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Seizing Global Advantage

Canada in the Global Economy

The global economy has changed dramatically over the past decade. Fewer barriers to international trade and investment and major technological advances in transportation and communications mean commercial activity is increasingly taking place on a global scale.

Globally engaged companies are not only selling internationally, but also investing in production facilities and forming new kinds of partnerships with suppliers, producers, distributors and innovators located around the world. As a result, global value chains – in which the steps in moving a good or service from conception, design and production to the end user are dispersed across commercial networks that span the globe – are on the rise.

Global competition is also on the rise. New economic forces like China, India, Brazil and Russia have emerged. Home to some three billion people entering the global marketplace as consumers, these new powerhouses offer tremendous market opportunities for Canadian companies. As countries with advancing levels of industrialization, they are also increasingly competing with Canada for market share, investment and high value-added activities in global value chains. Longstanding economic powers like the U.S. and countries across Europe are responding to such rising competition by stepping up their own competitive strategies to ensure their businesses succeed on the global stage. As a result, governments are increasingly competing against one another to help their businesses and investors gain an edge in the race for market share, technological advantage, foreign investment and other global value chain opportunities. Canada must do the same.

The Government of Canada has pledged to improve Canada’s competitiveness and to support Canadian firms as they pursue opportunities in the global marketplace. Through its Global Commerce Strategy, the Government is taking action to:

Boost Canadian commercial engagement in global value chains;
Secure competitive terms of access to global markets and networks for Canadian businesses;
Increase foreign direct investment in Canada and Canadian direct investment around the world; and
Forge stronger linkages between Canada’s science and technology community and global innovation networks.

Global commercial engagement key to Canadian economic strength

Despite the weakening global economy, Canadian exports of goods and services climbed 5.2 percent to reach a record high of $557.9 billion in 2008. Canadian imports of goods and services climbed 6.3 percent to reach $533.3 billion.
Foreign direct investment (FDI) holdings in Canada jumped by 14.4 percent in 2007, bringing the stock of FDI in Canada past the half a trillion dollar mark. Nevertheless, the stock of Canadian direct investment abroad (CDIA) at the end of 2007 still exceeded foreign direct investment in Canada.