FREE ESSAY ON INTRNATIONAL MKT RESEARCH CANADA

INTRNATIONAL MKT RESEARCH CANADA

TABLE OF CONTENTS
Preface
Introduction
Canada -- USA's Largest Trading Partner
NAFTA
Introduction
Exporting Guidelines
Incentives
Customs Contacts 
Trade Contacts 
Company Specific -- Massasoit Machine, Inc. 
Manufacturers' Representative 
Recommendations
Appendices
A Country Data 
B Canadian Domestic Economy 
C Canadian Trade Statistics 
D Canada - New England Trade Summary, 1997 
E NAFTA: A Partnership at Work 
F (SIC-3081) - Machine Shop Industry 
G List of Major Industries for SIC-3081 (Machine Shop) 
H Internet Access for International Business, Economics, 
Marketing and Trade Information
PREFACE
Massasoit Machine, Inc. requested the Rhode Island Export Assistance Center to perform a
research study of the Canadian market for its product as a first step in the
consideration of an increased effort to expand their market in Canada. If successful this
could provide a methodology to address other international markets.
This report presents the results of this research study. It includes an overview of
Canada and of the market which Massasoit Machine, Inc. could address. It includes a
comprehensive presentation of the North American Free Trade Agreement (NAFTA) which is an
agreement between United States, Canada and Mexico that provides almost unlimited access
to these markets for American manufacturers. It also provides details of the custom
requirements and procedures for exporting to Canada.
A number of key contacts, manufacturers', distributors are listed. Also presented are
details of the Canadian machine shop industry.
INTRODUCTION
Canada -- USA's Largest Trading Partner
The trading relationship between the United States and Canada is, by far, the largest in
the world. Two-way trade in goods and services accounts for approximately US $1 billion
per day, every day of the year. The U.S. share of total Canadian import is about 71
percent and the United States remains by far Canada's largest export market, taking 76
percent of total Canadian exports. Economic growth in Canada is projected in the 3
percent range in 1997 and 1998 -- good news for U.S. exporters! Housing starts, retail
trade and automobile sales have been particularly strong sectors in the first quarter of
1997, and domestic demand is expected to be its strongest in years throughout the first
half of 1997. In addition, machinery and equipment investment should remain strong as
ongoing upgrading of Canadian manufacturing plants and equipment continues. Despite some
well-publicized trade disputes, overall market conditions are unlikely to experience any
significant changes. U.S. Companies will continue to find Canada, the largest trading
partner, an extremely attractive and easily accessible place to do business.
With a population of about one tenth of that of the United States, the Canadian economy
mirrors that of the United States in approximately the same ratio, and has developed in
many ways along similar lines. This has made Canada an ideal export and investment
destination for many U.S. companies that have found an environment and marketplace very
similar to that of the domestic United States. Country specific information about Canada
has been annexed as Appendix A.
We believe that for the export-ready U.S. firm, Canada First is an appropriate approach.
Canada offers an ideal first stop for U.S. businesses seeking to begin export marketing,
with business practices, attitudes, conditions and environments here more similar to
those found in the United States than in any other country in the world.
Proximity to the United States also reduces a company's time and expense while exploring
opportunities in Canada. Notwithstanding these similarities, however, some cultural and
linguistic differences, which vary across each of Canada's five distinct regional
markets, allow first-time U.S. exporters to develop an appreciation of the complexities
of overseas marketing. Experience gained here can provide a solid basis for success in
markets worldwide. Canadian Domestic Economy - Appendix B gives a glimpse of the Canadian
economy.
Best Prospects for U.S. Firms
Business opportunity in Canada falls within virtually the full spectrum of industry and
agricultural sectors, and in virtually every business activity. More specifically,
however, the five top best prospect sectors for U.S. products include: computers and
peripherals; computer software; telecommunications equipment; automotive parts and
service equipment; and pollution control equipment. Geographic proximity, cultural and
historic ties, and strong awareness of business and other developments in the United
States are key accelerators for the sale of U.S. goods and services in the Canadian
market. Third-country competition tends to be far less prevalent in Canada than in most
other international markets. NAFTA helps U.S. exporters in the Canadian market relative
to their competitors from Europe, Asia and elsewhere.
Beginning of January 1, 1998, there has been introduced a duty-free trade between the
United States and Canada under NAFTA. Third-country competition is most often found in
product areas where labor constitutes a significant part of the cost of production, and
where domestic U.S. industries are less competitive. In other sectors, however, U.S.
dominance remains almost a fact of life, and third-country competition is most prevalent
in specific cases rather than across the board. Appendix C on Canadian Trade Statistics
is attached as a ready reference. Trade Summary between Canada and New England is
presented as Appendix D.
Generally, Canadians have strong national pride, and will often favor Canadian products,
especially if they offer similar features at a similar cost to those from the United
States. This is particularly true for any government procurement, local or federal, not
covered under either World Trade Organization (WTO) or North American Free Trade
Agreement (NAFTA) rules. Nevertheless, competition in Canada is generally fair and, as
noted above, U.S. firms that can offer technical, cost or feature advantages over locally
produced goods can do as well in the Canadian market as they can in the domestic U.S.
market.
NAFTA (North American Free Trade Agreement)
Introduction
The North American Free Trade Agreement (NAFTA) between Canada, the United States and
Mexico entered into force on January 1, 1994. Designed to foster increased trade and
investment among the NAFTA partners, the Agreement contains an ambitious schedule for
tariff elimination and reduction of non-tariff barriers, as well as comprehensive
provisions on the conduct of business in the free trade area. These include rules
regarding investment, services, intellectual property, competition and the cross-border
movement of businesspersons.
. The NAFTA has improved Canadian access to the U.S. and Mexican markets and enhanced the
attractiveness of the Canadian economy to foreign investors. Since the NAFTA's entry into
force, Canadian exports to those markets have shown impressive growth, and foreign direct
investment in Canada from all sources has increased steadily.
More importantly, the NAFTA and its predecessor, the Canada- U.S. Free Trade Agreement
(FTA), have stimulated significant advances in productivity and specialization within the
Canadian economy, and have promoted greater economies of scale, product quality, and cost
competitiveness. The result has been improved competitiveness of Canadian exports of both
goods and services.
Total trade is a key driving force for economical growth and employment creation in an
open economy such as Canada's. The ratio of exports of goods and services to gross
domestic product (GDP) in 1996 was 38.4 percent, making Canada's economy the most
globally integrated of all G-7 countries.
After three years of implementation, the NAFTA has further advanced existing trends
toward market convergence in North America. This is demonstrated by the figures for 1996,
which show $388.3 billion in total Canadian two-way trade with our NAFTA partners, over
$200 billion in outward and inward foreign direct investment, and over $50 billion in
trade in services between Canada and the United States. These figures indicate that
important markets for a wide range of goods, services, financial resources, and
technologies already exist and have prospered in a well-integrated commercial
environment.
The detailed report NAFTA: A PARTNERSHIP AT WORK by the Department of Foreign Affairs and
International Trade (DFAIT) of the Canadian Government is annexed as Appendix E.
EXPORTING GUIDELINES
Entry and Documentation
The Canadian Customs Service (Revenue Canada) requires the following documentation for
export:
-  Customs Invoice or its equivalent (for imports valued over C$1,200) 
-  Certificate of Origin:
Certain controlled imports are subject to import license requirements. Goods may be
cleared at customs ports on the border or, if intended for inland destinations, may be
forwarded in bonded carriers to the port or city nearest the destination at which customs
examination may be made and duties and taxes paid. In addition, under Canada's Release on
Minimum Documentation (RMD) Policy, shipments can be allowed into Canada to be released
before goods is classified for duty. When a shipment arrives at a port, an RMD package is
presented to Customs to obtain a release. Fully rated documentation, with payment of
duties and taxes must then be presented to Customs within five business days following
release. This facilitates rapid delivery since product classification and payment of
duties and taxes can take places after the goods have been released from Customs.
Tariff Classification
Tariff classification is based on the Harmonized Commodity Description and Coding System
generally referred to as the Harmonized System.
Valuation
Canada has acceded to the GATT Customs Valuation Code that provides that the customs
value of imported goods shall be the transaction value. The transaction value generally
will be accepted by Canadian Customs if the goods are sold for export to Canada and if
the price paid or payable for the goods can be determined. Ad valorum duties are assessed
on the CIF value of the imported merchandise.
Temporary Entry
Revenue Canada has made specific provision for the temporary entry of certain goods into
Canada for various purposes such as testing, demonstration, and display. Such goods may
enter under an ATA (Admission Temporary Admission) Carnet or under a Temporary Admission
Permit (Revenue Canada, Customs and Excise Form E2913) and may require either a
refundable deposit or a proportional duty deposit, depending on the appropriate
classification determined by Canadian customs regulations. Firms wishing to admit
machinery and equipment, display equipment, and other items covered under Canadian
temporary importation regulations are advised to contact Revenue Canada well in advance
of shipment or arrival in Canada. 
-  Free Trade Zones and Warehouses
Except for one special trade zone at the Sydport Industrial Park in Cape Breton, Nova
Scotia, Canada has no free ports or free trade zones. At present, there are no federal or
provincial laws specifically governing the establishment and operation of such zones.
Sufferance warehouses under private ownership have been established for the storage and
deposit of all imports received by various transportation modes, pending customs
examination and clearance. An entry for consumption or into bonded warehouse must be
presented to Customs within 30 days. Goods may be entered into customs bonded warehouses
without the payment of duty but must be cleared either for export or Canadian consumption
within two years. Additional periods are provided for certain goods by regulation. Goods
exported from bonded warehouses to third countries are subject to Canadian export
regulations. Repackaging and sorting can be carried out in customs bonded warehouses with
the permission of Canada Customs, but assembly or other industrial activity is
prohibited.
Special Requirements 
Labeling, Marking and Packaging Requirements
The three main pieces of legislation that regulate almost all product labeling and
marking in Canada include: the Consumer Packaging and Labeling Act; the Weights and
Measures Act; and the Agricultural Product Standards Act. Canada requires bilingual
labeling (English and French) for most products. Bilingual designation of the generic
name on most prepackaged consumer products is required by the federal Consumer Packaging
and Labeling Act identified above. Under this act the following information must appear
on the label of a consumer good sold in Canada:
-  Product Identity Declaration
-  Net Quantity Declaration
-  Dealer's Name and Principal Place of Business
Canada Customs also requires an indication of the country of origin, such as Made in the
USA, on several classes of imported goods and on all printed matter. Goods not properly
marked cannot be released from Customs until suitably marked. The goods can be marked, at
the importer's expense, either on Canada Customs premises or on the importer's own
premises under the supervision of Canadian customs officials. The Province of Quebec
requires that all products sold in that province be labeled in French and that the use of
French be given equal prominence with other languages on any packages or containers sold
in Quebec stores. The Charter of the French Language requires the use of French on
product labeling, warranty certificates, directions for use, public signs and written
advertising.
Technical Standards
Under the aegis of the Standards Council of Canada (SCC), several private standards
writing organizations administer technical codes and standards for areas ranging from
electrical and plumbing products to health care technology. These organizations include:
-  The Canadian General Standards Association
-  Underwriter's Laboratories of Canada
-  The Canadian General Standards Board
-  The Canadian Gas Association
The Canadian federal government also has numerous commodity standards to safeguard the
public welfare. Standards organizations try to avoid duplication of responsibility, but
there is some overlap. Under NAFTA, the basic rule is that standards must not create
unnecessary barriers to trade. To reduce such barriers, the NAFTA applies basic
principles to bilateral trade:
-  Testing facilities and certification bodies are treated in a nondiscriminatory manner
-  Federal standards-related measures will be harmonized to the greatest extent possible
-  Greater openness will be provided in the regulatory process
Restricted or Prohibited Imports
Certain commodity such as oleomargarine, reprints of Canadian copyrighted work, and some
game birds cannot be imported into Canada. Other goods are controlled, regulated, or
prohibited under legislation failing within the jurisdiction of other government
departments. Examples of regulated goods include: food products, clothing, drug and
medical devices, hazardous products, some offensive weapons and firearms, endangered
species, and motor vehicles. Other items are regulated under the Export and Import
Permits Act and require an import permit or certificate to be eligible for importation
into Canada. The Act lists various agricultural products, a number of clothing and
textile items, and certain steel products. 
Export Controls
Canada limits the export of goods in circumstances of surplus supply or depressed prices;
restricts the export of softwood lumber products; ensures that there is an adequate
supply and distribution of any article; enacts intergovernmental arrangements or
commitments; and ensures that military or strategic goods are not exported to countries
or destinations representing a strategic threat to Canada.
INCENTIVES
Trade Agreements and Preferences
Canada, the U.S., and Mexico are members of the North American Free Trade Agreement
(NAFTA) which took effect on January 1, 1994. One of the main provisions of NAFTA is the
elimination of tariffs on goods qualifying as North American under the rules of origin.
Canada is a member of the World Trade Organization (WTO) and is a founding member of its
predecessor, the General Agreement on Tariffs and Trade (GATT).
Drawback
Canada Customs honored two types of drawback for US exporters. The first, a home
consumption drawback, was designed to help manufacturers meet foreign competition by
granting them relief from a portion of duties on specific imported good's used in Canada.
The second type of drawback, an export drawback, was designed to help Canadian
manufacturers compete in foreign markets, by removing internal Canadian duties and taxes
from the cost of Canadian goods exported. Drawback of 100% duties and sales taxes is
granted on imported goods reexported in an unused condition and on imported goods
incorporated into Canadian manufactured goods that are subsequently exported.
CUSTOMS CONTACTS
Department of Foreign Affairs and International Trade Export and Import Controls
Bureau 4C Lester B. Pearson Building, 125; Sussex Drive,
Ottawa, ON K I A OG2
Phone: (613) 992-1363)
Revenue Canada Ottawa Regional Customs Office 2265 St. Laurent Boulevard Ottawa,
ON K I G 4K3 Phone: (613) 993 -0 530 4
NAFTA information Desk
Revenue Canada Customs, Excise and Tax
1st Floor, 555 Mackenzie Avenue
Ottawa, ON KI A OL5
Phone: (613) 941-0965; Fax: (613) 941-8138
The Director: Policy and Administration
Antidumping and Countervailing Division
Revenue Canada Customs, Excise and Tax
191 Laurier Avenue, W.
Ottawa, ON K I A OL5
Tel: (613) 954-7251; Fax: (613) 941-2612
The Secretary, Canadian International Trade Tribunal
365 Laurier Avenue, W. 
Ottawa, ON K I A OG7 
Tel: (613) 993-4601; Fax: (613) 998-4783
Title Secretary, Canadian Section
NAFTA Secretariat
90 Sparks Street, Suite 705
Ottawa, ON KIP 5B4
Tel: (613) 992-9380; Fax: (613) 992-9392
Info Export
External Affairs and International Trade Canada
125 Sussex Drive
Ottawa, ON K I A OG2
Tel: (613) 944-4000 (Ottawa area), 1-800-267-8376 Fax: (613) 996-9709
Canada Communications Group Publications
Ottawa, ON KIA OS9
Tel: (819) 956-4802; Fax: (819) 994-1498
Manager of Origin Audits
6th Floor, Sir Richard Scott Building
191 Laurier Avenue, W.
Ottawa, ON K I A OL5
Tel: (613) 954-5641; Fax: (613) 954-4494
Chief, Interdepartmental Programs
Commercial Operations
Revenue Canada, Customs, Excise and Tax
5th Floor, 555 Mackenzie Avenue
Ottawa, ON K I A OL5
Tel: (613) 954-7129; Fax: (613) 952-1698
TRADE CONTACTS
ITDN Trade Contacts
Canada
Country Desks
U.S. Department of Commerce
Country Desk - Canada
15th St and Constitution Ave, NW
Washington, DC 20230
Country/Area Code: 202
Phone: 482-0305
US Embassies in Foreign Countries
American Embassy Canada
100 Wellington St., K1P 5T1
Ottawa, Ontario, Canada
Country/Area Code: 613
Phone: 238-5335
Fax: 238-5720
Foreign Embassies in the US
Embassy of Canada
501 Pennsylvania Ave. NW
Washington, DC 20001
Country/Area Code: 202
Phone: 682-1740
Fax: 682-7726
Consulates
Commercial Section
Consulate General
Suite 1050, 615 Macleod Trail S.E.
Calgary, Alberta
Canada T2G 4T8
Country/Area Code- 403
Phone-266-8962
Fax: 264-6630
Consulates
Commercial Section
Consulate General
Cogswell Tower, Suite 910
Scotia Square, Halifax
Nova Scotia, Canada B3J 3K1
Country/Area Code: 902
Phone: 429-2480
Fax: 423-6861
Consulates
Commercial Section
Consulate General
P.O. Box 65
Postal Station Desjardins
Montreal, Canada H5B 1G1
Country/Area Code: 514
Phone: 398-9695
Fax: 398-0973
Consulates
Commercial Section
Consulate General
2 Place Terrasse Dufferin
C.P. 939
Quebec, Canada, G1R 4T9
Country/Area Code: 418
Phone: 692-2095
Fax: 692-4640
Consulates
Commercial Section
Consulate General
360 University Ave.
Toronto, Canada M5G 1S4
Country/Area Code: 416
Phone: 595-1700
Fax: 595-0051
Consulates 
Commercial Section 
Consulate General 
1095 West Pender St.
British Columbia, 
Canada V6E 2M6 
Country/Area Code: 604
Phone: 685-4311
Fax: 685-5285
Foreign Banks in the US 
Bank of Nova Scotia
R. E. Waugh, SVP
165 Broadway
New York, NY 10006
Country/Area Code: 212 
Phone: 225-5000
Fax: 225-5090
Foreign Banks in the US
Canadian Imperial Bank of Commerce 
Chris Rowland, VP
425 Lexington Ave. 5th Fl. 
New York, NY 100 17
Country/Area Code: 212 
Phone: 856-4000
Fax: 856-6699
Foreign Banks in the US 
National Bank of Canada 
Roger P. Smock, SVP
125 W. 55th St.
New York, NY 100 19
Country/Area Code: 212 
Phone: 632-8500
Fax: 632-8616
Foreign Banks in the US 
Royal Bank of Canada 
Kenneth Bender, Mgr. 
Financial Sq. 23rd Fl.
New York, NY 10005
Country/Area Code: 212 
Phone: 428-6200
Fax: 269-4378
Foreign Banks in the US 
Toronto-Dominion Bank 
Michael Mueller, SVP
31 W. 52nd St.
New York, NY 100 19
Country/Area Code: 212
Phone: 468-0300
Fax: 262-1923
Foreign Banks in the US
Harris Bank Int'l Corp.
430 Park Ave.
New York, NY 10022-3505
Gerry Daly, VP; Barry Catherwood, AVP
Country/Area Code: 212
Phone: 715-2674
Fax: 758-9847
World Trade Centers
World Trade Center Edmonton
Suite #502, Metropolitan Place
10303 Jasper Avenue
Edmonton
Alberta, Canada T5J 3N6
Country/Area Code: 403
Phone: 420-1155
Fax: 424-3091
Email: WTCED
World Trade Centers
Atlantic-Canada World Trade Center
Halifax
1800 Argyle Street, Suite 511
Halifax, Nova Scotia, Canada B3J2V9
Country/Area Code: 902
Phone: 428-7233
Fax: 420-8308
Email: WTCHA
World Trade Centers
World Trade Center Montreal (R)
380 St. Antoine St., West
Suite 2100
Montreal, Quebec, Canada H2Y 3X7
Phone: 849-1999
Fax: 847-8343
World Trade Centers
World Trade Center Ottawa
130 Slater Avenue, Suite 750
Ottawa, Ontario
KIP 6E2 Canada
Country/Area Code: 613
Phone: 598-4666
Fax: 594-8705
World Trade Centers
World Trade Center Quebec-Canada
10 Rue del' Hotel-de-Ville
P.O. Box 5187 Beauport, Quebec
Country/Area Code: 418
Phone: 666-6136
Fax: 667-8936
Email: WTCQB
World Trade Centers
World Trade Center Toronto
The Board of Trade of Metro Toronto
P.O. Box 375
One First Canadian Place
Toronto, Ontario, Canada M5X I E2
Country/Area Code: 416
Phone: 366-6811
Fax: 366-2444
Email: WTCTR
World Trade Centers
World Trade Center Vancouver
999 Canada Place, Suite 400
Vancouver, B.C. Canada V6C 3C1
Country/Area Code: 604
Phone: 681-2111
Fax: 681 0437
Email: WTCVN
World Trade Centers
World Trade Center Damascus
Canadian Develop. & Market. Corp.
Suite 4900, Scotia Plaza
40 King Street West
Toronto, Ontario M511 4A2 Canada
Country/Area Code: 416
Phone: 777-6701
Fax: 777-6707
Ocean Carriers
Bolt Canada Line
Morlines Maritime Agency Ltd.
485 McGill, Fifth Fl.
Montreal, PQ H2Y 2H4 Canada
Country/Area Code: 514
Phone:285-1571
Fax: 285-1707
Ocean Carriers
C. S.A. V. (Chilean Line)
Robert Reford
221 St. Sacrament
Montreal, PQ H2Y 1X2 Canada
Country/Area Code: 514
Phone: 845-5201
Fax: 845-6490
Railroads, US
Ontario Northland Transportation
Commission
555 Oak St. E.
North Bay, ON P 1B 8L3 Canada
Country/Area Code: 705
Phone: 472-4500
Fax: 472-4267
Railroads, US
Quebec North Shore & Labrador Rlwy
100 Retty St.
Sept-Iles, PQ G4R 3EI Canada
Country/Area Code: 418
Phone: 968-7804
Fax: 968-7183
Railroads, US
CN Rail
935 de la Gauchetiere W.
P.O. Box 8100
Montreal, PQ 113C 3N4 Canada
Country/Area Code: 514
Phone: 399-4783
Fax: 399-8459
Railroads, US
CP Rail System
1290 Central Pkwy. W.
Sixth Fl.
Mississauga, ON L5C 4R3, Canada
Country/Area Code: 905
Phone: 803-3210
Fax: 803-3300
Last Update: 08/05/98 Time: 20:21:59
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COMPANY SPECIFIC
Introduction
Massasoit Machine, Inc. specializes in automatic screw machining (single spindle) and CNC
precision machining of metal and plastic components for a wide variety of industrial,
commercial and military customers located throughout eastern U.S. The Standard Industrial
Classification (SIC) code for Massasoit Machine is SIC-3451 (Screw Machine Products). 
A detailed report on trade trends over the period from 1992 to 1996 for the Machine Shop
Industry of the US and Canada is attached as Appendix F. This report has been prepared by
the Canadian Industry Statistics Development Team. SIC-3081 is the Canadian
classification of this industry
Appendix G contains a partial list of (SIC-3 08 1) -- Major Players in Machine Shop
Industry establishments in Canada. These industrial establishments could be potential
customers/competitors for Massasoit Machine Inc.
MARKET CHANNEL
Use of Agents and Distributors:
Distribution channels in Canada vary greatly according to the products and commodities
involved. For example, industrial equipment of considerable size and value is usually
purchased directly by end-users. Smaller equipment and industrial supplies, on the other
hand, are frequently imported by wholesalers, acting in some cases as exclusive
distributors, or by U.S. manufacturers' sales subsidiaries. U.S. firms have historically
preferred to appoint manufacturers' agents who regularly call on potential customers.
Many major distributors expect to work on a two-tier commission basis. For contract
shipments, agents are offered a low (but realistic) commission, but they receive a higher
rate when purchases are made from a local agent's own stocks. Consumer goods are
purchased by importing wholesalers, department stores, mail-order houses, chain stores,
wholesalers' and retailers' purchasing cooperatives, and many large, single-line
retailers.
Manufacturers' agents also play an important role in the importation and distribution of
consumer goods. In addition, the importance of department stores, mail-order houses and
cooperative purchasing organizations as direct importers has increased substantially.
Many of these groups have their own purchasing agents in the United States.
MANUFACTURERS' REPRESENTATIVE
Listed below are a few of the manufacturers' representatives which could be a potential
contact in Canada for the high precision one machining industry of US such as Massaoit
Inc. This channel of exporting could be one of the most effective ways of market entry
into Canada by a US manufacturing organization. These manufacturer's representatives are
from the MANA (Manufacturers' Agents National Association)-Canada Directory. 
J. & Fraser & Associates Ltd. 
John R. Fraser 
3010 Longfellow Ave 
Windsor, ON N9E 2L5 Canada 
Phone: (519) 969-1842 
Fax: (519) 969-1625
Products Sold: Springs, wire-formed parts/assemblies, small stampings from coil-four
slide parts, screw machine parts. 
Territory: Canada: S. ON; Montreal area, QU.
Nuclear Fittings, Ltd.
Jack C. Wiggelaar
151 Bentley St., Unit 4
Markham, ON L3R 3X9 Canada
Phone: (905) 475-1785
Fax: (905) 475-2358
Products Sold: Cold headed products: screws, bolts, nuts, conduit products, springs,
stampings, weld nuts & weld studs, powdered metal products, washers, clevis pins, rivets,
clik, lynch, bridge, weld, groove, hitch pins, elastomeric parts, screw machine
products.
Territory: ON, QU, AB, NS, MT
OEM SALES
Dereck Shenstone
55-C Beverly Hills Dr.
Toronto, ON M3L I A2 Canada
Phone: (416) 614-8844
Fax: (416) 614-8292
Products Sold : Castings, forgings, screw machine components, plastic/rubber parts, gas
cylinders, linear actuators, OEM components, ultra precision/sub-miniature machining,
miniature control cables. 
Territory : ON, QU, Eastern Canada.
The decision to enter the Canadian market can only be made by the owner's of Massasoit
Machine, Inc. It is hoped that the contents of this research study will assist in the
making of an objective and rationale decision.
If a positive decision is made to enter the Canadian market, the report suggests the use
of manufacturer's representatives as one of the most effective way of the market entry.
It lists several potential contacts.
Additionally the report list a number of manufacturer's in the machine shop industry.
This list includes both potential customers and possible competitors. Massasoit Machine,
Inc. may decide to contact the potential customers directly before appointing their own
representative.
Success in the Canadian market will not appear immediately. Further it is important to
learn from the mistakes of others in addressing export markets. The U.S, Department of
Commerce has listed a number of the most common mistakes made by the new exporters. These
include:
-  Lack of an export marketing plan.
-  Insufficient long term commitment by top management. 
-  Failures to allocate adequate company resources in terms of finance and personnel.
Appendix A
COUNTRYDATA
Population: 28,846,761 (January 1, 1997, based on actual census count in 1996)
Population Growth Rate: 1.3% (estimate)
Primary Religions: Catholic 42%; Protestant 40% (estimate)
Government System: Confederation with Parliamentary Democracy
Prime Minister: Mr. Jean Chretien (Liberal Party)
Official Languages: English and French
Work Week: Monday to Friday, 9: 00 a. m. to 5: 00 p. m.
Source: Statistics Canada
Appendix B
(This appendix was prepared by the Economic Section of the U.S.Embassy in Ottawa using
Department of State resources.)
CANADIAN DOMESTIC ECONOMY
(In billions of Canadian dollars, unless otherwise indicated) (Please note: Forex
fluctuations cause distortions in actual levels and growth rates when converting C$ data
into US$.)
ECONOMIC INDICATOR 1996 1997 1998
Real GDP 617.8 635.2 651.5
(Based on 1986 C$)
GDP Growth Rate (%) 1.5 2.8 2.6
Real GDP Per Capita 20,593 20,827 21,015
(C$ 000s)
Public Sector Deficit -3.5 -3.1 -1.7
(as a percentage of GDP)
Inflation (%) 1.6 2.1 2.3
Unemployment 9.7 9.6 9.2
Foreign Exchange Reserves 20.6 N.A. N.A.
(Reported in Billions of US$)
Average Exchange Rate 73.34 73.60 68.00
(C$1 = US cents)
Net Public Debt 598.0 615.0 624.0
Federal Debt Service Charges 29.4 30.3 31.0
(% of Total Spending)
Source: U.S. Embassy Economic Section and Statistics Canada
Appendix C
(This appendix was prepared by the Economic Section of the U.S. Embassy in Ottawa using
Department of State resources. )
CANADIAN TRADE STATISTICS
(Balance of Payments Basis) (In billions of Canadian dollars unless otherwise indicated,
because foreign exchange conversion distorts actual trends and growth rates.)
1996 1997 1998
Exchange Rate 73.34 73.60 68.00
(C$1 = US cents)
Total Canadian Exports 329.6 351.7 377.7
(merchandise and non-merchandise).
Total Canadian Imports 331.2 354.1 377.5
(merchandise and non-merchandise)
Canadian Exports to the U.S. 249.6 267.3 287.1
(merchandise and non-merchandise)
U.S. Imports into Canada 232.5 251.4 268.0
(merchandise and non-merchandise)
U.S. Share of Total Canadian Imports 71.0 71.0 71.0
(merchandise and non-merchandise)
Total Trade With the World 60.8 705.8 671.7
(merchandise and non-merchandise)
Total Trade With the U.S. 482.1 514.4 550.4
(merchandise and non-merchandise)
U.S. Share of Manufactured Imports (%) 72 74 74
Canadian Merchandise Trade Balance With Three Leading Trade Partners in 1996 (Balance of
Payments Basis)
United States: + C$40.7 Billion
Japan: + C$ 3.4 Billion
United Kingdom: - C$ 1.4 Billion
Principal Canadian Exports to the United States in 1996 (Billions of Canadian Dollars)
Motor vehicles and parts 61.5 
Machinery and Equipment 42.7
Industrial Goods 35.7
Forestry Products 25.2
Energy Products 24.8
Principal Canadian Imports from U.S. in 1996 (Billions of Canadian Dollars)
Machinery and Equipment 50.3
Automotive Products 43.1
Industrial Goods 33.1
Consumer Goods 14.5
Agriculture/Fishing Products 8.1
Source: Statistics Canada
Appendix D
Canada - New England Trade Summary, 1997
Newfoundland
Prince Edward
Island
Nova Scotia
New
Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British
Columbia
Yukon
Territories
NW Territories
Appendix E
NAFTA: A PARTNERSHIEP AT WORK
(Department of Foreign Affairs and International Trade (DFAIT): June 1997
TABLE OF CONTENTS
Introduction
NAFTA: A Partnership at Work
The NAFTA Commission
NAFTA Coordinating Secretariat
Working Groups and Committees
The Dispute Settlement Process
Accession to the NAFTA
Trade Results
Trade In Services
Trade Liberalization through Tariff Reduction Commitments
Investment
The North American Agreements on Environmental and Labour Co-operation
Labour
Environment
Introduction
The North American Free Trade Agreement (NAFTA) between Canada, the United States and
Mexico entered into force on January 1, 1994. Designed to foster increased trade and
investment among the NAFTA partners, the Agreement contains an ambitious schedule for
tariff elimination and reduction of non-tariff barriers, as well as comprehensive
provisions on the conduct of business in the free trade area. These include rules
regarding investment, services, intellectual property, competition and the cross-border
movement of businesspersons.
The NAFTA has improved Canadian access to the U.S. and Mexican markets and enhanced the
attractiveness of the Canadian economy to foreign investors. Since the NAFTA's entry into
force, Canadian exports to those markets have shown impressive growth, and foreign direct
investment in Canada from all sources has increased steadily.
More importantly, the NAFTA and its predecessor, the Canada-U.S. Free Trade Agreement
(FTA), have stimulated significant advance; in productivity and specialization within the
Canadian economy, and have promoted grater economies of scale, product quality, and cost
competitiveness. The result has been improved competitiveness of Canadian exports of both
goods and services.
Total trade is a key driving force for economic growth and employment creation in an open
economy such as Canada's. The ratio of exports of goods and services to gross domestic
product (GDP) in 1996 was 38.4 percent, making Canada's economy the most globally
integrated of all G-7 countries.
After three years of implementation, the NAFTA has further advanced existing trends
toward market convergence in North America. This is demonstrated by the figures for 1996,
which show $388.3 billion in total Canadian two-way trade with our NAFTA partners, over
$200 billion in outward and inward foreign direct investment, and over $50 billion in
trade in services between Canada and the United States. These figures indicate that
important markets for a wide range of goods, services, financial resources, and
technologies already exist and have prospered in a well-integrated commercial
environment.
The NAFTA Commission
The Free Trade Commission, which includes cabinet-level representatives from the three
member countries, is the central institution of the NAFTA. The Commission supervises the
implementation and further elaboration of the Agreement and helps to resolve disputes
arising from its interpretation. It also oversees the work of the NAFTA's 30-plus
committees and working groups. The Commission last met in Washington, D.C. in March 1997.
Ministers have agreed that the Commission's next meeting will take place in Mexico early
in 1998.
NAFTA Coordinating Secretariat
Ministers have agreed that the Commission will be assisted in its work by the NAFTA
Coordinating Secretariat (NCS), which is to be established later this year in Mexico
City. The NCS will serve as the formal archive for the work of the NAFTA and serve as a
working secretariat to the Commission.
Working Groups and Committees
The NAFTA envisages further work to help fully achieve the objective of a free trade
area. Under the Agreement, over 30 working groups and committees were established to
facilitate trade and investment and to ensure effective implementation and administration
of the NAFTA's rules. Key areas where this work is being undertaken include rules of
origin, customs, agricultural trade and subsidies, standards, government procurement and
the cross-border movement of business people. These working groups and committees report
annually to the NAFTA Commission, composed of the trade ministers of Canada, Mexico and
the United States.
The NAFTA working groups and committees also help to smooth the implementation of the
Agreement and provide a forum for exploring ways of further liberalizing trade between
members. One example is Canada's continued effort to pursue the accelerated reduction of
tariffs on specific goods. The NAFTA working groups and committees also provide an
apolitical arena for the discussion of issues and, through early dialogue on contentious
points, the possible avoidance of dispute settlement procedures.
The Dispute Settlement Process
The vast majority of trade in North America now takes place in accordance with the clear
and well-established rules of the NAFTA and the World Trade Organization (WTO).
Nonetheless, in such a large trading area disputes are bound to emerge. In such cases,
the NAFTA directs the governments concerned to seek to resolve their differences
amicably, through the NAFTA's committees and working groups or other consultations. If no
mutually acceptable solution is found, the NAFTA provides for an expeditious and
effective panel procedure.
The administration of the dispute settlement provisions of the NAFTA is the
responsibility of the Canadian, U.S. and Mexican National Sections of the NAFTA
Secretariat. In the first nine months of the 1996-97 fiscal year, the Secretariat
administered 14 panel reviews under Chapter Nineteen of the Agreement and one arbitral
panel proceeding under Chapter Twenty. Eight Chapter Nineteen panel decisions and one
Chapter Twenty panel report were issued in 1996.
Chapter Twenty of the NAFTA sets out the institutional arrangements and dispute
settlement procedures. As of the end of 1996, 11 consultations had been requested under
Chapter Twenty on 10 measures. One of these proceeded to an arbitral panel. Chapter
Fourteen adds special procedures for any disputes that may arise over financial
services.
Building on the Canada-U.S. FTA, the NAFTA also includes, in Chapter Nineteen, a unique
system of binational panel review of domestic decisions regarding anti-dumping and
countervailing duty issues, which replaces judicial review in each of the three
countries. There have been 73 requests for panel review under Chapter Nineteen since the
adoption of the FTA.
Despite the clear success of Chapter Nineteen under the FTA and the NAFTA, Canada
continues to believe that the application of trade remedies has no place in a free-trade
area. Accordingly, Canada will continue to pursue the significant reform, if not
elimination, of trade remedies within North America.
For investment matters, the NAFTA sets out procedures for Mixed arbitration between the
aggrieved investor and the host government concerned, using procedures common to Canadian
foreign investment protection agreements and the World Bank's Center for the Settlement
of Investment Disputes. The NAFTA also requires domestic agencies to respect the
principles of due process, fairness and transparency. For example, it requires each
country to institute or maintain a system for bid challenge review of government
procurement decisions.
As of January 1, 1997, the Canadian Section of the NAFTA Secretariat is also responsible
for the administration of the dispute resolution process under Chapter 8 of the Canada
Israel Free Trade Agreement. Effective in July 1997, the Canadian Section will assume
responsibility for the administration of the dispute resolution process under Chapter N
of the Canada-Chile Free Trade Agreement.
Accession to the NAFTA
The NAFTA was designed as an outward-looking agreement with the potential to be expanded
to include new members. Canada believes that membership should remain open to countries
willing and able to undertake the NAFTA's obligations, including the parallel agreements
on labor and the environment.
Negotiations to achieve Chile's accession to the NAFTA were officially launched in June
1995. Canada has been an active proponent of Chile's accession to the NAFTA. Stronger
economic ties with Chile will create more opportunities for trade and investment in this
high-growth market.
In view of the present lack of fast-track authority for trade negotiations in the United
States, Canada and Chile successfully completed negotiations on a interim bilateral
free-trade agreement and parallel agreements on environmental and labor co-operation,
which will serve as a bridge to Chile's eventual accession to the NAFTA. Mexico and Chile
currently are negotiating revisions to strengthen a bilateral trade agreement between
them.
Trade Results
In the wake of the implementation of the Agreement on January 1, 1994, total trade
between NAFTA member countries began expanding at unprecedented rates. The average annual
increase in total trade for the three years ending on December 31, 1996 was 13.8 percent.

In 1996 Canada's total trade with NAFTA partners increased by 5.8 percent to reach $388
billion. Strong export performance contributed to a merchandise trade surplus with those
partners to an all-time high of $41.2 billion - and is an important contributing factor
in reducing current-account deficits that have prevailed for more than a decade.
Merchandise export surpluses have very nearly offset Canada's deficit in services and
non-merchandise transactions with its NAFTA partners.
In particular, the increase in Canadian exports since the implementation of the NAFTA has
led to a steady narrowing of the overall current-account deficit. Exports have been
especially strong in automotive equipment (trucks, cars and parts), machinery and
industrial goods, aluminum, iron ore and fertilizers. Reflecting this trend, the share of
exports to NAFTA partners in Canada's total exports has increased from 80.8 percent in
1993 to 81.5 percent in 1996.
Graph Here
Imports to Canada from NAFTA members also increased - particularly for machinery and
equipment, communications equipment, automotive equipment, and agricultural products. The
share of imports from NAFTA partners in Canada's total imports has also increased from
69.2 percent in 1993 to 70.2 percent in 1996.
Following already impressive growth since the FTA came into effect on January 1, 1989,
Canadian exports to the United States increased by 22 percent in 1994, followed by a
further increase of 14 percent in 1995 and 6 percent in 1996 to reach $223.5 billion.
Two-way trade also expanded at similar rates to reach $3 8 1.0 billion in 1996. Canada
and the United States currently exchange over $1 billion in goods and services each day.
The graphs below demonstrate that trade in machinery and transportation equipment
continues to be at the core of trade between Canada and the United States. Since the FTA
was implemented, Canadian exports to the United States for manufactured and industrial
goods, with their higher value-added component, have steadily increased. Similarly,
Canada continues to be the main destination of exports from the United States, the value
of which rose by 82.9 percent - $71 billion -between 1988 and 1996.
One important benefit of the NAFTA for Canada is better access to the Mexican market.
Canadian firms have been able to expand sales in sectors that were previously highly
restricted, such as automotive products, financial services, trucking, energy and
fisheries. Also, Canadian exports have become steadily more diversified, with value-added
manufactured products accounting for more than 50 percent of total exports to Mexico in
1996. As a result, Mexico is now Canada's ninth largest export market and fourth largest
import source.
Despite the economic adjustments required in Mexico as a result of the financial crisis
of December 1994 and its aftermath, Canadian exports to Mexico increased by 5.4 percent
to $ 1. 1 billion in 1995, bringing two-way trade to nearly $6.5 billion. Exports to
Mexico rose by a further 5.3 percent in 1996, with two-way trade climbing by 10.4 percent
to over $7.2 billion. By 1996 the two-way trade between Canada and Mexico represented a
doubling of the trade levels registered in 1992. Ongoing market liberalization efforts in
Mexico, particularly in the energy, banking, telecommunications and transportation
sectors, continue to create opportunities for Canadian exporters. As the Mexican economy
evolves and strengthens, the demand for goods and services will continue to increase.
Canada is well placed to respond to those needs.
Trade In Services
The value of the two-way trade in services (such as travel, freight and shipping and
commercial fees) between Canada and the United States has increased by 71 percent since
1988, growing in value from $30.4 to $52.0 billion in 1996. The NAFTA expanded the extent
of coverage under the Canada-U.S. FTA to include virtually all aspects of cross border
trade in services. Over the three-year period ending on December 3 1, 1996, Canadian
service exports to the United States rose by 16.9 percent, while imports from the United
States increased by 11.3 percent. In 1996, exports of Canadian services to the United
States and Mexico showed small increases, moderating Canada's traditional deficit in this
sector to some extent.
The fastest-growing component of the services trade has been in the computer and
information services area, where there is a high degree of specialization. In fact,
bilateral trade between Canada and the United States in informatics services has emerged
as one of the fastest-growing in the world. Exports to the United States have also
increased in such areas as communications, architecture, engineering and other technical
services. Imports of management and advertising services to Canada from the United States
have increased for management and advertising services.
Canadian Trade in Services with the United States
GRAPH
Although the trade in services is on the rise, it corresponds to only 14 percent of total
merchandise trade. Given the large contribution of services to Canada's GDP (almost two
thirds) and the rapid growth of the services sector in both economies, this trade is
expected to increase in the future.
Trade Liberalization Through Tariff Reduction Commitments
The NAFTA does not affect the tariff phase-out of the Canada-U. S. Free Trade Agreement
(FTA), under which virtually all tariffs between the United States and Canada, will be
eliminated by January 1, 1998. For trade between Canada and Mexico, the NAFTA will result
in the elimination of virtually all tariffs by January 1, 2003.
In addition, the NAFTA provides for the accelerated elimination of tariffs where
countries agree. This is an industry-driven process that includes public consultations,
involving consumers and other interested parties, whereby the elimination of tariffs is
negotiated based on support in the industry sector concerned.
Preliminary figures and studies indicate the extent to which tariff reduction under the
FTA and NAFTA have had effects on growth rates of trade. Canadian exports to the United
States have grown faster (in both value and volume terms) in some sectors liberalized by
the FTA and NAFTA (e.g. industrial machinery, office machinery, textile materials,
specialty papers, and consumer goods) than in sectors where tariffs were already low or
at zero. Imports from the United States show similar trends (particularly in areas such
as clothing, processed food and beverages, furniture, transportation equipment, and
household products).
In value terms, between 1988 and 1995, Canadian exports to the United States of products
liberalized by the FTA and NAFTA increased by about 140 percent, whereas the increase for
exports as a whole was 100 percent. Imports of liberalized products from the United
States increased by about 100 percent, while total imports increased by 75 percent.
Investment
The NAFTA has contributed to enhancing Canada's attractiveness to foreign investors while
providing more opportunities for Canadians to invest in NAFTA partners' economies. The
Agreement's provisions ensure greater certainty and stability for investment decisions by
guaranteeing fair, transparent and non-discriminatory treatment of investors and their
investments throughout the free trade area. The NAFTA's contribution to increased
productivity - through more competition and better-priced inputs - has also prompted
greater capital investment in Canada. Total foreign direct investment (FDI) in Canada
increased by 8.7 percent in 1994, 9.3 percent in 1995, and 7.4 percent for a total of
$180 billion in 1996.
There have been notable investment gains in financial services, transportation equipment,
automobile equipment, chemicals, energy, communications, and food and beverages.
Statistics Canada reports that, in 1996, Canada was the world's third-largest recipient
of direct investment by foreign multinational companies, which accounted for $12.0
billion of direct investment from a wide variety of sources. Foreign investors financed a
significant portion of their investment through reinvested Canadian profits, benefiting
all Canadians. At the end of 1996, 87 percent of FDI was in Canadian subsidiaries.
The United States remains the largest foreign investor in Canada. The stock of direct
investment from the United States increased for the fourth straight year, by 9.1 percent
in 1996 to $122.7 billion, representing 68 percent of total foreign direct investment in
Canada.
The United States also remained the largest destination for Canadian direct investment
with a total of $92.9 billion invested abroad, an increase of 7.5 percent in 1996. This
represents 54 percent of all Canadian outward investment, an historically low, but
relatively stable figure in the last four years.
The signing of the NAFTA has meant more dramatic increases in capital flows between
Canada and Mexico. Total Canadian investment in Mexico more than doubled between 1993 and
1994 to $1.07 billion, decreasing slightly to $919 million in 1995, before increasing
rapidly in 1996 to $1.3 billion. This made Canada one of the most important sources of
new investment in Mexico in 1996. Current Canadian investment in Mexico is concentrated
in mining, banking and telecommunications. Further potential exists in sectors such as
gas and energy. Mexican investment in Canada is growing, but remains very small.
The increased FDI into Canada since the early 1990s has also had an important effect on
the renewal of plants and equipment. FDI in machinery and transport equipment increased
by 50.1 percent between 1990 and 1996 alone. This investment is also assumed to have
contributed to the higher productivity observed during this period.
Canadian Investment in the United States
Mexican Investment in Canada
Canadian Investment in Mexico
The North American Agreements On Environmental And Labour Co-Operation
Negotiated and implemented in parallel to the NAFTA, the North American Agreements on
Environmental and Labour Co-operation were designed to facilitate greater cooperation
between the partner countries in those areas and to promote the effective enforcement of
each country's laws and regulations.
Labour
The Commission for Labour Co-operation (CEC) was created in 1994 by the North American
Agreement on Labour Co-operation (NAALC) to promote co-operation on Labour matters
between NAFTA members and to promote the effective enforcement of domestic Labour law.
The Commission consists of a Council of Ministers (comprising the labour ministers from
each country) and a Secretariat, located in Dallas, Texas.
The Secretariat provides administrative, technical and operational support to the Council
and is charged with the implementation of an annual work program. National Administrative
Offices (NAOs), located in the departments responsible for labour in each of the three
countries, serve as domestic implementation points for the Agreement.
Regarding the NAALC, the Canadian Intergovernmental Agreement provides a mechanism for
provincial participation and has now been signed by Alberta, Quebec and Manitoba. This
agreement gives the provinces an important role in developing and managing Canada's
involvement in the NAALC. With the combined participation of these provinces and the
federal government, the NAALC now covers more than 40 percent of the Canadian workforce.
As of June 1997, a total of seven public communications have been received under the
NAALC, all of which deal with freedom of association. Six of the submissions have been
directed at Mexico (one was withdrawn) and one at the United States. Canada has not been
the subject of any submissions.
In 1996, the Commission issued a preliminary report profiling North American labour
markets. It also released an initial report on labour law in Canada, Mexico and the
United States in the area of industrial relations (freedom of association and right to
organize, right to bargain collectively and right to strike). At the request of the
Council, the Secretariat completed a study on the effects of sudden plant closures on
freedom of association and the right to organize. In February 1997, the Secretariat
hosted the first North American Seminar on Incomes and Productivity with business, labour
and academic participation.
Environment
The Commission for Environmental Co-operation (CEC) was created in 1994 by the North
American Agreement on Environmental Co-operation (NAAEC) to enhance regional
environmental co-operation, reduce potential trade and environmental conflicts and
promote the effective enforcement of environmental law. It also facilitates co-operation
and public participation to foster conservation, protection and enhancement of the North
American environment. The Agreement, signed by Canada, Mexico and the United States,
complements the environmental provisions established in the NAFTA.
The CEC consists of three principal components: the Council, the Joint Public Advisory
Committee (JPAC) and the Secretariat. The Council, which is the governing body of the CEC
and is composed of cabinet-level representatives from each of the three countries, met in
Pittsburgh, Pennsylvania in June 1997. The Joint Public Advisory Committee is composed of
15 members, five from each of the three countries; it advises the Council on any matter
within the scope of the Agreement. The Secretariat provides administrative, technical and
operational support to the Council and is charged with the implementation of the annual
work program.
Regarding the NAAEC, the Canadian Intergovernmental Agreement (IGA) provides a mechanism
for provincial participation in the Agreement and has now been signed by Alberta, Quebec
and Manitoba. The IGA facilitates the provinces' participatory role in developing and
managing Canada's involvement in the NAAEC.
The Council is responsible for approving the Commission's work program and the
Secretariat receives endorsement to implement it. Progress has been made in several
areas. On Sound Management of Chemicals, trinational-working groups are working toward
developing regional action plans for polychlorinated biphenyls (PCBs), mercury chlordane
and dichloro-diphenyl-trichlorethane (DDT). Two other substances are likely to be
identified for implementation in the course of 1997. On Climate Change, four joint
implementation proposals - two related to carbon sequestration and two related to energy
have been chosen by the CEC for pre-feasibility studies.
It is also the Secretariat's role to consider complaints from any non-governmental
organization or person asserting a party's failure to enforce its environmental law. As
of June 1997 the Secretariat has received three such complaints. The Secretariat also
prepares reports on any environmental matter related to the co-operative functions of the
NAAEC.
-  Department of Foreign Affairs and International Trade, September 1998
Appendix F
(SIC-3081) - Machine Shop Industry
The 4-digit SIC under review is the Machine Shop Industry, which is associated with the
Machine Shop Industry 3-digit SIC, which in turn is one of the major industry categories
under the broader 2-digit Fabricated Metal Products Ind. (excl. Machinery and
Transportation Equipment). With respect to the activity or division grouping, this latter
industry grouping falls under the Manufacturing division.
Statistics Canada defines the Machine Shop Industry (SIC 3081) as: Establishments
primarily engaged in manufacturing machine parts and equipment, other than complete
machines, for the trade. This industry includes machine shops providing custom and repair
services. Establishments primarily engaged in rebuilding or remanufacturing automotive
engines are included here.
Establishments primarily engaged in repairing automotive generators, starter motors and
alternators are classified in *9941 - Electric Motor Repair* those primarily engaged in
rebuilding automotive parts such as fuel pumps, water pumps, brake shoes, clutches,
solenoids and voltage regulators are classified in *5529 - Other Motor Vehicle Parts and
Accessories, Wholesale* and those primarily engaged in repairing automobiles and trucks
are classified in *63 5 - Motor Vehicle Repair Shops* and *5512 - Trucks and Buses,
Wholesale*, respectively.
Some, but not a of the products related to this industry include: 
Camshaft regrinding 
Crankshaft regrinding 
Engine rebuilding 
Machine shop 
Machining, custom work 
Manual transmission rebuilding, mfg. 
Metal boring and drilling, custom 
Metal grinding, lapping and honing, custom 
Metal punching, custom
With respect to the next level of industrial aggregation, Statistics Canada rolls up the
Machine Shop Industry (SIC 3081) into the Machine Shop Industry (SIC '3080). The chart
below provides a proportional indication of the actual contribution of the Machine Shop
Industry to the larger and more aggregated Machine Shop Industry. In 1996, total
shipments in the 3-digit SIC were $2.8 billion, with the Machine Shop Industry accounting
for 100%.
Total Shipments, 1996 Machine Shop Industry
Source: Business Integrated Database (Industry Canada and Statistics Canada). The next
level of industrial aggregation is described as a 2-digit SIC. In this case the Machine
Shop Industry (SIC-E 3080) are included within the
Fabricated Metal Products Ind. (excl. Machinery and Transportation Equipment) (SIC-E
3000). The chart below illustrates the relative contribution and recent growth in terms
of shipments of each of the sub-industry groupings included within the Fabricated Metal
Products Ind. (excl. Machinery and Transportation Equipment).
Total Shipments 1996 ($billions)
In 1996, the Fabricated Metal Products Ind. (excl. Machinery and Transportation
Equipment) produced $23.5 billion and grew at an average compounded annual rate of almost
3.3% over the 1990 to 1996 period. In 1996, the Machine Shop Industry segment represented
almost 12% of total Fabricated Metal Products Ind. (excl. Machinery and Transportation
Equipment) shipments,
The final level of aggregation encompasses all of the manufacturing sector. The chart to
the right illustrates the relative contribution of the Fabricated Metal Products Ind.
(excl. Machinery and Transportation Equipment) within the manufacturing sector. Total
manufacturing shipments for the economy grew an average annual compounded rate of 5.9%
over the 1990 to 1996 period, and produced approximately $489.7 billion in 1996.
Transportation Total Shipments, 1996 ($billions)
As described earlier, the U.S. Department of Commerce's Census Bureau uses slightly
different industrial classification codes to describe and measure U.S. industrial output.
In order to perform Canadian and U.S. comparisons, a concordance table must be
constructed to map Canadian industries to U.S. industries. While it is not possible to
provide a perfect concordance, significant efforts were made to map Canadian and U.S.
industries to the most appropriate and detailed 4-digit industry level. Unfortunately a
few U.S. industries are formally associated with two or more distinct Canadian
industries. To reduce double counting and provide the most reasonable comparisons,
Industry Canada reviewed each of these problematic U.S. industries and assigned them to
the single most comparable Canadian industry.
in the case of Canada's Machine Shop Industry (3081) Industry Canada has associated it
with the U.S. industries described to the right. Total shipments for each of these
industries are also included in order to provide the reader with a sense of the relative
contribution of each of the U.S. industries concorded to this Canadian 4-digit industry.
To assist readers, we have placed an asterisk next to those U.S. industries, which could
have been assigned to two or more distinct Canadian SICs. While we have used our own
judgment in determining the most appropriate Canadian SIC, these U.S. industries have
been flagged to alert the reader as to their existence and potential significance.
Trade
U.S. 5-Digit Industries Concorded to SIC 3081 - Machine Shop Industry Source: U.S.
Department of Commerce. Graph.
Data Background
This section analyzes industry trade trends over the period from 1992 to 1996. It should
be noted however that there is a fundamental difference between trade and production
data. Production data captures secondary production, which occurs at the establishment
level and differs from the plant's principle manufacturing activity to which they are
classified.
Trade data, on the other hand, classifies all products as they cross the border
regardless of the principle activity of the producing establishment. This data is
captured as a commodity rather than as an industry good. In an effort to quantify
industry trade, Statistics Canada associates the exported commodity code (Harmonized
System, HS) with a manufacturing industry code (Standard Industrial Classification, SIC)
(see concordance, Cat. no. 65-202). A simple example would be the case of an exported
automobile engine which would be attributed to the Canadian Motor Vehicle Engine and
Engine Parts Industry even though it may have been produced by a plant classified within
the Motor Vehicle Industry.
U.S. and Canadian export data include goods that have been grown, extracted or
manufactured, including goods of foreign origin which have been materially transformed in
Canada or the U.S. It does not include re-exports which are exports of foreign goods
which have not been materially transformed in Canada or the U.S., including foreign goods
withdrawn for export from bonded customs warehouses.
Canada/United States Overview
As shown below, in 1996, Canada's Machine Shop Industry ran a trade balance of $[no data
available for this year] million. This balance is from the 1995 level of $[no data
available for this year] million. Over the 1990 to 1996 period, Canada's trade balance in
this industry had a compounded average annual growth rate (CAAGR) of [no data
available]%. The U.S. ran a trade deficit of $3648.8 million in 1996, and their trade
balance had a CAAGR of 15.4% since 1992.
Canada - Trade Balance
Canadian domestic exports totaled $0 million in 1996. Over the 1990 to 1996 period,
domestic exports in this industry had a CAAGR of [no data available]%. In the U.S.,
domestic exports in this industry had a CAAGR of 13% over the same period.
In 1996, Canada's total imports were $[no data available for this year] million, which
represented a balance of [no data available]% from the 1995 level of $[no data available
for this year] million. Over the 1990 to 1996 period, total Canadian imports of Machine
Shop Industry had a CAAGR of [no data available]%, while in the U.S., imports had at a
CAAGR of 13%.
In 1996, the Machine Shop Industry accounted for approximately [no data available]% of
total domestic exports activity in the manufacturing sector. The same industry in the
U.S. accounted for 4.3% of domestic export activity within the entire manufacturing
sector.
Presented below, as a possible proxy or indicator of comparative advantage is an U.S. and
Canadian comparison of export intensity. Export intensity is measured as a ratio of
domestic exports to total shipments.
Canada - Export Intensity
The Canadian industry received [no data available]% of its revenues from exports in 1996.
This ratio is slightly different from the 1990 level of [no data available]%. The average
level of export intensity for this industry over the 1990 to 1996 period was [no data
available]% in Canada and 29.1 % in the U.S. In comparison, the average degree of export
intensity for the entire manufacturing sector over the same period was 29.7% in Canada
and 16.9% in the U.S.
One yardstick often used to measure a country's demand for goods is total apparent
domestic market. This is calculated by adding manufacturing shipments to imports an
subtracting total exports. However, readers should note that significant caution should
be exercised when interpreting total apparent domestic market. While in most cases an
industry's total production plus imports minus exports should reflect a country's demand
for a particular industry's goods. Statistical anomalies may distort the final figure.
Many of these discrepancies are often the result of combining manufacturing production
data, which is collected from a survey of production plants, with trade data collected
from customs receipts.
Major difficulties are most often attributable to large plants. Some of these plants
produce significant amounts of two or more products, which belong in different industry
classifications. However, Statistics Canada's data collection methodology identifies a
primary product (the product with the largest shipments) and classifies total plant
production to that product, and hence to a single industry.
In 1995, Canada's apparent domestic market for products manufactured by the Machine Shop
Industry was estimated to be $2.3 billion (up 14.8% from the 1994 level of $1.9 billion).
Over the 1990 to 1996 period, the Canadian market had a CAAGR of 5.3%. The apparent
domestic market in the U.S. was estimated to be $3.8 billion in 1996. Since 1990, the
U.S. market had a CAAGR of 11 %.
The graph below shows the top 10 countries of destination for Canadian and U.S. domestic
exports in Machine Shop Industry in 1996. As shown, in 1996 Canada exported [no data
available]% of domestic exports to [no country available], [no data available]% to [no
country available], and no data available]% to [no country available]. While in the U.S.,
the top three domestic export destinations consisted of 43.7% to Canada, 10.3% to Mexico
and 5.8% to United Kingdom (U.K.)
The chart below lists the top 10 countries of origin for Canadian and U.S. imports for
products manufactured by the industry during 1996. The top three exporters to Canada
within this industry were [no country available], [no country available] and [no country
available], whose exports comprises [no data available]%,[no data available]% and [no
data available]% of total Canadian imports respectively. In the U.S. the top three
origins of imports were: Japan, Germany, and United Kingdom (U.K.), comprising 46.2%,
10.2% and 9.2% of total U.S - imports in 1996.
Appendix G
List of Major Industries for SIC-3081 (Machine Shop)
Engine Rebuilders Ltd Edmonton 7
Moire's Engine Professionals Ltd, Calgary 5
Rebound Rig International Ltd. Calgary 5
Reliable Engine Services Ltd. Edmonton 5
Universe Machine Corpcration. Edmonton 5
Adrico Machine Works Ltd. Calgary 4
Taro Industries Limited, Calgary 4
Armor Machine & Manufacturing Ltd, Edmonton 4
Campbell Industries Ltd. Edmonton 4
Cheetah Machining Ltd, Edmonton 4
Domino Machine Company Limited. Edmonton 4
Fieldco Mfg Inc, Edmonton 4
Gambit Products Ltd. Edmonton 4
Grenco Industries Limited. Edmonton 4
Headhunters Diesel Ltd, Edmonton 4
Hydra Group Ltd, Edmonton 4
Industrial Machine Shop Ltd. Edmonton 4
J & K Engine Repairs Ltd. Edmonton 4
Mastco Derrick Service Ltd. Edmonton 4
Vector Oil Tool Ltd, Edmonton 4
Steel Industries Of Grande Prairie Ltd. Grande Prairie 4
Shearer Supply Ltd Leduc 4
D & D Machine Works Ltd. Lethbridge 4
Medicine Hat Machine Works (1977) Ltd. Medicine Hat 4
Manluk Industries Inc, Wetaskiwin 4
Allied Machinists Ltd, Calqary 3
Independent Machinery Ltd. Cal6a 3
Millway Industries Ltd. Calgary 3
Morrison Metal Industries Ltd. Calgary 3
0 S M Calgary Industries Ltd. Calgary 3
Reliable Engine Services Ltd. 3
Versatech Industries Ltd. Calgary 3
Camrose Machine & Welding Ltd. Camrose 3
Drayton Valley Machine And Welding Ltd, Drayton Valley 3
Condor Machinery (1985) Ltd. Edmonton 3
Csm Compressor Supplies & Machine Work Ltd Edmonton 3
I S Machine Inc. Edmonton 3
Lennox Welding & Supply Ltd, Edmonton 3
Oxford Machine & Welding Ltd. Edmonton 3
Roda Deaco Valve Ltd. Edmonton 3
Appendix H
Internet Access for International Business, Economics, Marketing and Trade
Information
Alberta Business Directory.
Alberta's business directory; online Yellow Pages and more.
URL: http://www.alberta.com
Commercial News USA (CNUSA). 
Official publication of the U.S. Department of Commerce. Export marketing magazine
featuring American products and services; also includes trade leads and a directory of
exporters on the CNUSA site. 
URL: http://www.cnewsusa.com
Free Trade Area of the Americas 2005. 
An overview of the regional government initiative to achieve Western Hemisphere economic
integration. 
URL http://www.iep.doc.gov/ftaa2005
Global Trade Center. Excellent information for people interested in global trade.
Includes links to trade resources and sites worldwide as well as international business
opportunities. 
URL: http://www.tradezone.com
International Business Resources.
How-to resources to help companies establish global businesses and offices, start
import/export ventures, and understand international business practices.
URL: http://www.smartbiz.com/sbs/cats/ie.htm
International Import/Export Directory: International Trade and Transportation. 
The Directory contains links to the best international trade and transportation resources
on the web. It is designed to be a home base for firms or individuals involved in
international business. 
URL: http://www.serraintl.com
International Trade Desk.
Provides sources of mostly free government information covering trade leads and financing
sources for the benefit of small-medium-sized business.
URL: http://users.aol.com/tradedesk/trade.html
Tradebase. 
Office of Export Promotion, U.S. Department of Commerce. TRADEBASE is an Electronic Trade
Information Sharing Center designed to serve as a clearinghouse to merge the vast array
of trade information available from both the public and private sectors. 
URL: http://www.ita.doc.gov/tradebase/
Trade Talk.
Weekly entrepreneurial talk radio show on international global trade.
Trade Talk is owned/produced by the New York Currency Exchange, Inc.
URL: http://www.audionet.coni/tradetik/tradetlk.htm
U.S. Trade and Development Agency. 
Assists U.S. companies pursuing overseas business opportunities 
URL: http:Hwww.tda.gov/
International Internet Resources
Canada- Department of Foreign Affairs and International Trade
http://www.dfait-maeci.gc.ca/english/menu.htm
Canada Statistics
http://www.statcan.ca/
NAFTA on-line Homepage-North American Free 'Trade Agreement
Includes text of NAFTA. Markets research and top 50 exports by commodity
http://www.itaiep.doc.gov/nafta/nafta.html
Small Business Exporters Association
http://www.sbea.com/sbeacontent.html
U.S. Council for International Business
http://uscib.org/
The Federation of International Trade Associations
http://www.fita.org
Breaking into the Trade Game
gopher://umslvma.umsl.edu:70/1 I/library/subjects/business/intmktg/eg~break
Global Business Forum
http://www.pragmatix.com/gbf/
International Business Directory
http://www.et.byu.edu/-eliasone/mai8n.htmI
Trade Compass
http://www.tradecompass.com/
Trade Fair International
http://www.tradefair.coni/TradeFair.htmI
Trade Point USA
http://www.tpusa.com/
Trade Port
http://merkury.saic.com/tradenet
U.S. Export Directory
http://maingate.net/us-exports.htrnI