Island growth through exports
Recently, at many of the international and domestic meetings I attend, a recurring theme that comes forward is small- and medium-sized businesses’ (SMEs) economic contributions.
Sometimes, a sub-theme has been measured to support exports by these businesses, which could increase both their prosperity and their contributions to local, regional and national economies.
A 2016 Innovation, Science and Economic Development Canada report highlights small businesses’ contributions to jobs, GDP and exports. According to it, as of December 2015, P.E.I.’s 5,838 businesses with 1-99 employees, employed 32,800 Islanders. Its 83 businesses with 100-499 employees had 5,800 employees.
From an Atlantic Canada perspective, in December 2015, P.E.I. led in the number of SMEs per 1,000 of population aged 15+ years, at 48.7. New Brunswick, Newfoundland and Labrador, and Nova Scotia followed, at 40.0, 39.1 and 37.3. In fact, the Island’s number exceeded that of Canada, at 39.2.
In terms of small businesses’ contribution to provincial GDP in 2014, P.E.I. was again an Atlantic Canada leader, tying with Nova Scotia for a 26 per cent contribution by them to their province’s GDP. New Brunswick and Newfoundland and Labrador had percentages of 25 per cent and 23 per cent.
As a trading nation, exports are critical for Canada’s growth. While the ISEDC report doesn’t provide province-by-province data, it does indicate that — in 2014 — 11.5 per cent of Canada’s small and 28.0% of its medium-sized businesses exported goods and services, predominantly to the U.S.
According to ACOA’s research, many SMEs in Atlantic Canada prefer to focus on domestic markets, or perhaps to trade with the U.S. Also, research suggests that these SMEs tend to have limited ability to conduct market research and weather the risks that might arise in foreign markets.
While trade agreements that improve market access are a tool that help Canada’s businesses to export, other tools are also needed, especially for small businesses. Helping the Island’s SMEs to realize their goal to export, or to export more, would contribute positively to the economies of P.E.I., Atlantic Canada and the nation.
The Island government provides a range of tools. For example, Island businesses interested in exports might consider attending a March 8 information session at Charlottetown’s Rodd Inn. Trade Team P.E.I. is expected to discuss such issues as trade mission support, and access to market and trade research.
Also, for approved businesses, P.E.I.’s government covers up to 40 per cent of some costs of trade missions undertaken by the Island’s small businesses. Of course, the efforts of Innovation P.E.I.’s Global Trade Services division shouldn’t be forgotten as it works to make Island businesses become export-ready.
Federally, in addition to the government’s support provided to Innovation P.E.I., Global Affairs Canada’s Trade Commissioner Service is often described as a best-kept secret for traderelated assistance. Also, such entities as Export Development Canada, which provides such services as financing and trade knowledge, are among the federal organizations that help Canada’s businesses realize their export goals.
I encourage all Island businesses to consider exports as an option for growth.