A weaker Canadian dollar, lower energy prices and stronger growth in key
export markets are creating opportunities for small businesses to reap
the benefits of exporting
TORONTO, Oct. 28, 2015 /CNW/ - The time is right for small- and
medium-sized enterprises (SMEs) to grow their revenues, and support the
Canadian economy, by increasing their exports of goods and services
abroad, according to a new RBC Economics report entitled Doors open for Canada's SME exporters. With a weak Canadian dollar relative to the U.S., low energy prices,
and a growing U.S. economy, conditions are favourable for SMEs to
increase their export presence.
"Over the last decade, a number of factors including the 2008 recession
and a strong Canadian dollar led many exporting businesses to shut down
or look inward to the domestic market - but the landscape has changed
to become more favourable for exporters," says Gerard Walsh, economist,
RBC. "Considering the upside potential for business and overall
economic growth, there is an opportunity for small- and mid-sized
businesses to think beyond Canadian borders again if they aren't
Capacity to increase export presence
SMEs account for 25 per cent of Canada's overall merchandise exports and
in several industries, including information and cultural services and
a number of manufacturing sectors, their share is over 50 per cent.
Nevertheless, compared to other advanced economies, the share of
overall exports by Canadian SMEs is low, which suggests there is
capacity to increase exports amongst these businesses. Canada's 1.1
million SMEs, defined as businesses with fewer than 500 employees,
generate approximately 40 per cent of Canada's GDP, and created
two-thirds of net new jobs since the recession.
After peaking a decade ago, the number of SME exporters fell by 15 per
cent through 2010 and estimates suggest their numbers have not
recovered in the years since. Despite their diminished numbers, SME
exporters earn higher average revenues and are more likely to be fast
growing than their non-exporting counterparts.
"SME exporters tend to be more optimistic about their future growth and
more likely to invest than other SMEs," added Walsh. "On average,
Canada's small- and mid-sized exporters outspend other SMEs on
investments in machinery and equipment, research and development, and
Golden opportunity to accelerate growth
"This is a golden opportunity for small businesses who want to
accelerate their growth," says Sarah Adams, vice-president, Small
Business, RBC. "The higher revenues earned by SME exporters should
inspire other SMEs to grow faster by expanding exports, and market
conditions couldn't make it easier to start now."
Adams has three recommendations for business owners looking to expand
Explore financing from a variety of sources: Thanks to more business-friendly lending policies, fewer SME exporters
report financing as a stumbling block to their growth. Business owners
who have been holding back on exporting because of financing concerns
should inquire about government grants, commercial financing and trade
credit from suppliers.
Tap into government resources: Public-sector institutions like Export Development Canada (EDC) and the
Business Development Bank of Canada (BDC) offer education, export
incentives and financial services to help businesses expand globally.
Look for opportunities overseas: The recently concluded Comprehensive Economic and Trade Agreement (CETA)
with the European Union - Canada's second-largest trading partner -
offers new opportunities to SMEs as tariff and non-tariff barriers come
down. Agreements now in place with the United States, Mexico, Peru,
Colombia and South Korea, among others, are providing exporters with
improved access to international markets. Looking ahead, the
Trans-Pacific Partnership may create new opportunities for SME
exporters in the Asia-Pacific region.
About RBC Small Business Banking
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payment options and simple ways to manage their cash flow. Whether they
are starting a business, managing growth, or succession planning, the RBC Advice Centre or Starting a Business website can help answer their questions. Free interactive tools and
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-- as well as a mortgage relocation program, to help small business
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With the guidance of RBC business advisors, small business owners have
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and services. For more assistance, please visit www.rbc.com/startyourbusiness.
For further information:
For more information, please contact:
Lena Wan, RBC Communications, 416-955-6665
Romina Mari, RBC Capital Markets, 416-974-3558