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Europe: Market overview

Europe shares many strong connections with Canada. These include a mutual commitment to democratic values and human rights, belief in the rule of law, and strategic partnerships ranging from clean energy and security to human development. Maybe most important for Canadian business, Europe is home to more than 450 million affluent customers who make a ready market for our goods and services.

All this makes Europe an attractive market for Canadian entrepreneurs looking to grow their business beyond borders. But the region also faces challenges that can make it difficult for potential exporters.

  1. The European Union (EU) is going through one of the most challenging periods in its brief history. There are many causes: The changing nature of the trade relationship between the EU and the United Kingdom (U.K.) after Brexit, the ongoing aftershocks of the COVID-19 pandemic, the rise of populist and nationalist movements in some member states, and of course the ongoing Russian invasion of Ukraine.
  2. While Canadian businesses have a leg up in the English- and French-speaking regions, the EU is a diverse and multilingual market with 24 official languages. Communications, marketing, and supply chain management are never easy, but in Europe, they can be particularly challenging.
  3. While the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) has eliminated a lot of trade barriers between our two markets, there are still sector-specific rules and compliance that need to be obeyed when doing business in the EU.  

With a smart export plan, dedicated and trustworthy partners, and a willingness to do your homework, the potential for your business to expand into Europe can’t be overstated. It might represent the culmination of your ambitions for your business—and the kind of success you never thought possible.

The best part? You won’t be alone. Export Development Canada (EDC) is here to help Canadian companies diversify beyond Canada, so they can learn what it means to experience the export impact. We have trade representatives across Europe who can advise you on your export strategy, connect you with our extensive network of partners and resources, and fuel your expansion by helping you get financing and mitigate risks.

High-potential sectors in Europe

EDC market intelligence sees alignment between regional demand and Canadian capabilities in the following sectors:    

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Agri-food

Europe contains nearly half a billion consumers who appreciate high quality food products. Our trade agreements have eliminated most tariffs from Canadian agri-food exports, giving Canada a competitive advantage.

Opportunities in Europe’s agri-food industry aren’t limited to selling farm equipment and food. European farming and agriculture are changing, and sectors less obviously related to food production, such as AI and nanotechnologies, are assuming an increasing role in the industry. This is opening a rich source of business opportunities for Canadian companies across many sectors and subsectors, especially in digitalization, cleantech, advanced manufacturing, sustainability, water and wastewater management, and private-label products.

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Ukraine reconstruction

When the Russian invasion ends, Ukraine will face a daunting task of rebuilding its shattered economy and infrastructure. The costs could run to more than $1 trillion, according to some estimates. A generous aid package from Ukraine’s Western allies, on the scale of the Marshall Plan that helped Europe to recover after the Second World War, may be needed.

Canadian businesses will face enormous opportunities to contribute across nearly every sector, from engineering and agri-food to health care and technology. EDC continues to monitor the situation and remains committed to supporting Canadian companies interested in exporting to this market.

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Cleantech

The European Green Deal aims to achieve climate neutrality in the EU by 2050. This gives countries throughout Europe a strong appetite for Canadian cleantech products to help them grow more sustainable economies and meet their net zero goals.


 

         

Country and regional spotlight

Which market in Europe is the best fit for your company’s strategy and capabilities? There are many options, but EDC market intelligence sees exciting potential for Canadian exporters in the following countries and sub-regions.    

         

Opportunities and challenges in Europe for Canadian exporters

  • Large and affluent population
  • Trade agreements have removed most barriers
  • Skilled workforce and highly developed infrastructure
  • Strong and stable rule of law
  • Lots of existing trade in goods and services

Europe is a vast and lucrative market for Canadian business. Trade agreements have removed most of the trade barriers, making this huge market of 445 million consumers a tempting target for our nation’s entrepreneurs. Canadian exports to the EU have already risen by 17% since the implementation of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), and that’s just the beginning.

  • Highly competitive business environment
  • Diverse and complex regulatory requirements
  • Different cultural norms and some language barriers
  • Different tax requirements
  • Political and economic uncertainty

Canadian firms looking to break into Europe should be well-prepared for potential hurdles. Lots of challenging regulations, competition from locals and persistent political and economic uncertainties make Europe a rewarding, but challenging market for potential exporters. To succeed, Canadian entrepreneurs must understand and comply with U.K./EU rules, adapt to local markets and offer quality and value above and beyond what discerning European customers can find domestically.

Geopolitical issues

War on Ukraine impacts Europe’s energy transition

Europe’s energy transition road map aims to achieve carbon neutrality by 2050, and it’s an understatement to say that the war in Ukraine has been a serious hindrance to that goal. Reduced exports of Russian gas have threatened Europe’s energy security, causing price volatility and supply shortages, in addition to the mounting human cost.

To reduce its dependence on Russian exports, the EU has accelerated its efforts to clean up and diversify its energy sources. The REPowerEU plan seeks to boost renewable energy, efficiency, cross-border electricity links, green hydrogen and gas storage. It also strengthens the EU’s resilience in the face of external shocks by deepening its diplomatic ties with energy partners.

Overall, the war in Ukraine has created both challenges and opportunities for Canada’s role in Europe’s energy transition. It’s accelerated the timeline and created urgent incentives for clean energy alternatives and greater efficiency. But it’s also added even more complexity and disruption to an already massive undertaking.

Brexit transforms European trade patterns

Brexit (Britain’s withdrawal from the European Union) has disrupted trade patterns between the U.K. and the rest of Europe. This has added complexity and uncertainly to their economic relations. It’s also created an opening for Canadian business, which enjoys a stable and ongoing trade relationship with the U.K., Canada’s fourth-largest trading partner. With FTAs in place with both the EU and the U.K., Canada can fill the gaps left by Brexit in sectors like agriculture, energy, finance and technology. 

         

How EDC connects the dots in Europe for Canadian businesses

Finding new customers, suppliers and partners, understanding the local business culture and trade laws, and working out the logistics of shipping your goods are just a few of the challenges of doing business beyond our borders. 

But you don’t have to go it alone. Canada has a network of trade-related organizations that work together to help you do business internationally. Working with the Trade Commissioner Service’s officers abroad, EDC can connect you with reputable and vetted local agents, distributors, lawyers, accountants, translators, cultural and linguistic interpreters, customs brokers, government representatives and potential buyers throughout Europe. 

We also offer solutions for financing, managing risk and growing working capital to help Canadian companies do business globally. 

Power your European expansion

    

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Trade Commissioner Service (TCS)

Canada’s TCS helps Canadian businesses expand by providing practical, actionable advice on foreign markets. The TCS in Britain and the EU provides on-the-ground intelligence to help Canadians navigate European rules and regulations, take advantage of existing trade treaties, and make timely and cost-effective decisions. It also helps connect Canadian businesses with international opportunities and funding and support programs through their worldwide network of trade commissioners.

TCS clients can be:

  • Small, medium or large companies  
  • Foreign divisions of companies registered or incorporated in Canada
  • Qualified clients represented by consultants, suppliers, agents and students 

 

    

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European Bank for Reconstruction and Development (EBRD)

Founded in 1991, the EBRD can help to identify new opportunities for Canadian companies doing business in select countries that are transitioning towards open, market-oriented economies. Because Canada is a founding member of the EBRD and an important contributor to its work, Canadian businesses can bid on EBRD-financed projects in Central and Eastern Europe, Central Asia, and the Southern and Eastern Mediterranean.

Canadian companies can also leverage the EBRD’s Trade Facilitation Program (TFP) to support transactions in the EBRD’s countries of operation, enabling you to seize opportunities in markets you may not have otherwise considered—confident that the EBRD will oversee and guide every project it backs.

         

Canada’s FTAs with Europe

Canada-European Union Comprehensive Economic and Trade Agreement (CETA) 

CETA eliminates tariffs on almost all goods traded between Canada and the European Union, and provides enhanced access to services, investment, government procurement and regulatory co-operation. CETA also creates new opportunities for collaboration in areas such as research and innovation, clean technology, digital economy and sustainable development. 

Canada-United Kingdom Trade Continuity Agreement (CANADA-UK TCA)

CANADA-UK TCA ensures that Canadian business will continue to have access to the Canadian market under the same terms as CETA. CANADA-UK TCA also provides for the continued elimination of tariffs on goods traded between Canada and the U.K. This gives Canadian exporters an advantage in U.K. markets and makes for greater stability of trade between the two nations. 

Canada-Ukraine Free Trade Agreement (CUFTA)
 

CUFTA was signed in 2016 and provides for the elimination of tariffs on goods traded between the two countries. It also includes provisions regarding non-tariff barriers to trade, like technical regulations and sanitary measures. CUFTA gives Canadian businesses greater access to the Ukrainian market. 


 


 

Interested in expanding to Europe?

Connect with EDC and watch your business flourish on the international stage. Answer some questions about your company and learn more about how EDC can help your company plan, connect and fuel your global expansion.

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More EDC market intelligence for Europe

 

*“Canadian exports total value” includes merchandise and services (excluding travel, commercial services, transportation and government services).

All figures for “Canadian exports total value” are from Statistics Canada

All figures for “GDP (nominal)” are from the World Bank

Date modified: 2023-12-20