In 2017, Canadian exports to the Middle East were $5.7-billion and imports were $6.3-billion. While not insignificant, these figures are tiny in comparison to Canada’s overall trade, at just 1 per cent. In sharp contrast, in the same year, Canada’s exports to the United States alone were $415-billion and imports were $288-billion, constituting 76 per cent and 51 per cent of Canada’s exports and imports, respectively.
There are many reasons for such an imbalance, including the size of the U.S. economy, its proximity, shared language and culture, and a free-trade agreement. However, there is another important reason: a lack of familiarity and understanding of the countries of the Arab world, which are distant and, in many ways, unknown to Canadian business. Given systematic negative and incomplete news coverage of the region, the perception that Canadian executives hold of the region is far from reality.
Enter the Canada Arab Business Council (CABC), a non-profit organization that works to build awareness and familiarity between Canada and the Arab world, and showcase the tremendous opportunities for collaboration and investment between the region and Canada.
This Middle Eastern economy is currently at US$3-trillion, which is more than 50-per-cent larger than Canada’s economy, and is expected to grow faster in the coming years. While there is turmoil in Syria, Iraq and Yemen, the vast majority of the Arab world is at peace, growing well, and investing significantly in innovation to diversify and modernize national economies. The International Finance Corporation (IFC), the private-sector lending arm of the World Bank, plans to increase lending to the region this year by around 20 per cent to US$2-billion, with a focus on infrastructure spending, particularly for renewable energy projects.
Canadian companies have much to offer a region looking to innovate in key sectors such as energy, infrastructure, health and education. Likewise, innovative startups in the Middle East and North Africa (MENA) region are looking for Canadian investment and partners to advance their businesses and contribute to long-term sustainable development. Many of Canada’s leading companies, such as Bombardier, SNC, SkyPower, Nutrien (formerly PotashCorp), EllisDon, Hatch, Blakes, Gowlings and BMO are already pursuing opportunities in the region. While these firms are finding significant success and opportunities, this is just the tip of the iceberg. There are vast opportunities in agriculture, finance, legal services and more.
Moreover, Canada is well placed to fill one need which is critical to social and economic development and that is education and training. The Arab world is very young by global standards, with high levels of unemployment. Institutions like LaSalle College International, Algonquin College and Colleges and Institutes Canada offer a model for modern education, which trains youth across all areas including science, engineering, mathematics, social sciences and business, in a way that meets priority labour needs in emerging sectors. With more ambition, Canada could establish a network of schools and colleges across the entire region, which would not only be profitable but would help to deepen regional understanding of our country and its values.
Given the importance of immigration to Canada’s own economic growth, Canadian schools would have an enormous impact on preparing students, professionals and immigrants for studying, working or living in Canada, not to mention enhancing the Canadian brand across the region. In turn, Canadians have much to learn about Arab countries’ institutions and culture that would further enable trade and investment. Investment in education in the region is an investment in youth, in the future and in stronger business ties. Building this relationship would create long-lasting cultural and business relationships that would diversify Canada’s exports and imports, and enhance our prosperity.
Walid Hejazi is a board member of the CABC, and associate professor of international business at the Rotman School of Management, University of Toronto.
Carmen Sylvain is a board member of the CABC, and former ambassador to Morocco and Colombia, and former assistant deputy minister for the Middle East and North Africa.