In March 2019, Barcoding, Inc. – a supply chain automation and innovation company based in Baltimore, Maryland – jumped fully into international operations by expanding our offices into Canada.
As president, it’s been rewarding to witness the successes we’ve had so far in establishing Barcoding-Canada, with offices in Montreal, Toronto and Vancouver.
I believe we owe these successes to the lessons we’ve learned along the way. Our experience has led us to identify key best practices, new opportunities to pursue and challenges to avoid – all of which any business should consider for a seamless Canadian expansion.
Barcoding’s primary reasons for expanding into Canada were twofold: first, to provide a better level of service for customers based throughout North America, and second, to expand our business opportunities by entering a larger market.
A big country
We quickly learned that Canada’s 10 provinces each have thriving industries of their own, and any company setting up shop in the country should take note of the best location based on their business goals.
Ontario, for instance, leads the country in manufacturing, with automobiles as the biggest category. The province is home to Ford, Chrysler and GM headquarters, as well as a Honda manufacturing plant and the only Toyota plant outside of Japan.
In Alberta, the focus is oil and gas. New Brunswick is a hub for fisheries and seafood production. Nova Scotia is home to 40 percent of the country’s military assets and houses some of the world’s leading defence and security operations, including Lockheed Martin and General Dynamics.
Quebec rounds out the country’s leading provinces for concentrated industries with a strong aerospace community. Bombardier, the largest aerospace company in Canada, Pratt & Whitney Canada and Bell Textron all base their Canadian operations in Quebec.
When narrowing down the best location for operations, businesses should consider Canada’s immense geographic size. It’s 4,400 miles from St. Johns to Vancouver – that’s a thousand miles further than the distance between Seattle and Miami. Ontario is more than double the size of Texas. This translates to higher travel and shipping costs, so companies must budget accordingly.
Beyond location, it’s important to consider Canada’s policies as they relate to health care and monetary regulations. Canada has a public health care system, but private supplements covered by employers are the norm and should be accounted for in your budget. In terms of monetary policy, businesses need to identify which suppliers should be paid in U.S. currency and which should receive Canadian currency, creating separate accounts accordingly with the appropriate local banks.
Legalities
As with Canada’s policies, the country’s legal system also differs from the U.S. in notable ways that impact business. For this reason, U.S. businesses should first establish a Canadian corporation, which demonstrates a commitment to the market and allows businesses to better leverage tax laws in the U.S. and Canada.
Human resources and employment laws vary from province to province, so a company operating nationwide would need to tailor 10 employment agreements to each area’s specifications. Leveraging local legal counsel in the U.S. alongside Canadian counsel allowed Barcoding to successfully navigate these regulations – particularly because we worked with a team experienced in expansion incentives and energy credits.
Culture
Finally, respect for cultural differences goes a long way to establish trust as a company new to the country. One of the most apparent differences stems from language, as Quebec and Ontario are home to a significant population of French speakers. In these provinces, there are both legal requirements and an expectation of respectful awareness regarding language that businesses must embrace to successfully ingratiate themselves.
Other cultural differences may be subtle, but they are no less important. For example, we have found that the best approach is to “listen and learn” before imposing or explaining our ways of doing business in the U.S.
Most Canadians find imitations of their accent irritating, not endearing. And while Canadian society is diverse – particularly in Vancouver, Montreal and Toronto – hockey, traffic and the weather are almost always safe “ice breakers,” no matter who you meet.
To date, Barcoding’s expansion has been an incredible learning experience. Canada is a dynamic market filled with opportunities. I, along with my colleagues, look forward to learning even more about the geographic, financial, legal and cultural nuances of doing business on an international scale. We look forward to continuing our work with colleagues and partners in Canada to take advantage of the many prospects this market presents for future growth.
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Shane Snyder is president of Barcoding, Inc.
