Exports extend beyond conventional cargo shipments, as intangible assets, notably services, contribute significantly to global trade. This article explores the potential for Canadian service companies to expand globally, leveraging the international export market to foster their growth.
In 2022, service exports comprised 12.1% of Canada’s GDP, reaching approximately $161.2 billion.
What It Means to Export Services
Any service provided by a person or a company from Canada to a person or company in another country can be considered a Canadian service export. Some examples include product design, marketing, transportation and tourism, consulting, software development and legal support.
Even some goods exporters can also be considered service exporters if the products include after-sale services. For example, if a company is globally selling tech goods such as routers or point-of-sale (POS) systems, there may be after-sale services involved such as maintenance, installation, and training.
Service Exports Since COVID-19
With COVID-19 restrictions lifted around the world, service exports became a key factor driving Canadian economic growth in 2022. Canada’s post-pandemic performance in the service export market outperformed other advanced economies such as the United States, Italy, Japan, and Australia.
The Canadian commercial services sector has enjoyed stable growth since the pandemic. Transportation and tourism did dip in 2020 and 2021, but in 2022 this industry became the main driver of export growth. The lifting of travel restrictions allowed travel services to reach $31.7 billion in exports – showcasing a 75% increase in growth from 2021.
Service Exports Create Opportunities
Historically, small-and-medium enterprises (SMEs) have led the service export market. Notably, small, and micro businesses (one to four employees) are more likely to export their services as compared to larger firms. Similarly, women-owned exporting firms are more concentrated in the services industries compared to men-owned or equally owned exporters.
Read our blog on the Top 4 Financial Resources for Women Entrepreneurs to kickstart your export business today.
CanExport Program to Fund Export Projects
As part of the CanExport SMEs funding program, a portion of eligible sales and marketing activities may be covered by government grants, particularly in high-growth priority markets and sectors. Successful applicants can receive up to $50,000 per application or up to 50% of costs covered.
Businesses should stay up to date on Canadian Exporting Global Trends to maximize their funding potential and visit our Business Expansion and Exporting Funding Directory for a full list of active Government grant, loan, and tax credit programs.
Learn more about how you can create your exporting plan and how funding can help offset a portion of those costs by downloading our free Accessing Grants for Export Activities slide deck.