Теги: CUFTA
Five reasons why Ukrainian IT companies should start their business with Canada

Business Insider, a US media resource, writes about a new popular trend in the North American IT market: more and more programmers move from Silicon Valley to Canada. More and more companies, including Facebook, Google, Lever, Postmates and Tile, have opened offices in Toronto.

The publication cites several reasons including high real estate prices in the United States and a tight migration policy that force global IT players to look for alternatives to attract foreign professionals.

Ukrainian companies should not stand aside global trends and actively seek opportunities for cooperation with the Canadian IT sector. Olga Shtepa, CUTIS Project Coordinator, highlights five key reasons why Ukrainian companies should start business with Canada.

  1. Growing demand for IT professionals in Canada

About 300,000 jobs have been created in Canada’s IT industry over the past 15 years.

The Information and Communication Technology Council of Canada (ICTC) estimates that Canada’s IT sector will need 216,000 skilled employees by 2021. At the same time, Canada will not be able to meet this demand on its own with its university graduates and migrants involved. Consequently, the role of IT services exports and outsourcing is growing.

  1. Market stability

With growing protectionism in the United States and significant restrictions on immigration policy, many employers there have faced problems hiring staff. Instead, Canada, known worldwide for its loyal immigration policy, is implementing the Global Talent Stream Program, which allows IT professionals from all countries to obtain visas under a simplified procedure. Relatively cheaper costs of housing in Canada and the high social standards guaranteed by the government can be added to that.

  1. High wages

Employees of IT companies in Canada earn about 80,000 Canadian dollars a year, which is 61% more than the economic average. During 2011-2016, the average salary in the IT sector grew faster than in other sectors of the economy – by 13% compared to 8.7%.

  1. The Corona effect: growing need for IT services

The world has faced an unprecedented situation where all economies, without exception, have been put on hold due to the pandemic. As they say, however, it was a blessing in disguise. Most services are provided online, and a new format of work from home is practiced around the world. For example, Facebook allowed employees to work from home until the end of the year, and Twitter does not plan to resume work in the office. This, in turn, has led to a significant increase in demand for services such as telehealth, distance learning, logistics, financial settlements and more – all this against the backdrop of the skyrocketing demand for cybersecurity services. In combination with the above advantages, the Canadian market creates unique opportunities for the development of IT companies, including those from Ukraine.

  1. Entering the North American market through Canada

Canada is perhaps the best country to fulfill the dream of many companies – to enter the global market. All of the above, however, does not mean that the road to the Canadian market is scattered with flowers.

As Canada is a global market, it will be necessary to compete not only with Canadian companies, but also with foreign players trying to get their piece of pie in the Canadian market.

High competition automatically means a high “bar” of market entry – it is necessary to comply with international standards, classifications and, finally, language requirements.

So we wish you not to miss the chance and use the existing opportunities wisely.

Source: Liga.net

Three tips for Ukrainian apparel producers from Canada

Canadian consumers spent CAD 36 billion on clothing in 2018. It is estimated that by 2023, the total apparel sales will reach CAD 43 billion. On average, a Canadian consumer spends CAD 974 a year on clothing.

Apparel imports in Canada have grown from $10.1 to 12.5 billion CAD over the last four years. The largest supplier of clothing to Canada is China. It accounts for more than a third of total clothing imports – CAD 4.8 billion.

Thanks to the Canada-Ukraine Free Trade Agreement (CUFTA) and the abolition of import duties, Ukrainian clothing has 18% preferences on the Canadian market compared to imports from such powerful global players as China. All this creates attractive conditions for encouraging Ukrainian clothing manufacturers to export to Canada right now.

Maria Guzman, TFO Canada Apparel Consultant, CUTIS Canadian Expert explains the specifics of the Canadian apparel market and provides three tips for Ukrainian apparel producers to succeed in Canada.

The CUTIS team at Apparel Textile Sourcing Canada, Toronto 2019

 

  1. Find your niche

There are 3 important factors for an apparel company that wanted to export its products – price, minimum quantities, and quality.

For Ukrainian apparel companies, price and minimum quantities are challenges which hard to overcome.

First, Ukrainian companies are too big or too small for the Canadian market. Even though some people think that Canada a big market, it’s not. In Canada, you just can’t find so many buyers, as in the US. The quantity Canadian buyers want to purchase is considerably small in comparison with large US buyers.

Second, Ukrainian companies just can’t compete with such countries as China, Vietnam, or Bangladesh in prices. So, they shouldn’t market their products comparing to China. What Ukrainian companies should do in that context? To find their niche.

Some Canadian companies, for example, Laura, don’t want to have all their product mix just from China or Bangladesh. They want to diversify their assortment with other countries. They know that Ukrainian production has very good quality and a good reputation from the past. Approximately 20 years ago many Canadian buyers cooperated with Ukrainian companies. Nowadays this business connection is rather small. However, I think that Canada-Ukraine free trade agreement is a good reason to “press the reset button” in business relations between two countries.

Exports to Canada is like a marathon, not a short-distance run. Ukrainian companies need to be ready to compete with the whole world.

  1. Understand the Canadian consumer mentality

I do advise foreign companies to start their business journey in Canada from market familiarization – companies need to know how a typical Canadian clothing store looks like. They need to come to Canada and look around. What is a prototype for a typical Canadian man and woman? They need to emerge into the market and learn local mentality.

Culture is a very key issue. Ukrainian companies need to adapt their collection. Clothing from Ukraine is very classic or too open/wild/sexy. Canadian consumers are looking for something in between.

Besides, it would be nice to mention during a meeting with a Canadian buyer – yes, I visited your store, I know how you present products, I believe that my product fits your store because of this, this and this, I know your target audience, etc.

A Canadian buyer may have 120 emails a day from companies looking for an appointment. It’s crucial to persuade that exactly your product is a perfect choice.

  1. Be ready for export activities

The North American apparel market is very trendy. Buyers are not looking for quality unless they are looking for certain brands. Regular buyers are looking for so call fast-fashion products. Every few months is a new collection. It used to be 4 seasons for buying clothing. Not anymore. Now there are 12 seasons.

To succeed in Canada, Ukrainian producer needs to find the right buyer, to knock to the right door. It’s a challenging goal.

If you find the right buyer, try not to lose your chance – get marketing material ready, make a price list in US dollars, update your website, etc.

A website should be in English with appropriate pictures – the Canadian market is extremely sensitive to gender issues. Good homework is the keystone to success in finding a partner in Canada.

Author: Maria Guzman, TFO Canada Apparel Consultant, CUTIS Canadian Expert

Source: epravda.com.ua

Canadian footwear market. What Ukrainian producers should take into account

The Canada-Ukraine Free Trade Agreement (CUFTA) has been in force between Ukraine and Canada for over two years. Under this agreement, most Ukrainian goods are not subject to import duties when imported into Canada. Benefits apply to shoes as well, averaging 18% of the customs value, which is our competitive advantage over such powerful global footwear suppliers as China or Vietnam.

Let’s try to understand how easy it is for Ukrainian footwear manufacturers to enter the Canadian market and take advantage of its competitive advantages.

Helicopter view

Canada’s shoe industry volume is expected to reach CAD 7.7 billion in 2019. In Ontario alone, one of Canada’s 10 provinces, there are 1,260 shoe stores.

During a year, an average Canadian family spends approximately CAD 624 on shoes, of which CAD 347 for women and girls, and CAD 277 for men and boys.

Canada is among the top five shoe consuming countries, with the lion’s share being imported. Last year, Canada imported 161 million pairs of shoes from China and Vietnam only (69% of total footwear imports).

The next group of major shoe-supplying countries for Canada are Italy – 8%, Cambodia and Indonesia – 4% each. The remaining footwear imports (15%) come from other countries including Ukraine.

Ukrainian company Belsta participated at Toronto Shoe Show

 

At the same time, Canada also successfully exports shoes. In 2018, shoe production in Canada reached CAD 458 million. Canada ranked 12th in the world of footwear exporters. About 90% of Canadian shoes were exported to the United States.

There are more than 120 footwear industries in Canada, mainly in Ontario (24), Quebec (22) and British Columbia (10). These are mostly small (up to one hundred workers) factories with modern equipment. In total, shoe manufacturing across the country employs about 1.4 thousand people.

Footwear preferences of Canadians

The Canadian footwear market is fairly conservative, especially with regard to winter models. Canadians have special requirements for winter footwear. As they joke, the Canadian year has only two seasons – winter and construction season, and both require good-quality footwear.

The frost-and-snow season in Canada lasts for five months. Therefore, winter footwear should, first and foremost, provide warmth, be waterproof and stability on slippery surfaces. In other words, consumer comfort determines the style of winter footwear.

Some winter footwear models in Canada have been consistently sold for decades. According to Andy Orchard, Cougar Shoes Inc.’s Sales Manager, red-tab winter boots have been in demand in the Canadian men’s, women’s and children’s footwear market for over forty years. “When I was 15 or 16 years old (40 years ago), everyone, absolutely everyone in Canada, wore those boots. The red tabs had to be outside in order to be visible. It was something like a uniform. This model of Cougar winter boots is in demand among Canadians to this day”, – he says.

Ukrainian footwear companies visited Cougar Shoes Inc. in August 2019

 

Ethnic diversity has some influence on Canadian consumer preferences. Especially in such numerous diasporas as Hindu or Chinese. Today, one of five Canadians is born outside Canada. By immigrating to Canada, people bring with them national habits or preferences from their countries of origin. First of all, it concerns traditional food, clothing, and footwear.

External influence on the market

The footwear market in Canada is significantly influenced by the US footwear market trends, which is almost 10 times bigger than the Canadian market. This is natural because about 90% of Canada’s population resides in the 100-mile strip along the US border, and the economies of both countries are closely related.

FN PLATRFORM Show in Las Vegas is one of the most important American footwear shows that determine shoe fashion in Canada. According to Tamara Szames, a Canadian shoe market analyst, the footwear shown at FN PLATRFORM in August will hit store sales next spring. She also emphasizes the increasing influence of fast fashion on the footwear market, especially for summer and sports shoes. This means that the “must-have shoes” that were just shown on the catwalk should be manufactured very quickly because “… if you missed the season shoes you may have missed the whole season”.

Canadians pay little attention whether the materials used to make shoes are natural or not. What is important is water resistance. This is one of the qualities of shoes in Canada that influences the buying decision. And this is not only for winter shoes. Don’t be surprised to read “waterproof” on sandals. The Canadian logic is: if you get caught in the rain in the sandals or stepped into a puddle, they should not get wet through or absorb water. Water should simply trickle down the sandals without creating discomfort.

Ukrainian waterproof shoes at Toronto Shoe Show

 

Recently the so-called “consumer fatigue” from Chinese imports has been increasing in North America. Many consumers are ready to refocus on other manufacturers if they offer comfortable and modern models at attractive prices. Quite often, a lower price is a determining factor for Canadians deciding to buy shoes.

This is what Ukrainian shoe manufacturers should take advantage of. Taking into account all the specifics of the Canadian market and offering an attractive price due to the absence of import duties, the Ukrainian shoe business has every chance to win its place under the changing Canadian sun.

Author – Valeriy Kokot

Ukrainian apparel producers in Canada: Five steps to success

Olga Shtepa, coordinator of the CUTIS project, explained the specifics of the Canadian apparel market and provided five practical tips for Ukrainian apparel manufacturers to become successful exporters to Canada

Canada is a northern country. Due to its mostly cold climate, it is a powerful player in the field of warm clothing and home to such well-known brands as Canada Goose, Mackage, Sentaler, Rudsak or Moose Knuckles. Canadian consumers spent $36 billion CAD on clothing in 2018. Apparel imports in Canada have grown from $10.1 to 12.5 billion CAD over the last four years.

This is definitely good news for Ukrainian companies because thanks to the Canada-Ukraine Free Trade Agreement (CUFTA) and the abolition of import duties, Ukrainian clothing has 18% preferences on the Canadian market compared to imports from such powerful global players as China. All this creates attractive conditions for encouraging Ukrainian clothing manufacturers to export to Canada right now.

Each manufacturer, of course, has its own path and understanding, but based on the experience of the Project, we suggest reflecting on the following basic steps to enter the Canadian market.

The first step is to have an English language website. A simple but user-friendly site that presents the manufacturer’s products and basic company information in good English is the only opportunity to make a positive first impression on international partners. Therefore, if you enter international markets or are interested in attracting foreign buyers you have to consider developing a website, though not an extensive, but at least a business card website.

Clear photos, fabric composition with descriptions of care options, existing sizes and prices are a small list of information you need online.

Price is the main and decisive tool in any market. Therefore, the second and very important step is the detailed and calculated price for your own products for export. It is quite difficult for an enterprise that does not yet have export experience. A detailed analysis of competitors’ retail prices for similar products in a potential retailer’s chain may be useful. You also need to have a clear understanding of further logistics and additional costs associated with shipping products to a buyer overseas (transportation, insurance, brokerage services, importer fee, etc.). Also, depending on who the Canadian buyer is – a big retailer or a small boutique – the retail price of the end consumer must be divided by 3 or 6 to get the approximate manufacturer’s price. Ukrainian manufacturers usually operate in US dollars or euros, so keep in mind the conversion rate of the Canadian dollar. It is also not necessary to include value-added tax into the export price calculations.

I recall a story told by a friend of mine who recently moved to Canada and found his first job. Responsible work in the office, a managerial position, a large company, so he preferred the classic tie suit. His Canadian colleagues were very surprised and kept asking him all day about the cause of such a solemn style. There were lots of options offered – from baptism to funeral, so the next day he was forced to change his “look” to a more democratic one.

It is also not customary to emphasize one’s high position in society or financial status by accessories such as precious watches, jewelry or expensive attire. Wealth is irrelevant, and the determining factor is the person and his or her success. Clothes should be, first and foremost, comfortable and neat, but also affordable. Therefore, Canadians usually buy a lot of clothes to be able to wear something new every day without spending a lot of time washing and ironing.

Canada is a multinational country that is made up of many groups, mostly ethnic, and all have different styles. Indeed, it is quite a common situation when people wear down jackets in combination with flip flops in winter, or shorts with fur winter boots.

In major cities, Toronto and Montreal, the entire transportation system and social infrastructure are designed to stay indoors for months: underground passage with shops and restaurants, direct exit from buildings to underground transportation stops significantly reduce the demand for heavy and warm winter clothing. Understanding these features and forgetting the stereotypes is the third step for a Ukrainian apparel exporter to Canada.

Step four is to get rid of misconceptions about your own products. Our manufacturers believe that it is enough to offer high-quality products made in Ukraine using state-of-art technologies with the equipment of well-known world brands out of natural fabrics in accordance with the latest European trends in fashion and it will be all immediately bought. This scheme may work in Europe, Asia or the Middle East.

The Canadian market is completely different. Canadian buyers have appreciated the quality of Ukrainian products during the CUTIS project trade mission. Ukrainian products compare favorably with competitors as they look modern and follow the latest fashion trends. According to an expert on the Canadian clothing market, Ukrainians can make even stockings look attractive.

In Canada, however, they prefer practical clothes that can be washed in a machine without further ironing – clothes made from fabrics with polyester, viscose and elastane. This saves time considerably. Clothes should be light, comfortable, sensible, inexpensive and, last but not least, attractive. It is not common here to consider purchasing a coat as a family investment. Canadians would rather buy a few less expensive wardrobe items than one thing they will wear for ten years to then preserve for posterity. For many Ukrainian manufacturers, especially those who have experience exporting and selling in international markets, this situation is an unpleasant surprise. Even the free trade agreement between Ukraine and Canada that provides for customs-free import of clothing made in Ukraine does not save the situation. After all, Ukrainian manufacturers have to compete with companies from India, Pakistan, China, whose products, though taxed, are still cheaper than Ukrainian.

Step Five: prepare for the presentation of your products to a potential buyer. It would seem nothing complicated. However, this is a very important step in finding orders in the Canadian market. Large Canadian buyers are “spoiled” and accustomed to queues of potential suppliers in their waiting rooms. For example, during the CUTIS trade mission, one of the well-known buyers said that they received an average of 180 emails a day with commercial offers from around the world. So you can imagine what an unusual offer and what quality that should be to get their attention! Businesses negotiating with Canadians should be well informed and aware of the smallest details of their offers. Awareness and honesty are highly valued. Canadians do not accept evasion from answers. Our favorite phrase “how much will you give?” works great in Odessa but is perceived as unprofessionalism in Canada. Parrying a question puts an end to any further communication. Even exchange of business cards has certain specifics, which many do not even know.

There is a logical question: since everything is so difficult, is it worth doing? What is so attractive about the Canadian market and why should Ukrainian manufacturers go there?

The Canadian market means, first and foremost, stability. Having got a new supplier, a Canadian buyer is inclined to cooperate on a long-term basis – for ten, twenty or thirty years, and this is by far not the most impressive duration.

The purchasing power of Canadians is much higher than that of Ukrainians or Poles. In 2018, for instance, Canadian consumers spent CAD 8,650 on goods and services (FMCG). Ukrainians, by comparison, spent only about CAD 4,000. Payments under the agreement with a Canadian buyer will be in freely convertible currency. In addition, Canada is the closest neighbor to the most economically developed country – the United States, and it is much easier to cross the southern border than to try making contacts in the US from Ukraine.

As part of its activities, the Project has produced a lot of practical and theoretical information that will be of use to any manufacturer planning to export to Canada. The most up to date are industry-specific manuals that bring together all knowledge base on the exports of footwear, clothing, furniture, goods and ICT services. If you need a “live” consultation you can contact the Canada-Ukraine Chamber of Commerce, which provides practical advice and consults on exports to Canada for over 25 years.

Ukrainian manufacturers have already achieved considerable success in making the products that meet high international standards, so now there is a little left to do: to offer it professionally to Canadian consumers.

Do you know what our main advantage is compared with Chinese, Indonesians and others? The ability to learn very quickly regardless of the internal or external circumstances. This is our main competitive advantage and the key to success.

Author: Olga Shtepa, coordinator of the CUTIS project 

Source: NV.UA

How Ukrainian IT companies succeed in Canada

Ukraine has a high quality and high capacity ICT sector specifically in software development fields, for example, artificial intelligence, robotic process automation, cybersecurity, high-level math-based technologies, etc. It’s exactly what the rest of the world needs to know.

Frankly speaking nowadays Ukraine doesn’t do a lot of trade with Canada in ICT. Considering the fact that Canada has a huge Ukrainian diaspora (more than 1 million people), the amount of business Ukraine does with Canadian partners is relatively small.

What are the main reasons and what Ukrainian companies can do to be successful in Canada?

Even though Canada is close to the USA geographically, but methods of doing business can be considerably different from the US market. Canada is much more relationship-based. Of course, Canadian business has experience in outsourcing ICT services from other countries, but significantly less than the United States.

Canadian companies are typically a bit more sensitive to risk.

That is one of the key challenges for Ukrainian companies in finding a partner in the Canadian market. It is a strong perception among Canadian small and medium enterprises that it’s not very secure to transfer data or provide access to corporate data to Ukrainian companies. For many Canadian clients, it is common as part of a business contract with a downstream client that their data can’t cross the Canadian border or certain international borders.

In this context, Ukrainian companies have a certain job to do – to convince the Canadian business community that it’s a safe business environment. I am sure that it’s an achievable goal over time, because cybersecurity is one of the Ukrainian’s strongest ICT sub-sectors.

Ukrainian companies should be ready to invest time, money and human resources in exploring the Canadian market. They need to avoid expectations that they take a flight, visit a trade show and immediately sign a million-dollar contract with the Canadian partner. Business doesn’t work like this in Canada.

Ukrainian companies of all sizes need to do their homework, need to prepare a detailed export plan, market research, and they need to identify who is a perfect customer for them in the Canadian market.

An export plan should be based on cost, quality, customer services, and other competitive advantages – not simply “lowest price” – there are other supply markets for ICT services that will always be cheaper.

Not all Ukrainian companies realize that Canada is the second-largest landmass in the world. More than 90% of our population live no further than 100 km from the US border. The country stretches more than five thousand km from east to west. Therefore, you are not doing business in “Canada”, you are doing business, for example, in the Greater Toronto area or Halifax or Vancouver. It’s important to do your research to discover where your perfect potential customer is located.

We have technology clusters which are well-known all over the world. Such clusters are concentrated in Halifax, Montreal, Ottawa, Toronto and Kitchener-Waterloo in the east, as well as in Calgary and Vancouver in the west. The Toronto-Waterloo Corridor is the second-largest IT cluster in North America (after California).

The Canadian market is rather competitive. Ukrainian companies need to be ready to compete not only with Canadian companies but also with main international outsourcing supply countries such as India, Philippines, and emerging South American markets such as Columbia.

Some Ukrainian ICT companies try to use the following strategy in negotiation with Canadians – tell me what you need, we can do all. It’s a common mistake. The only way to succeed in entering the Canadian market is to be focused and explore what it is that you are really good at – your company’s core value.

And last, but not the least: Price. Price is a factor, but there are other more significant factors in the decision-making process. Those are the quality, the expertise, the level of communication and responsiveness, and also the past experience and testimonials.

Reputation is a crucial factor.

Cost is a factor, but it doesn’t need to be 30% cost-savings. 5-10% cost-savings is enough, but it should combine with other value-added attributes. A competitive combination of these factors is what is going to win business.

From an interview with Theo Ward, CUTIS Canadian Expert, TFO Canada Trade Information Systems Specialist and Associate Consultant

Source: NV.UA

Why Ukrainian IT companies have great prospects on the Canadian market

Canada is a major player in the global IT industry. There is well-developed educational and research infrastructure that promotes innovation. R&D centers, commercialization and manufacturing are concentrated in high-tech clusters in major cities of Canada. The common features of these clusters are federal and provincial initiatives and grants, powerful research programs, collaboration with academic institutions and incubator resources for small high-tech startups. Such an innovative environment is particularly attractive to foreign investors who want to enter the market, become key players and minimize their training costs. Prosperous high-tech clusters also attract world-class talent from abroad.

Continued decline in the world oil prices is gradually shifting the balance of economic power in Canada from oil and mining to high-tech sectors of the economy. Thanks to the “soft” rate of the Canadian dollar, high-tech companies interested in economy and political stability started moving to Canada from the United States. The flagship in this process is undoubtedly the province of Ontario.

In fact, the Greater Toronto Area (Toronto with 25 smaller neighboring municipalities) is considered to be the country’s main high-tech hub rated next to the Silicon Valley of California, Boston, Seattle and Washington in the United States.

Thus, in January 2016, Google opened new ultramodern headquarters in the suburbs of Toronto – Kitchener, and Cisco Systems recently opened its new Innovation Center in Toronto. Blackberry also has its headquarters in GTA. In November last year, Microsoft announced its intention to open new headquarters in downtown Toronto and invest more than $ 570 million over the next three years. This is apart from the IBM, DELL, OpenText, Amazon, AMD, CityBank, TD, RBC, Accenture, CIBC and other offices, plus hundreds of high-tech startups lumped around Toronto.

IT industry clusters in Canada are concentrated in Montreal, Quebec, Ottawa, Toronto and Kitchener Waterloo in the East, as well as in Calgary and Vancouver in the West. The Toronto Waterloo Corridor is the second-largest IT cluster in North America (after California).

The sector’s rapid development generates certain competition among individual regional centers. For example, Montreal is currently ready to host IT professionals even by granting a permanent resident status. The only additional requirement here is the knowledge of French.

Canada’s IT sector is significantly different from that of Ukraine. Here, for example, there are many old men and women who still remember punch cards and floppy disks and can talk for hours about PL/I and Ada programming features that were used back in the 1990s. However, they are also well familiar with modern technologies and systems. Local experts are professional virtuosos in their narrow sphere, while Ukrainian specialists are do-it-all workers that see everything in a different way.

Also, the Canadian IT sector has a large proportion of women – about 63.4% according to official statistics. Most Canadian employers understand that the more diverse is labor force, the more innovative the company is and the better is its performance.

Diversity is a company’s large competitive advantage on the market and a guarantee of its successful development and welfare of its workers. The number of young people who work in the IT sector in Canada is only 6% (aged 15-24), while the share of people over 55 years is 13%! That is, Canadian employers are quite conservative and prefer more experienced employees.

The rapidly growing demand for technology specialists absorbs all talent in the country and is also fueled by immigration. In general, immigration in Canada is an integral part of strategic economic development, especially immigration through education, as this is the way to attract the most talented and promising specialists. According to some experts, approximately 216,000 new jobs will be created in the sector by the year 2021. Due to immigration and involvement of students from Canadian universities, the country will be able to meet only 30% of these needs. Thus, the conclusion is obvious: Canadian companies will look for opportunities to attract foreign professionals, companies and outsourcing. And this is a great chance for Ukraine!

Is Ukraine attractive for IT outsourcing from the point of view of Canadian companies? No doubt, it is! These are just a few arguments. First of all, Ukraine offers a good value for money. In Ukraine, labor costs are relatively low.

For example, Canadian ICT sector employees earn $ 80,074 per year on average, while the wages in the IT industry in Ukraine are about 20,000 – 30,000 dollars per year. In our country, IT sector is developing extremely fast. This means that companies can offer their customers competitive prices along with the highest quality.

For instance, the respectable international ranking of Global Innovation Index has included Ukraine in the top 50 countries in the IT field in 2017 putting it ahead of such popular IT outsourcing countries as India, Philippines and Brazil.

Another advantage of Ukraine is its startups. According to AngelList statistics, there are now 1,600 Ukrainian technology startups with an average value of $ 2.5 million and nearly 3,000 investors. With regard to Canada, these figures are more modest – 600 startups with an average value of $ 5.2 million and slightly more than 500 investors. Not only investors but also industry giants believe in startups of Ukrainian origin. For example, Amazon recently bought a startup called Ring with an R&D office in Ukraine. Another example is the startup called Looksery, which was founded in Ukraine and acquired by Snapchat. In addition, such well-known companies as Grammarly, Petcube, People.ai and CleanMyMac have also emerged in Ukraine and are used by clients from around the world.

Ukraine has a large number of highly qualified professionals, most of them are fluent in English. Today, our country ranks fourth in the world among the countries with the largest number of technical workers. In Ukraine, there are more than 90 thousand IT specialists, of which 50 thousand are software developers.

In addition, Ukrainian universities annually produce more than 38 thousand technical specialists. In general, 79% of people in Ukraine have higher education, and 57% of technical specialists have STEAM education (science, technology, engineering and mathematics).

According to experts, the number of web and mobile developers in Ukraine by 2020 will exceed 200 thousand. The community of Ukrainian developers is also very active as they regularly attend dozens of international conferences, exhibitions and training forums.

Therefore, despite the fierce competition from countries such as India and China, Ukrainian ICT companies have great chances to succeed in establishing partnerships with Canadian companies. For example, the successful collaboration of Canadian business and Ukrainian IT helped the Canadian Tire’s technological redevelopment. Established in 1922, Canadian Tire today offers residents of Canada a wide range of goods for home and entertainment, household repair and improvement, automotive and seasonal goods. In total, the company employs about 85,000 people, and its retail network consists of 1,700 stores. The corporation includes retail companies, financial services subdivisions and a national charity fund for engaging children in sports. The Company EPAM has developed the Canadian Tire Digital Commerce Project and provided a new experience for consumers who make online purchases through mobile applications and stores.

Today, many Ukrainian companies are interested in finding partners in Canada. There are many ways to do this including personal contacts and participation in various industry events: exhibitions, conferences, forums, etc., wherever there is an opportunity to present a company and its services and get new contacts (networking); as well as active use of social networks – LinkedIn (first and foremost) and Facebook – by participating in closed thematic groups of the geographic area where a company has interest. However, the company’s best advertising is its satisfied customers – better in Canada but also in the US, Australia or the UK. You do not have to ignore good old cold calls or emailing because you never know where you will meet a partner. The main things, however, are perseverance and consistency!

The first ICT mission in the framework of the CUTIS project (Canadian-Ukrainian Trade and Investment Support Project) will be held in April this year when 15 Ukrainian companies will visit Canada. Hopefully, they will be able to learn by their own experience of the existing increased demand for professional services and ICT sector specialists in Canada, contribute to the development of fruitful cooperation between the two countries and find reliable partners across the ocean.

Olha Shtepa, Coordinator, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: AIN.ua

What Surprises Ukrainian Food Exporters to Canada Should Be Prepared for?

The Canada-Ukraine Free Trade Agreement (CUFTA), which entered into force in summer of 2017, may potentially open a wide range of opportunities for Ukrainian exports. Now, there is just a little left to do – to take advantage of these opportunities.

Taking into account the fact that Canada, as well as Ukraine, is an export-oriented country, the issue of veterinary and phytosanitary control of imports is a serious challenge.

Canadians strictly control agricultural products crossing their borders, since the importation of a product contaminated by plant pests or pathogens compromises Canada’s own export potential and undermines safety of its citizens.

The Way to Canada

Safety guarantee of the imported goods in Canada has to be supported by:

1) phytosanitary certificate (for products of plant origin that are subject to quarantine);

2) veterinary certificate (for products of animal origin) issued by the competent authority of the exporting country.

The central authority that establishes veterinary and phytosanitary regulations for Canadian manufacturers and importers at the federal level is the Canadian Food Inspection Agency. This is essentially an equivalent of the Ukrainian State Service for Food Safety and Consumer Protection (SSUFSCP).

How does it work in practice? For instance, Ukrainian beef producer sees good prospects for selling its products in Canada. But for the importation to the Canadian territory the Canada Border Services Agency (CBSA) requires that the products have veterinary certificates.

The producer itself or together with the representatives of the respective association of producers approaches the SSUFSCP asking it to initiate the procedure for the approval of veterinary certificates for beef with the Canadian regulatory authority.

In line with the current Canadian official procedure, the Ukrainian party has to provide comprehensive information (questionnaire responses) regarding the legal framework, the competent authority network, the existing state control system and procedures, statistics in Ukraine, etc. Once the Canadian party has processed the information provided to it, the SSUFSCP and the concerned exporters undergo an audit by the Canadian regulatory authority.

Only upon the receipt of positive audit findings and approval of the veterinary certificate form for a specific product category, the SSUFSCP will be given permission to export the appropriate type of product.

It is worth noting that this procedure will not occur automatically, but should be initiated by the concerned Ukrainian producers.

It should also be understood that elimination of these barriers takes time, sometimes years.

Phytosanitary and Veterinary Certificates Approval Procedures

  1. Producer or association of producers sees good prospects for its products in the Canadian market and approaches the SSUFSCP.

  2. The SSUFSCP approaches the appropriate Canadian regulatory authorities and initiates the procedure of certificate approval.

  3. The Ukrainian party provides the Canadian party with all appropriate information on the product safety control in Ukraine.

  4. The Canadian regulatory authority conducts audits of the SSUFSCP and the concerned exporters.

  5. If the audit has been successfully passed, the SSUFSCP is entitled to issue appropriate certificates that are recognized in Canada.

The procedure for recognizing the control system as described above is applicable to both Ukrainian exports to Canada and Canadian imports to Ukraine. Presently, competent Ukrainian and Canadian authorities have approved 15 international veterinary certificates for importing to Ukraine.

Who is Next

However, Ukraine’s trade potential with Canada is much higher. In Ukraine, there is a strong interest in exports of poultry, packages of bees (i.e. live bees) and confectionery and other products to the Canadian market.

Efforts to open the Canadian market for Ukrainian chicken meat continue. In October 2016, the SSUFSCP submitted to the Canadian Food Inspection Agency under the Canadian Ministry of Agriculture and Food three requests for the accreditation of Ukraine to export poultry and poultry products to Canada. While in April 2017, an additional request was sent for the assessment of Ukraine’s status with regard to the export of bee packages to Canada. So far, the only response including additional questions and clarifications that has been received is the one related to the poultry meat. It is currently being processed by the SSUFSCP experts.

The Ukrainian dairy product producers’ will benefit from learning more about the Supply Management System that operates in Canada. This system is based on monitoring the dairy product consumption and a milk quota system for the Canadian farmers.

Canadians strive to satisfy the demand by the local dairy products to the extent possible. Insufficient amounts of these products are compensated through import quotas. Thus, even regardless of sanitary restrictions, market opportunities for dairy products in Canada are very limited.

Communication with the Canadian Food Inspection Agency has revealed that, currently, a ban has been put on the Ukrainian cereals imports to Canada. This is due to the fact that a few years ago, pests were found in one of the lots of imported Ukrainian cereals, although appropriate phytosanitary certificate had been provided.

The lifting of the ban requires additional communication between the relevant authorities of both countries. It is worth noting that the SSUFSCP has not received any requests to resolve this issue from Ukrainian exporters.

Things You Need to Know

Systematically organized information on the documents required to import food products to Canada can be found in the Automated Import Reference System (AIRS) at the Canadian Food Inspection Agency’s website.

It is important to remember that in Canada it is the importer who is responsible for the compliance of the imported products with the local legislation. To this end, a Market Access Secretariat has been established under the Canadian Ministry of Agriculture and Food, which through an ‘open window’ service operating as a publicly accessible e-mail server processes inquiries from Canadian businesses and provides recommendations on ways to access both the domestic and foreign markets.

It is also important that in the second half of 2018 legislative changes will come into effect in Canada that will change the approach to food safety control. These will be based on the risk analysis principle and the need for importers to obtain import licenses for the controlled shipments in the future.

Ukrainian exporters already now need to pay attention to the new Canadian preventive food safety controls.

The implementation of the Free Trade Agreement requires a systematic cooperation between Ukrainian and Canadian government authorities, which has become more active now. In November 2017, with the support of the Canada-Ukraine Trade and Investment Support Project the SSUFSCP delegation visited Canada and established important contacts with local regulatory authorities.

We are sure that in 2018 our joint efforts will make the Canadian market closer to Ukrainian food exporters.

Authors:

Boris Kobal, Director, Food Safety and Veterinary Service Department, State Service of Ukraine for Food Safety and Consumer Protection

Olena Kuryata, Chief of Unit for Foreign Relations and European Integration Deputy Chief of Directorate for International Cooperation State Service of Ukraine on Food Safety and Consumer Protection

Source: European Pravda

Ukraine and Canada have developed cooperation in standardization

We have another great news! On September 25, 2018, the UkrNDNC (State Enterprise “Ukrainian Research and Training Center for Standardization, Certification and Quality”) and the Standards Council of Canada signed an agreement on cooperation.

The agreement was signed during the ISO Week in Geneva (Switzerland). It is the result of previous agreements reached during the visit of the Ukrainian delegation to Canada in November last year. The trip of the Ukrainian delegation was supported by the CUTIS project.

The Standards Council of Canada accredits standardization organizations and compliance assessment bodies. It has accredited 10 standard development organizations in Canada.

The signed agreement includes, inter alia, the following important points:

  • Exchange of information related to standards development activities
  • Exchange of experience and the best practices of the activities of national technical standardization committees
  • Cooperation in the development and adoption of international standards
  • Exchange requests for information on the adoption of international standards in Canada and Ukraine
  • Sectoral cooperation in the field of international standardization and free trade

In summer 2018, the UkrNDNC also signed a memorandum of understanding with the Canadian Standards Association (CSA Group), which is a non-governmental standardization and certification body accredited by the Standards Council of Canada.

Cooperation between the UkrNDNC and the Standards Council of Canada will support the implementation of the Free Trade Agreement between Canada and Ukraine (CUFTA), which entered into force on August 2017.

It is not a secret that after the abolition of tariff barriers, it is the non-tariff requirements that are sometimes rather difficult to overcome. Accordingly, the compliance of Ukrainian products with the regulatory requirements of the Canadian market becomes the key issue for exporters.

More about standardization in Canada you can find here.

U CAN Export: F.A.Q.

Want to export to Canada, but do not know where to start? We have prepared the answers to the most frequent questions exporters ask us.

I would like to join the export support program U CAN Export? What should I do?

The CUTIS project has now completed the selection of the first wave of the U CAN EXPORT Export Support Program participants in four priority sectors: clothing, footwear, furniture, and confectionery. The final stage of selection of participants from the IT services sector will take place in the spring of 2018.

The selected participants, with the support of Canadian industry consultants, are preparing to participate in exhibitions in Canada throughout 2018. Applicants who were not selected were included in the reserve of the participants of the U CAN EXPORT program. They will have a chance to take part in an integrated level of the program in the future, as well as take advantage of all the opportunities of its educational/consultational level. The rotation of the companies will take place after the project’s cooperation with the current program participants will be completed.

If your company is not among selected ones but wishes to enter the U CAN Export Support Program, please fill out a short application form here. The selection of companies from the reserve will be conducted on a competitive basis, by filling out special questionnaires, interviewing company representatives and visiting applicants’ production (if needed).

After completing the application, your company will also be included in the CUTIS project exporter database and will receive information and training materials, invitations to trainings and other project activities.

My company is not in the priority sectors. What should I do?

For companies in all other sectors, we have developed a step-by-step export guide to Canada I CAN EXPORT. It covers most of the issues faced by exporters, such as:

  • consumer preferences of Canadians
  • search for partners in Canada
  • the procedure of crossing the border and the requirements for the documentation
  • regulatory constraints on the Canadian market
  • logistics, etc.

Also, our project is currently developing an export portal with useful information for Ukrainian exporters.

We encourage you to subscribe to our Facebook page, where we constantly publish interesting information on trade with Canada and announce all our events. You can also subscribe to our e-mail newsletter.

I want to get a comprehensive help to enter the Canadian market. Who should I contact?

Unfortunately, our project does not have the resources to systematically help all the companies that contact us. However, there are other organizations that have a lot of experience in helping Ukrainian companies to enter the Canadian market.

For example, you can contact the Canadian-Ukrainian Chamber of Commerce (CUCC), which is a partner in implementing our project. CUCC has been supporting trade and investment development between Canada and Ukraine for more than 25 years and has offices in Toronto, Alberta and Ukraine. The Chamber organizes business forums, trade missions and conferences in Canada, promotes business contacts between the two countries, has partnerships with Governments of Canada and Ukraine, and provides a wide range of assistance services for Ukrainian exports to Canada.

Follow CUCC on Facebook

Life-hacks to successfully negotiate with a Canadian partner

In Canada sellers are fully responsible for the quality of the goods on their shelves. Therefore, Ukrainian companies that work with Canadians have to follow the regulatory and certification requirements closely.

Musthaves for exporters

To get your goods to the supermarket shelves, you have to ensure 101% compliance within the letter of the law. The requirements are quite strict in Canada. Automated Import Reference System (AIRS) may help to learn all regulatory requirements for the food products. You need to enter the product code or name and the website will automatically generate the list of requirements.

If entrepreneurs intend to supply non-food products to Canada they will have to study sector-specific legislation. No single magic portal contains all the information.

Also, there is a number of “voluntary-compulsory” certificates in Canada. In this market, sellers bear full responsibility to end consumers for the goods on their shelves.

Sellers are interested to have not simply good but the best products, which are fully certified and safe.

I, therefore, recommend exporters to start reviewing GFSI certification right away, as it includes the following certificates: BRC global standard for foods safety Issue 6; FSSC22000; SQF code 7th Edition Level 2; IFS Foods Standard Version 6; Global Aquaculture Alliance Seafood BAP Seafood Processing Standard. These are the certificates that will make your goods much more attractive for retail chain representatives. It is hard but necessary.

In addition, large Canadian supermarket chains often require their suppliers to go through a corporate social responsibility (CSO) audit before the supply of goods. Canadians are known to be “moral buyers”. Canadian business prefers the suppliers who do not violate labour, gender or human rights. Nevertheless, few Ukrainian companies can boast of something else within the CSO framework than charity campaigns or formal policies.

Veni, vidi, vici 

As a rule, Canadian companies plan their meetings well in advance and will not meet you at inconvenient time even if you need it urgently and “it will take only five minutes”. No cancellation or force majeure, unless you want to lose your partner’s trust.

Based on my practical experience, it took 5 months to organize a meeting of Ukrainian food manufacturers with a supermarket chain in Canada. The Canadian party’s timetable is booked for months to come.

In 99% of cases, the first meeting is held personally: no Skype or teleconference. If you want a result, you will have to travel to Canada. The meeting itself goes quickly and intensively. You must take product samples with you. Most likely, the importer will ask you of the possibilities to change the products: packing design, labelling, taste line, frequency of supplies.

The first meeting may last 7 to 30 minutes. The first contact is the indicator of interest. If a company manages to catch the interests of Canadians their quality and safety specialists will need to analyse the samples in detail.

After the meeting, there may be two possible case scenarios. Under the negative scenario for the Ukrainian company, it will hear of the Canadians’ decision within a month or a month and a half; a positive outcome will, most likely, be known within about a year.

First scenario: the products have been tested and they are not different from those of the existing supplier. This means there is no sense to continue negotiations. A letter on such a decision will come, as a rule, 1-1.5 months after the meeting. The answer is usually straightforward: “Thank you, but our company decided to extend its contract with the existing supplier”.

Second scenario: the partner liked your products but this is only the beginning of further work. Depending on individual Canadian food importers, the working process with supplying companies takes 2 months to one year between the discussion and negotiation and the first supply of your products to the supermarket or warehouse.

As soon as the importer confirms its intentions, you will be entered into the internal system and an individual project will be launched with a dedicated manager. Further, step by step, you will be discussing prices, mix, packing, design and batch volumes over the phone or Skype.

In addition, a schedule is mandatorily developed for provision of necessary start-up documents. For instance, a future supplier should submit a third party insurance agreement, a goods insurance agreement, a confirmation of the goods’ compliance with Canadian organic standards. It will take time and financial resources to compile and coordinate those documents. This is a part of the process, however, and one may only get the goods to the supermarket shelves upon successful passage of this phase.

Author: Olga Vergeles, Project Manager, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: Delo.ua