May 23: What Opportunities Could Brexit Provide for Canadian Businesses?
With its Brexit vote in June 2016, the United Kingdom voted to leave the European Union.
The decision immediately sent shockwaves throughout the entire world.
In Canada, economic experts began weighing the impact Brexit decision has on Canadian businesses.
Many people focused on the potential negative impacts.
While this is normal after any major worldwide financial news, should Canadian businesses take a similar, negative outlook on the future?
Rather, can Canada’s businesses take advantage of emerging opportunities in the wake of the Brexit vote?
Brexit’s Impact on CETA
Immediately after the Brexit decision, concerns were raised about whether CETA would be affected.
CETA (Comprehensive Economic and Trade Agreement) had been in the works for over seven years, and the Brexit vote held up its signing day.
However, in October 2016, Canada and the European Union signed this trade agreement between the two parties.
CETA loosens the reigns on tariffs for Canadian goods exported into the EU.
Prior to CETA, 25 percent of Canadian goods held duty-free status when exported to the European Union.
Now, 98 percent of Canada’s exported goods hold this advantage.
This directly helps all types of Canadian businesses looking to become more competitive inside the EU.
Businesses selling products as varied as maple syrup, fish and machinery already benefit from the reduced tariffs.
Canadian export businesses now have the opportunity to expand upon their current EU territories and/or add brand new markets.
Canada’s service providers gained a large competitive advantage with the passing of CETA.
The world’s largest importer of service businesses is the European Union.
The EU’s top service imports are financial, management and communications/information technology services.
These sectors just happen to be among the top export services coming out of Canada.
Other important Canadian sectors that stand to benefit from the CETA agreement are engineering, architectural, and the research and development services.
Based on the information surrounding CETA, Brexit has had and will continue to have little impact upon a bright export outlook for Canada’s export industries.
The future looks brighter when you factor in that Canada’s exports to Britain prior to Brexit made up less than 3 percent of all Canadian exports.
Financial Services Industry Still Looks Solid
After Brexit, many people worried about Canadian banks doing business in the United Kingdom.
According to an update from Scotia Capital Inc in June 2016, Canaccord Genuity Group Inc, the Royal Bank of Canada and the insurance company Great-West Life faced the most exposure to any possible impact as a result of Brexit.
The Royal Bank of Canada, for example, says it continues to monitor what’s happening in Britain during this post-Brexit time period.
The central bank commented that it is confident that Britain will continue to support current clients and employees no matter what happens concerning the Brexit situation.
Also, the RBC said it remains “committed to future growth in the region.”
Hot Canadian Real Estate Market
Another business sector that’s set to remain strong in spite of Brexit is Canada’s hot real estate market.
Experts predict that the country’s real estate market will strengthen as mortgage and interest rates remain low.
There is concern about housing remaining affordable, but Canada’s real estate professionals should see significant growth moving forward.
Universities Getting Top-Notch Talent
Combined concern over the U.S. 2016 presidential election and Brexit created an unexpected advantage to some Canadian universities.
Leading scholars from both Britain and America have reached out to universities north of the border as professors and researchers seek work there instead.
People tied to academia call this influx of talent unprecedented.
Canada is receiving requests from scholars ranging across all disciplines and demographics.
This includes people holding post-doc, mid-career and superstar status.
Most of these scholars work inside the areas of science, engineering and math.
This influx may pay large dividends long-term to Canadian businesses as some of this new talent potentially moves into corporate positions.
Possible Business Opportunities in Britain?
Another way some Canadian businesspeople might eventually benefit from Brexit is to export their services in the future.
Currently, the United Kingdom is experiencing the loss of some highly-skilled workers.
Most especially, this is happening inside the healthcare and financial services industries.
Britain needs to replace these top-notch positions.
Businesspeople in Canada have an opportunity to become replacements as experts in their fields.
Other areas where Canadians may have a chance to move into vacant United Kingdom positions include consulting and other service-related industries.
Brexit brought great uncertainty to world economic markets.
In many ways, that uncertainty still exists nearly a year after the vote.
However, instead of the gloom and doom that was initially reported across the globe, it appears that positive opportunities are available across several economic sectors.
This is a time for Canadian businesses inside all industries to explore ways they can take advantage of the situation.
Opportunities abound through the export of goods or services, as well as hiring a new influx of intelligent people looking to build a career inside Canada.