The Canadian Trade Commissioner Service
The Canadian Trade Commissioner Service (TCS) is a division of Global Affairs Canada that helps Canadian businesses conduct foreign trade. They have offices in 160 cities worldwide and a vast network of public and private partners.
If you are a business owner looking to expand overseas, the Trade Commissioner Service can assess your business, locate potential partners, and provide funding through the CanExport grant program.
Market Potential Assessment
The Trade Commissioner Service can evaluate your business and international expansion goals, and then provide a realistic assessment of your capacity to succeed in your chosen market.
According to Duane McMullen, Director General of Trade Operations at Global Affairs Canada, the best first step for assessing your company’s potential for international trade is an email.
“If they (businesses) could think of just a couple of paragraphs saying ‘this is our business, this is the value we offer our customers, this is why customers want to buy our stuff,’” McMullen said. “With that, it kind of sets us up, to figure out that business, maybe do a few phone calls of our own, in the market.”
McMullen says that even if the assessment doesn’t bear good news, it can still benefit business owners.
“The worst outcome is if they decide to go for it in a market and realize halfway through, after they’ve spent a lot of time and money, that they just don’t have the capacity to do everything that’s required,” McMullen said. “Having a good dialogue with us can avoid that.”
Matchmaking
Matchmaking connects Canadian businesses with foreign partners, and it is facilitated both through one-on-one sessions and at large trade shows.
McMullen describes international trade shows as “target rich environments”.
“You’ll see all your competitors, and you can learn a lot of from that,” McMullen said. “You’ll see a ton of customers, not just from that market, but it could be customers from all over the world.”
While trade shows offer many opportunities, Trade Commissioner Service assistance is limited.
“If you’re at a big trade show, if you’ve got 40 Canadian companies, it’s hard to give each one of those 40 companies the individual time and attention you’d like,” McMullen said.
One-on-one matchmaking sessions are advantageous for those looking for more personalized attention.
The Trade Commissioner Service takes Canadian companies on trade missions across the globe to help them meet potential partners and facilitate business in new markets:
For information on upcoming trade missions, check out CanadExport, TCS’s official magazine.
A Good Starting Point
All assistance offered by the Trade Commissioner Service is free. However, because of this, there is a high demand for these services, and trade commissioners cannot devote a lot of time to inquiries.
“We’re really good at the basic assessment, pointing them in the right direction, giving them good introductions,” McMullen said, “but when they need a lot more support than that, the financial support, or if they need say, a law firm, an accounting firm, a specific marketing and consulting firm… that’s not us.”
Thankfully, the Trade Commissioner Service can make those introductions for business owners.
“Think of us as being this pre-filter,” McMullen said, “for the overall contours of the market and the challenges needed to tackle it.”
Here is Francis St. Louis, director of Business Development for Defence and Security at Montreal Aerospace Firm CAE, speaking about how TCS can open doors in international markets for Canadian companies:
Export Development Canada
Export Development Canada (EDC) is a Crown credit agency that provides Canadian exporters with financing, insurance, and introductions to foreign partners.
Financing
Working Capital Finance: EDC can provide financing to meet operational demands.
Phil Taylor, EDC’s Official Spokesperson, says EDC can help, “If you need to ramp up because you’ve got a big quarter and you need to get more equipment, hire more people, that sort of thing.”
Canadian Direct Investment Abroad: EDC can provide financing if you need to set up a joint venture with a foreign partner or a sales office to satisfy the needs of a customer. EDC also finances the building of green fields—new factories or other facilities on foreign soil.
Buyer Financing: If you are selling to a foreign customer, and they don’t have the cash on hand to pay you, EDC can provide that company with a loan to complete the sale. Your customer then pays EDC back and EDC pays you directly.
Project Financing: If you are contributing products to a large project in a foreign country, EDC can put up financing for the value of your contribution.
Insurance
Credit Insurance: EDC insures orders with foreign buyers. If your customer doesn’t pay you, EDC foots 90 per cent of the value of the contract and chases down your customer for the other 10 per cent.
Political Risk Insurance: EDC insures foreign assets against political upheaval.
According to Taylor, “if anything happens to it (your asset), say the government seizes it, or if there’s a civil war and it’s damaged, we will pay out against that insurance claim.”
Bid Assistance
EDC can issue guarantees on project bids. Winning a bid on a project in a foreign market often requires a performance bond, which can be up to 30 per cent of the project’s worth. BDC will pay the value of that bond on behalf of a Canadian company, if they can’t deliver on a bid.
Matchmaking
EDC runs matchmaking sessions with the Canadian Trade Commissioner Service, to help Canadian businesses find foreign partners.
When a Canadian business approaches EDC looking for connections, EDC puts them in their system and then alerts the company when an opportunity surfaces that matches their exporting goals.
“Every time there’s a ping on something that they (Canadian companies) offer that some of these (foreign) companies are looking for, we go straight to them, we coach them, we help them get in there,” Taylor said.
Risk Appetite
One of the biggest advantages EDC has over traditional banks is their appetite for risk.
“We’re used to providing financing into Latin America and China, whereas standard banks, typically, they’re not going go that far afield,” Taylor said. “We do take on what is notionally more risk, it’s just that we’ve been doing it for 70 years, so it’s not risky for us.”
Preparation
For companies looking to take advantage of EDC’s services, Taylor recommends having a plan for how you are going approach doing business in a particular market, with the help of the free resources available at the Trade Commissioner Service.
Taylor said, “If you have that plan already built in, with intel on that market, I think you’re in really good shape for us to be able to put something together.”
Canadian Commercial Corporation
The Canadian Commercial Corporation (CCC) helps Canadian firms secure contracts with government buyers in foreign markets.
CCC makes these connections by interfacing government to government with foreign buyers, offering its services not just to Canadian firms but foreign government seeking Canadian expertise.
All contracts signed through CCC have the legal effect of being signed in the name of the Canadian government, something CCC says provides foreign government buyers with strong assurance, making the Canadian contractor in question a more attractive option. CCC acts as the prime contractor in these deals, and signs a sub-contract with the Canadian firm, flowing contractual commitments for the project down to them. As the project moves forward, CCC takes on the performance oversight and financial administration of the contract.
CCC has partnerships with EDC and TCS, and can help make introductions for exporters with both organizations.
Source: Canadian Commercial Corporation
If you are looking for a way to break into a foreign procurement market but don’t know where to start, CCC can be an invaluable ally.
