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Successfully investing in Canada

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​​​​​​​​last updaten on 25 August 2023 | reading time approx. 3​​​ minutes​​​

 

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How do you assess the current economic situation in Canada?

Despite current economic headwinds, there are signs that Canada’s economy may stabilize in the medium term. Recent monetary policy easing, improved transportation infrastructure for oil and gas, interest rate cuts by the Bank of Canada, and government measures to support consumer spending are expected to contribute to GDP growth.

However, some economists caution that a recession may still be on the horizon—though likely less severe than previous downturns. Key contributing factors include:
  • U.S. tariffs affecting exports and business investment decisions,
  • rising unemployment projected to reach 7 percent,
  • and a decline in household spending.

Population growth is slowing due to changes in immigration policy. Combined with economic uncertainty, this has significantly reduced housing demand and brought the real estate market to a standstill.
Overall, the near-term outlook remains challenging.

How would you describe the investment climate in Canada? Which sectors offer the largest potential?

With pro-active government policies, rich natural resources, a robust financial system, adoption of innovative collaborative technologies, and a diverse talented labor market, Canada remains one of the most politically and economically stable countries in the world.

The top high potential sectors include:
  • Technology and innovation 
  • Healthcare and biotechnology
  • Green and renewable energy
  • Consumer discretionary
  • Real Estate and infrastructure
  • Tourism and hospitality

What challenges do German companies face during their business ventures into Canada?

Despite the generally favorable business environment, German companies expanding into Canada face a myriad of operational, regulatory and strategies challenges.
The top challenges for German companies in Canada include the following:
  • Trade Barriers and Customs
  • Cultural and market differences
  • Regulatory complexity
  • Talent acquisition and labor laws
  • Logistics & infrastructure
  • Economic and pollical uncertainty

What are the latest developments in Canada regarding labour laws, renewable energy policies, raw material regulations, and supply chain transparency?​

Labour Law Updates

Canada has introduced several progressive labour reforms at both federal and provincial levels:
  • Wage Transparency: Employers in Ontario and British Columbia must now include salary ranges in job postings and are prohibited from asking about salary history.
  • Expanded Leave Entitlements: New paid leave options include mental health days, caregiving, and pregnancy loss. Federally regulated employers must comply by December 2025.
  • Remote Work Rights: Employers must provide equipment, ensure data security, and support mental health for remote workers.
  • Strikes and Lockouts: During strikes or lockouts the use of replacement workers is prohibited by bill since June 2025.

Renewable Energy Policy Updates

Canada is accelerating its clean energy transition with major federal and provincial initiatives:
  • Clean Electricity Regulations: Finalized in December 2024, these aim for a net-zero electricity grid by 2050, promoting investment in wind, solar, hydro, and nuclear.
  • Federal Incentives: Include Clean Economy Investment Tax Credits and support for hydrogen energy and energy storage.
  • Indigenous Partnerships: Programs like Clean Energy for Rural and Remote Communities support Indigenous-led renewable projects.

Raw Materials and Mining Regulations

Canada is positioning itself as a strategic supplier of critical minerals:
  • Tax Incentives: Offered to boost domestic extraction of rare earths, nickel, cobalt, and lithium.
  • Environmental Regulations: New rules (effective October 2025) ban the manufacture/import of sealants with toxic substances like coal tar and PAHs.
  • Global Demand Shift: With China restricting exports, Canada is becoming a key alternative source for the EU and U.S..

Supply Chain Transparency Rules

Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act is now in full effect:
  • Who Must Report: Entities with a presence in Canada and meeting financial thresholds (e.g., 20 million US-Dollar in assets, 40 million US-Dollar in revenue, more than 250 employees).
  • What to Report: Only those producing or importing tangible goods must file reports; selling/distributing alone is no longer reportable.

In your opinion, how will Canada develop?

Canada’s economic growth is expected to stabilize around 2 percent. Inflation is also projected to reach 2 percent. The country is rapidly shifting to renewable energy and electrification, growth in AI adoption, clean technology and automation, an aging population and slower immigration. Canada’s role as a key supplier of critical minerals and clean energy is growing. These trends position Canada to attract more international investment and achieve long-term growth.

Government efforts on expanding affordable housing, affordable childcare, a fair and supportive national healthcare system, capped immigration and net-zero carbon commitments have made Canada one of the top destinations of choice. 

These forward-looking government measures coupled with a robust financial system and international trade agreements have enabled rising international investments in Canada, corporate mergers and acquisitions and cross-border collaboration.

With unparalleled access to stable infrastructure, competitive tax credits, a highly-skilled workforce and ongoing investment in R&D, domestic and international manufacturers who invest in Canada benefit from a business climate designed to support growth and innovation.

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