I had a business acquaintance at one point in my career who lived and worked in Canada. He would always sing the praises of the Land of the Long-Forgotten North. I always approached his cheer-leading with equal parts skepticism and doubt. Unbelief was the word of the day.
Let’s face it, most people don’t think of Canada as being ripe for starting a business when they set out to become an entrepreneur. The market is smaller, the population is smaller, half the country speaks another language and the Canadian government doesn’t seem to be inviting to businesses.
He ran a small business, let’s call him Jeremy, that sold customized gadgets used for playing popular video games. We were introduced through a mutual business friend who thought that Jeremy could do really well exporting his products into the United States.
The US is bigger, has more money and spends like no other country in the world. It made sense. Better than that, the dollar was really strong (and continues to be so) which made it all the more appealing to export products out of Canada.
The dollar is so strong now it’s like getting a 40% premium on items you sell outside of Canada! The Loonie is weak!
So, that begs the question. Is it smart to start a business in Canada if your sole aim is to export items out of the country, or are there more reasons why it makes sense to start a business in Canada?
Here are a few reasons why it’s smart to start a business in Canada – right now.
- Low Cost of Living – if you watch shows on The Discovery Channel and HGTV you might think that the cost of living is really high in Canada. What you have to remember is that the exchange rate makes most of those numbers a lot lower. A 600,000CAD house on House Hunters is actually $450,000 (which is still expensive but you get the point). Because the government carries the costs for so many items your discretionary money is actually a high percentage of your take home pay (i.e. profit).
- Weak Currency for Exports – If you’re selling within the country then you price your goods accordingly. But if you ship stuff outside of Canada you’ll be surprised that you can price in a similar “dollar” amount but be rewarded with a handsome bump when you exchange your currency. It makes for the perfect environment to export goods.
- Skilled Labor & Talent – there are many Canadians who are well-educated, very tech saavy and looking for work. Many of them aren’t willing to pay the high prices that come with working somewhere else (like the US) where their skills would be in demand but living there would be cost prohibitive. They’re freezing in the north just like you and willing to work!
- Access to Government Assistance, Tax Credits & Grants – The Canadian government encourages business development, especially R&D, and as such allows for grants and tax credits for new businesses. It’s a great idea to start & tweak your business to take advantage of free money.
- Flowing Seed Capital – There are venture capitalist all around. Some of them even live in Canada. They want to give back so they’re willing to fund startups in their home. Look for ways to get some of this capital.
- Entrepreneurial Knowledge Workers – Many workers choose to supplement their incomes and lifestyles with side hustles. If you find the right combination of hustle and employee you can get some great workers and maybe even find a partner.
- Low Trade Barriers – Like it or not, but NAFTA was more advantageous to Canadians and Mexicans than it was for Americans. But if you’re starting a business in Canada you can take advantage of this and move product back and forth fairly easily.
My friend was right, it makes a lot of sense to start a business in Canada. That’s why I’ll make the land of the north my second stop in my search for business ideas.
Here’s to the journey!