A new paper from The Conference Board of Canada warns that Canada is facing a dramatically different global economic and business world and can no longer rely on high commodity prices or traditional manufacturing for future export successes and wealth.
The report, Canada’s New Trade and Technology Paradigm: Finding the Right Policy Mix, highlights the need for Canada to position itself for a new trade era, characterized by a rebounding U.S. economy, the end of the commodity super-cycle and an acceleration of data-driven international business.
“The new global trade landscape raises new challenges for Canada,” said Glen Hodgson, Senior Vice-President and Chief Economist, The Conference Board of Canada. “It will no longer be enough to focus on tariff reductions to position Canada for export success.”
“Data will be a key asset of the future,” added Danielle Goldfarb, Director for the Conference Board’s Global Commerce Centre and co-author of the report. “Policies will need to place much more emphasis on the movement of data, people, services, and investment.”
The Canadian economy has been struggling in recent years with weak growth, due in part to the end of the China-driven commodity super-cycle. Fortunately, U.S. consumer demand is finally rebounding, which offers the renewed opportunities for sales growth to our next-door neighbours. However, to take advantage of these opportunities, Canadian industries will need to rebuild and invest in their exporting capacity.
At the same time, non-traditional trade has been on the rise; accelerating the movement of data, people, services, and investment. The ability to digitize information and send this data anywhere has meant any individual or small business has the potential to trade globally. However, this has also resulted in increased competition and firms have to be more nimble to compete effectively.
Digitization has also created new types of trade in digital products and services and is even permeating into traditional trade. In future, manufacturing and engineering companies that rely on “Internet of Things” sensors will become data companies at their core, with huge amounts of customer behaviour and logistics data. Those who can best leverage international data flows will be best positioned to take full advantage of global markets in the future.
Climate change and related climate policies are another factor that will shape Canada’s trade and supply chains. In addition to the environmental impacts, climate change and expected policy changes will create both challenges and opportunities for Canada’s trade – including fostering demand for green trade.