Machinery Sector

If your company is in Canada’s machinery manufacturing sector, Canada’s free trade agreements (FTAs) and foreign investment promotion and protection agreements (FIPAs) are creating opportunities for businesses like yours. Canada’s expertise in machinery and equipment is fuelled by robust education and R & D infrastructure, ready access to major international markets, and strong demand from domestic industries such as agriculture, mining, forestry, aerospace, automotive, oil and gas, chemicals and plastics.

The world understands that Canadian machinery manufacturers produce quality products worth investing in. At the end of 2011, Canada’s machinery and equipment manufacturing sector had attracted $3.3 billion worth of foreign direct investment, 38 percent more than in 2005. Canada is the first country in the G-20 to create a tariff-free zone for industrial manufacturers, providing a perfect environment for increased Canadian participation in global value chains. These factors are making Canadian machinery companies more competitive exporters in markets beyond the United States. Machinery exports to countries such as Brazil, Peru and Chile reached an all-time high in 2011.

With nearly 7,500 companies, a direct-production labour force of more than 113,000 people, sales of $29.7 billion in 2010 (including exports of 18.9 billion), Canada’s machinery manufacturing sector is an important part of the Canadian economy. That is why the Government of Canada is ensuring that the needs of companies in this sector are reflected in bilateral government-to-government commercial agreements such as FTAs and FIPAs.

For example:

  • Canadian negotiators on the Canada-European Union Comprehensive Economic and Trade Agreement are seeking better access to the machinery market in the European Union (EU). Current EU tariffs on industrial machinery average 2.1 percent, with peaks of 8 percent. These tariff barriers would be eliminated under an ambitious Canada-EU trade agreement.
  • The Canada Peru Free Trade Agreement (implemented in August 2009) eliminates tariffs of up to 12 percent on Canadian mining and oil and gas equipment. Peru has Latin America’s largest reserves of zinc, lead, silver and gold, and it needs a wide range of mining equipment (borers, crushers, drills and specialty vehicles).
  • The Canada-Colombia Free Trade Agreement (implemented in August 2011) eliminates tariffs on Canadian exports of most exploration, mining and oil and gas equipment.
  • The Canada-Jordan Free Trade Agreement (implemented in October 2012) eliminates all tariffs (of up to 30 percent) on Canadian mechanical and electrical machinery. Particularly valuable opportunities exist for Canadian exporters of equipment for heavy construction, mining, communications, filtration and purification, as well as components such as taps and valves.

For more information about new international business opportunities and how Canada’s FTAs and FIPAs can help your company in a particular market, please contact a trade commissioner or check out the Trade Commissioner Service website.