Financial Services sector in Canada
Canada’s political stability, diverse and export driven economy, skilled workforce, industry strengths and synergies, provide an array of opportunities for applicable UK financial and professional services companies interested in doing business in this market.
The Global Financial Centres Index (GFCI) ranks Toronto 10th, Vancouver 17th, Montreal 18th, Calgary 28th among global financial centres (March 2012). Toronto is considered Canada’s financial services centre and ranked third in the Americas after New York and Chicago. The TMX is ranked eighth largest stock exchange in the world by market capitalisation, CAD$1.8 trillion (September 2011). In 2011, the finance and insurance sectors contributed CAD$84B or 6.6% to Canadian GDP (Statistics Canada).
Banking: The Canadian banking industry is comprised of 23 domestic banks, 26 foreign bank subsidiaries and 23 full-service foreign bank branches (Office of the Superintendant of Financial Institutions – OSFI). In 2011, banks in Canada managed CAD$3.3 trillion in assets (Statistics Canada). Banks operate as:
Schedule I: Domestic banks authorised to accept deposits
Schedule II: Foreign bank subsidiaries authorised to accept deposits
Schedule III: Foreign bank branches of foreign institutions authorised to do banking business in Canada. These branches have certain restrictions.
UK banks with a presence in Canada include HSBC (Schedule II), which maintains the largest foreign retail bank presence in Canada, and Royal Bank of Scotland (Schedule III).
Insurance: In 2011, insurance carriers and related services contributed CAD$22.2B to Canada’s GDP (Statistics Canada). UK insurance entities with operations in Canada include Aviva, Lloyds of London, Standard Life, and Royal & Sun Alliance (RSA).
Pension Funds: Pension funds in Canada have become major investors across sectors including domestic and foreign investments in infrastructure, commercial properties/assets, and companies. Key players include The Canada Pension Plan Investment Board (CPPIB), Borealis Infrastructure (Ontario Municipal Employees Retirement System –OMERS), Ontario Teachers Pension Plan (OTPP). Each of these has offices in the UK to manage their UK/European investments.
Public-Private Partnerships (PPP)*: The market’s steady deal flow, local expertise, and stable economy are among the factors that continue to attract international players across the PPP spectrum. Foreign players have established a presence in Canada to serve the market, including UK companies such as Carillion, Turner & Townsend, Laing O’Rourke, John Laing, and Balfour Beatty Capital.
Financial and Professional Services for Creative and Knowledge Driven Sectors: Significant contribution to the economy and growing sophistication of the film and television industry, interactive media and game development sectors, and R&D intensive ICT and Life Sciences sectors have increased demand for related financial and professional services.
Opportunities range from traditional segments of the financial and professional services sector, such as banking and insurance, to niche applications, such as Public-Private Partnerships (PPP), and creative and knowledge driven sectors.
Opportunities exist to partner with Canadian investors and industry players to pursue joint investments/projects, in particular, infrastructure finance/Public-Private Partnerships (PPP), in domestic and third markets
Getting into the market
Routes into the market vary. Examples of potential routes include:
Establishing a local presence. For example, many financial services companies, such as banks and insurance companies, looking to enter the Canadian market are required to seek approval from the Office of the Superintendent of Financial Institutions .
Servicing the market remotely from the UK to end-user clients.
Forming partnerships/strategic alliances in-market. UK companies should take a medium to long term view to build local networks, for example, to be become part of a bidding consortium for public tenders.
In preparation for market entry, UK companies should consider:
Highlighting an established track record
Identifying and understanding existing competition in the market
Identifying Unique Selling Points (USPs)
Investigate and address any regulatory requirements
Evaluate route to market options, which may differ from market to market.
Able to demonstrate a commitment and have capacity to serve the local market.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
Canadian Council for Public-Private Partnerships (CCPPP) Annual Conference
26-27 November, 2012, Toronto, Ontario
Topics: Getting Started