Global Rewards within Reach

Dennis Fortnum Canadian Managing Partner, KPMG Enterprise

Many Canadian private companies view global expansion as a core business strategy. And it’s no wonder. The Conference Board of Canada estimates that more than $325 billion worth of goods and services flow to the US annually, representing 70 percent of Canada’s exports, but with rising public debt levels and a sluggish economy in the US, and a Canadian dollar at par thrown into the mix, our exports to the US have steadily fallen from their peak at 85 percent of total exports only 10 years ago.¹ In fact, in 2009, the number of Canadian companies exporting to countries other than the US rose to 43 percent of exporting entities, representing one quarter of total export value. The value of exports to the US, meanwhile, fell 29 percent to its lowest value in a decade and the number of companies exporting exclusively to the US fell to its lowest level since 1997.²

Although there are signs of recovery in the US – if slowly – Canadian companies are looking further afield for growth opportunities than their traditionally largest trading partner. They now look towards the BRIC (Brazil, Russia, India, China) countries and other emerging markets to expand their operations and sales efforts, and compete in an increasingly global economy. This shift is not surprising. KPMG’s 2012 Competitive Alternatives study of international business location costs finds that manufacturing in China costs more than 20 percent less than in the US and moving operations to India can save more than 60 percent in labour costs alone. And being closer to these growing economies has another key benefit. Ongoing investment dollars flowing into India and China are quickly helping to create a growing market of middle class consumers with disposable income that is billions strong.

The impact of the credit crisis in the Eurozone and the slow but steady growth of the Canadian economy, which the Conference Board of Canada forecasts at 2.3 percent for 2012 are also playing a role in the global strategies of Canadian private companies. The risk averse nature that Canadians are known for and that has served the country well throughout the economic turmoil of the last few years, continues to play a role in how private companies are expanding their footprints beyond our borders and is tempering their growth expectations for the near term.

The 2012 edition of the KPMG Enterprise™ survey of Canadian private companies examines these and other issues and reviews the progress these organizations have made since our last survey in 2009. It gauges the pulse of the global expansion efforts of private companies in Canada and explores the key factors influencing their strategies and successes. It examines the extent of their current reach and which jurisdictions are favoured. It also looks at the challenges and risks Canadian private companies are facing now and how they plan to grow their businesses and position themselves for their future on the global stage.

¹ Facing Up to the United States’ Economic Challenges, The Conference Board of Canada, July 2011, p. 6.
² A Profile of Canadian Exporters, 1996 to 2009: Highlights, Statistics Canada, January 2010.

 Articles in this issue

Succeeding beyond North American borders
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Watch out, world – Canada is on the move
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Transitioning to the new global operating environment
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Do you have a tax time bomb hiding in your inter-company dealings?
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Are you managing tax risk for your business travelers?
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Adding significant value through procurement
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 On Demand

Global Rewards within Reach

Listen to special guest Peter Hall, Vice President and Chief Economist at Export Development Canada (EDC) talking with Dennis Fortnum, Canadian Managing Partner for KPMG Enterprise about recent research results of mid-sized businesses based in Canada, The United States, Mexico and Brazil regarding their plans to move beyond traditional trading partners and markets.

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KPMG Enterprise is seeking stories of perseverance and adversity for consideration in the next edition of That’ll Never Work. Business lessons from successful Canadian Entrepreneurs.

Visit www.thatllneverwork.ca to share your business lessons and submit your story.

Order your complimentary copy of Canada’s number one nonfiction best seller That’ll Never Work.

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PRIVATE COMPANY SEMINAR SERIES

The Private Company Seminar Series - brought to you by KPMG Enterprise - features guest speakers and subject matter experts on business issues of specific importance to owners and executives of privately held companies in Canada. Held in different cities across the country, our complimentary interactive sessions can provide insight understanding to various approaches helping you to proactively capitalize on opportunities and address today’s business challenges. The Private Company Seminar Series will keep you up to date regarding hot topics, business trends and legislative changes that impact your operations.

KPMG Enterprise is dedicated to sharing knowledge and experience to help you enhance the growth and profitability of your business and mitigate your risks.

Browse the program schedules and register for any sessions of your choosing.

DEADLINE: Friday, December 7th, 2012

 QuantumShift™ 2013

10 Years Celebrating Canada’s Top Entrepreneurs

Call for Nominations

This year marks the tenth anniversary of QuantumShift™, a rigorous five-day leadership development program held at the Richard Ivey School of Business designed to help CEOs and business owners of successful private companies to maximize their growth opportunities. The program focuses on how to lead a business through exponential growth; how to attract and retain the best employees; how to uncover obstacles that may be limiting growth now, or in the future; how to value a venture and use strategies for moving from business plan to financial proposition; and how to build a broad network of entrepreneurial peers to share best-practices.

Co-founded by KPMG Enterprise™, QuantumShift is not only an outstanding executive development program – it has become an amazing peer network, made up of some of the top entrepreneurs. The QuantumShift Fellows network, a group that exceeds 350 across Canada, has become its own supportive network of leading businessmen and women building thriving Canadian enterprises and ventures.

Visit kpmg.ca/quantumshift to learn more about the program and the nomination process. Interested candidates can contact Paul Woolford or any member of the QuantumShift Leadership Committee for more information.

Business Adviser

October 2012

KPMG Enterprise™ is a network of professionals devoted to helping business owners and entrepreneurs grow thriving enterprises and build value in their business.

For further information about how KPMG Enterprise can help private companies, visit kpmg.ca/enterprise.

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