportunities for Canadian companies in the UK are deep and varied. If you are an experienced Canadian company with a proven product, service or technology and would like more information or to be connected to these opportunities, please contact email@example.com
Bill Macheras is the Manager of the Info-Centre and a Trade Commissioner with Global Affairs Canada, Ontario Regional Office. He is based in Toronto and has been with the Department since 2004.
His team is part of the Canadian Trade Commissioner Service which helps Canadian companies to develop their business in the UK and around the world. Bill has successfully completed foreign assignments in several cities around the world including Athens, Warsaw and Budapest.
His previous work experience includes funds administration for Montreal Trust Co., legal work for a commercial law firm, and communications work with the planning, analysis and public affairs unit of Industry Canada.
Bill holds an Honours Bachelor of Arts degree from York University, a Masters Degree in Public Administration from Queen’s University and is also certified as an international trade professional (CITP)