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SME’s willing to pay more and buy Canadian

Almost two-thirds of Canadian businesses would rather pay more to buy materials from Canadian suppliers than source less expensive goods from overseas manufacturers, according to UPS Canada survey.


December 16, 2010
by PLANT STAFF

MISSISSAUGA, Ont.: Almost two-thirds of Canadian businesses would rather pay more to buy materials from Canadian suppliers than source less expensive goods from overseas manufacturers, according to a Leger Marketing survey conducted for global logistics company UPS Canada.

The third and final phase of a series of surveys polling 300 businesses across industry sectors, including manufacturing, shows 63% of them would prefer to support domestic enterprises even at the expense of their profit margins

UPS said the numbers corroborate data from previous phases of the study that showed almost 40% of small to medium-sized enterprises (SMEs) believed they should confine their commerce within Canada to sustain the country’s currently strong level of competitiveness. Fifty-one per cent believe Canada should establish tariffs to discourage overseas exporters from accessing the Canadian market.

“While it is inspiring to see that Canadian businesses are so inclined to support their compatriots, it’s also a bit of a red flag,” said Pat Stanghieri, vice-president of marketing for UPS Canada. “The reality is that competing businesses based in other countries – including the US – are leveraging the lower cost of goods and labour in emerging economies to achieve competitive price advantages.”

The Leger study also found 55% of all the businesses (large and small) are unwilling to invest at all in internationalizing their businesses. Stanghieri said 43% of SMEs think global trade is something in which only large corporations engage.

To counter the growing penetration of foreign companies into the Canadian market, 50% of companies with at least 100 employees said there should be more private and public investment in innovation to increase productivity. That compares to 27% who said nothing should be done to counter the penetration of foreign companies because their investment is a net benefit for Canadian business prospects.

A focus on manufacturing value-added and high-tech products to counter the traditional reliance on natural resources was cited as the most effective means of countering Canada’s current trade deficit. The second highest number of respondents called for more government-generated incentives to get business involved in trade.

The Leger survey was conducted from Nov. 8 – 29, and has a maximum margin of error of +/- 5.7%, 19 times out of 20.
PLANT STAFF