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BILATERAL RELATIONS CANADA - ITALY

 

BILATERAL RELATIONS CANADA - ITALY

Italy and Canada enjoy a longstanding friendship characterized by a shared history tracing back to the Age of Discovery and consolidated by the significant presence of Italian immigrants in Canada. According to the most recent official census issued by the Canadian government in 2016, over 1.5 million Canadians stated they have Italian origins, representing the 7th largest ethnic group in the country and about 4.6% of the entire Canadian population. Over the years, the cooperation between these two countries has grown steadily, in a vast arrays of areas, from science to politics, culture and trade.

To have a more thorough picture of the bilateral relations between Italy and Canada, you can check the website of the Embassy of Italy in Canada at https://ambottawa.esteri.it/ambasciata_ottawa/en/i_rapporti_bilaterali/

 

ECONOMIC AND TRADE RELATIONS BETWEEN ITALY AND ONTARIO (Sources: ICCO and ICE)

Over the past decade, Canada has consolidated the image of an economically stable country, with solid economic and financial foundations, with a still very high growth potential. The main driving force for the Canadian economy is the Province of Ontario, which represents the country's economic and trade engine. With over 38% of the entire Canadian resident population residing in this province, Ontario is by far the most populous of the Canadian provinces and territories (about 14.6 million inhabitants) and the one in which the Italian presence is most conspicuous (over 900 thousand Italian Canadian residents). Therefore, it is not surprising that Ontario is the main Canadian destination for the activities of Italian companies and the most important province in terms of trade between Canada and Italy: 51% of Italian exports to Canada are absorbed by Ontario, while 48% of Canadian exports to our country come from this province. As a demonstration of the importance that our country has in Ontario's economy, it should be emphasized that Italy occupies the 7th place among the importing countries for Ontario and the 10th place among the recipients of the export of this province.

Why Ontario? According to the ICCO, the considerable rate of higher education of the adult population in the province (close to 70%, higher than that of many advanced countries such as the UK, the US, Japan, and Germany) along with the convenience of integrated business costs contribute to make the province highly competitive and particularly attractive for companies and businesses that are willing to invest in Canada. In particular, the strong convergence between the new technologies and IT sector and the more traditional sectors allows investors in Ontario to benefit from a cost reduction of up to 45%. In addition, this province has one of the lowest manufacturing corporate taxes in North America (25%) and has introduced several tax incentives for businesses investing in its territory. The result is a clearly more advantageous quality / price ratio than that of similar areas in North America, such as Boston, New York and Washington.

The Ontario government's guidelines are to maintain low business costs, encourage hiring local workers and create a competitive advantage for the American and international market. The aim is to support the growth of companies and encourage foreign companies to move to the Province.

Among the various production sectors, Ontario excels in the manufacturing sector with an annuity of $ 43.3 billion in 2018. Precisely for this reason, trade relations with Ontario have been beneficial for Italy: 48% of Italian export to this province is made up of industrial machinery and 14% of vehicles, thanks also to the elimination of duties on machinery which, from a maximum of 9.5%, fell to zero.

According to ICE data, in the period between January and July 2019, Italy mainly exported machinery (CAD 548 million), pharmaceutical products (365 million, + 44% compared to 2018), automobile (253), beverages and alcohol (118), and perfumery / cosmetics (114). These five categories amounted to CAD 1.4 billion, equivalent to 50% of the total export from Italy to Ontario in the first seven months of 2019. Much of Ontario's exports to Italy are represented by pharmaceutical products (CAD 588 million), which make up 66% of the total export to Italy.

In addition, Ontario is the first Canadian province by GDP and, thanks to its strategically advantageous position in the heart of the North American free trade area, it offers several accesses to the US market. Investing in Ontario, therefore, in addition to giving the opportunity to take advantage of an ambitious federal development plan, provides access to a highly qualified market that integrates innovation and production in an excellent way to support the industry. It is no coincidence that many Italian companies and businesses have chosen to invest in Ontario. Among the largest are Ferrero, F.C.A., Mapei (construction chemicals), Campari, and Eataly.


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