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A $2000B opportunity for Canadian businesses

U.S. President Joe Biden in front on a train wagon

On March 31, U.S. President Joe Biden introduced the American Jobs Plan, a massive infrastructure proposal designed to boost economic recovery that outlines key federal public investments over the next eight years. The scope and ambition of the US$2000B plan invites comparison with the space race of the 1960s, the construction of the Eisenhower Highway System in the 1950s or even the war effort during WWII.

But it is not so much the price tag of the plan that is unprecedented so much as its stated goals. As the core feature of the Biden-Harris administration’s economic program, the American Jobs Plan aims not only to stimulate economic growth, but to do so in a fairer, more sustainable way. We’re not just talking about roads and bridges anymore; investments will focus on developing a greener and more inclusive economy, with provisions to support electric vehicles, public transit and climate change research and development.

What the plan means for Canadian businesses

The American Jobs Plan is a major opportunity for Canadian businesses. It earmarks billions to improve passenger and rail services, modernize public transit, build charging stations for electric vehicles, improve ports and waterways and invest in power infrastructure. In short, all areas where Canadian companies have significant expertise and industrial capacity.

Unfortunately, President Biden has made clear he wants American tax dollars to be spent on American products made by American workers. He reinforced this message during a joint session of the U.S. Congress.

So how can Canadian businesses get a piece of the pie? “Buy America” policies are nothing new, nor are they insurmountable. The Canadian government has fought for—and obtained—exemptions to these policies in the past. And the potential gains promise to be lucrative for Canadian businesses who will persevere: Success in tapping only a small fraction of this market represents a major growth opportunity for Canadian businesses, as well as an unprecedented chance to scale-up their international activities. Coordination between government and the private sector will remain paramount.

To illustrate: Accessing only 2% of the plan’s budget provision reserved for electric vehicles would represent US$3.5B in business, while accessing 2% of the budget dedicated to modernizing public transit and improve passenger and freight service would represent US$3.3B for Canadian train makers, rail operators or manufacturers of electric buses.

For Canadian businesses, the American Jobs Plan is a case where hitting small would mean winning big. Furthermore, help is available for organizations that will rise to the challenge.

Capitalizing on Canada’s U.S. trade network

So where to begin? The Government of Canada maintains an extensive network of trade offices spread across 15 major business centres that cover every state in the Union. Each office is staffed with trade commissioners with in-depth knowledge of local business, industries, regulation and markets and their job is to point out key opportunities to Canadian businesses.

Diplomatic relations are not limited to the federal level. States and provinces cooperate extensively, especially at the regional level. Some provinces maintain an official presence in the U.S., mostly to support business development. Québec, Ontario, British Columbia and Alberta have offices in the U.S. and also manage various support and incentive programs for exporters. Those used to the spectacle of federal-provincial squabbling will not find it south of the border. Federal and provincial representatives work hand in glove to advance Canadian interests in the U.S.

Once the current public health crisis is under control, expect the Canadian Trade Commissioner service and its provincial counterparts to relaunch some of the frequent and effective trade missions they were previously known to organize. Trade missions remain one of the most successful ways to open new export markets and expand existing activities. Furthermore, various support programs are available to Canadian businesses that plan to expand their export activities.

Engagement is key

Canada might be an official member of the G7 group of nations, but it barely ranks among the world’s ten largest economies. In the age of megacorporations with trillion-dollar valuations, Canadian companies can only hope to develop scale by expanding outside their limited domestic markets. And despite the growing importance of trade links with Asia and other emerging economies, the American market remains key to a successful international expansion.

Despite all this, it’s not always easy to get on decision makers’ radar screen—in Ottawa or Washington D.C. Sustained engagement with the federal and provincial governments can help your business unlock lucrative business in one of the world’s largest markets.

Reach out to our Public Affairs and Government Relations experts to learn more about how we can help. We have the expertise and reach to help you navigate the multifaceted nature of the Canada-U.S. relationship.

——— Mathieu Lalonde is a former Senior Consultant at NATIONAL Public Relations


Written by Gordon Taylor Lee

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January 25, 2021