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Sunday, October 20, 2019

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Executive Insider

The Investment Landscape in Canada

When business and financial newscasters report on the economic landscape of North America and what it means for the rest of the world, it is almost always centered entirely on the United States. This is of course not without justification, as the United States is still the largest nominal national economy in the world, and New York is the home of so many global financial institutions.

But that leaves Canada on the back-burner to the point where many investors do not even give the land of maple a second thought. Most people do not realize that Canada itself is still the tenth largest nominal economy in the world, so it definitely does not hurt to take a look at America’s northern neighbor.

In this article, we will examine their economic situation, how you may invest in Canada, and if you are still not confident, how you may best increase your chances for success with help from a leading Canadian robo advisor.

Welcome to Canada

In many ways, Canada can come across as basically the United States but a tenth of the size. That is certainly true in terms of the size of the population and the economy. Living standards are quite similar in both countries and English is the main language of communication amongst the majority of the population with a romance language being a distant second.

But there are many ways in which Canada is different from the United States. For one thing, it is significantly more dependent on global trade than its larger neighbor by virtue of having a smaller economy and internal market.

Because of this, the composition of the Canadian economy, while sharing some similarities with the United States and other advanced countries, is noticeably different in several aspects. Because of its much lower population density, Canada is one of the few advanced countries that is a net exporter of natural resources.

Canada has historically been the largest source of foreign oil to the United States, outpacing far larger producers such as Russia and Saudi Arabia. As a result of these dynamics, the Canadian economy is far more dependent on trade with the United States than the other way around.

Implications to the Investors

Compared to most advanced countries, Canada’s primary sector is significantly larger as a result of the resource extraction industry and the oversized agricultural export industry. This alone will change the type of investments available to Canadian as well as international investors. Canada tends to be more capital intensive in its economic operations than even other advanced countries.

Another factor to consider is the astounding degree to which the fates of the Canadian and American economy are intertwined. To be sure, the resource sector is relatively more exposed to the global economy, but the rest of the economy is very closely linked to America, which means any fluctuations in the American economy will undoubtedly be felt to the north.

On top of that, while Canada has as good a range of investment opportunities as most other advanced countries, it does not come close to the truly world class selection that America offers. Again, this is by virtue of America being ten times larger than Canada.

Lastly, there are some key differences in the tax laws of Canada as compared to the United States. They both carry different degrees in taxation levels across state or provincial lines, but the average rates of income and capital taxation differ quite noticeably, which might significantly affect investor returns either way.

How do I Get In?

Some people have the common misconception that it is difficult to invest internationally. While that might be true with some countries that have heavy capital controls, Canada does not carry that distinction. So, investing in Canada is quite easy for those who choose to do so.

There are a variety investment funds to choose from depending on what your preferences are. Some funds invest in a balanced way throughout the Canadian economy, whereas other funds are sector specific, usually in the resource sector.

Although traditional financial advisories are still quite prominent, online investing is becoming increasingly popular due to the lower management fees. And with technology constantly improving, the use of robo advisors seem poised to increase.

Invest In Canada Today

Ultimately, investing in Canada requires the same amount of due diligence required of any country. True, what you end up putting your money might be somewhat different, but the guiding principles are pretty universal. A balance of hunger and caution is always best.

So, it might be high time for you to give the cold North a shot. As Canada steps into its own in the eyes of more and more investors, people will be able to see what Canada truly has to offer. Who knows, maybe you will be surprised.


Have you read?

# Best CEOs In The World 2019: Most Influential Chief Executives.
# World’s Best Countries To Invest In Or Do Business For 2019.
# Countries With The Best Quality of Life, 2019.
# Most Startup Friendly Countries In The World.


The views expressed in this article are those of the author alone and not the CEOWORLD magazine.
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Anna Papadopoulos
Editor, writer, teacher, consultant. Advocate for plain language, journalism, free speech, and tolerance. Feminist. Based in Sydney, Australia.
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