As part of an ongoing effort to make Canada more attractive to new investors, the Canadian government rolled back its corporate tax rate on Jan. 1 from 18 percent to 16.5 percent. The tax cut, along with several other investor-friendly steps taken in recent months, could result in a spike in U.S. businesses seeking to expand north of the border.
“Canada’s business-friendly outreach presents a great opportunity for U.S. businesses,” says John Costanzo, president of Purolator USA, a provider of cross-border logistics services. “Canadian consumers have demonstrated an affinity for U.S. goods, and thanks to the strong Canadian dollar, consumers have the buying power to purchase those goods. But it’s important to remember that doing business in Canada is doing business in a foreign country.”
Costanzo says many questions must be answered before the first Canadian purchase can take place. “U.S. businesses have to identify a dependable logistics plan that is guaranteed to deliver in the Canadian market,” he says. “A hard look must be given to the U.S. and Canadian customs clearing processes. Also, have steps been taken for a returns management program.
Purolator maintains a distribution network throughout Canada that allows for guaranteed on-time deliveries. In addition, Purolator holds “trusted shipper” status in several key U.S. and Canadian border clearance programs.
Canada’s outreach to U.S. businesses comes as several large U.S. chain retailers already have expanded to the Canadian market. Victoria’s Secret, Juicy Couture, Gap, Banana Republic, Brooks Brothers and Bath & Body Works established operations in Canada in recent years. Others, including Target and J.Crew, have indicated plans to expand to Canada during 2011.