Canada: Michigan’s Strongest Global Trading Partner

The Greater Lansing Business Monthly

Michigan has a unique relationship with Canada due to our close proximity to our friendliest neighbor and ally.  We all know the Canadians love their hockey, excel at the Winter Olympic Games, and make really good beer – eh! But how many people think about Canada much beyond that? The 3,854,082 square miles (or 9.984,670 km2 if you’re reading outside the United States) that make up Canada are often dismissed by U.S. citizens as the “51st state.”  It’s not well known that Canada is an important economic contributor and the number one international trading partner for Michigan—and the entire United States.

Over the years I’ve been fortunate to spend some quality time traveling to and through Canada for work and pleasure, visiting numerous cities, camping out (and the Canadian side of Niagara Falls is an absolute must-see). No matter where I’ve travelled in Canada, the people have always been more than friendly. Although they are relatively quiet when talking about U.S. politics, most of the Canadians I’ve encountered are envious of our comparatively low tax structure and have a love for American-made products.

Michigan’s relationship with Canada goes well beyond friendly faces and beautiful scenery, however. Canada is our state’s most important trading partner, which is a relationship that benefits our businesses and is responsible for thousands of jobs right here in the Greater Lansing area.

The Lansing Regional Chamber of Commerce partnered with Michigan State University’s Global Business Club to host the Canadian Consul General Roy Norton for a luncheon at the Kellogg Center in May. One hundred business and community leaders gathered to hear Lt. Gov. Brian Calley and Consul General Norton comment about the significant relationship between Canada and Michigan. Both speakers spelled out in specific detail the extent in which Michigan and Canada rely on each other for economic growth and prosperity. Below are some statistics and information that clearly demonstrate how intertwined our two economies are:

Trade

In 2010, Michigan exported over $44.5 billion worldwide. Canada bought 49 percent of Michigan’s exports, which was $21.7 billion of Michigan goods and services.

  • 36 percent – Amount Michigan increased exports to Canada compared to 2009
  • 362.4 billion – Total value of trade between Michigan and Canada, up 42 percent compared to 2009
  • $715 million – Amount of exports Greater Lansing sent to Canada in 2009
  • 33 percent  – Percentage of U.S. companies that export only to Canada
  • 25 percent – Percentage of U.S. oil imports come from Canada, who possesses the world’s second largest reserves after Saudi Arabia
  • $258 million – Amount Canadian citizens spent while visiting Michigan in 2009

2010 Top Michigan Exports to Canada

Transportation Equipment: $12.8 b

Machinery: $1.6 b

Primary Metal Manufacturing: $1.5 b

Oil & Gas: $1.3 b

All Others: $4.6 b

2010 Top Michigan Imports from Canada

Transportation Equipment: $27.8 billion

Oil & Gas: $4.0 billion

Primary Metal Manufacturing: $2.3 billion

Machinery: $852 million

All Others: $5.7 billion

Jobs

In 2010, 237,000 Michigan jobs depended on our two-way trade with Canada.

  • 9,500 – Ingham County jobs
  • 1,700 – Eaton County jobs
  • 2,500 – Livingston County jobs

Business

Michigan gains a net economic benefit when foreign-owned companies locate operations in our state.  They often purchase capital equipment, buy or lease facilities and hire local employees.  In 2010, the number of Canadian-owned businesses operating in Michigan grew to 710, directly employing 25,818 Michiganders.

Investment

The Canadian National (CN) Railroad, which runs from the West Coast, through Chicago, through Greater Lansing, and to Port Huron and Sarnia, employs 1,200 Michiganders, and is an absolutely critical piece of infrastructure facilitating global commerce for thousands of businesses along its path.

The proposed new international trade crossing is another example of Canada’s commitment to enhance trade with Michigan and the United States. The Canadian government has committed up to $550 million toward the project that will complement the existing Ambassador Bridge crossing and increase the flow of commerce between our two countries.

The Canadian government’s contribution will allow this important trade crossing to be built without Michigan taxpayer dollars, while creating nearly 10,000 jobs during the construction phase, and spin-off job creation calculated to be nearly 25,000 jobs. Gov. Snyder has taken this project to the next level by gaining approval from Washington, D.C. that will allow Michigan to significantly leverage Canada’s committed investment to secure approximately $2.2 billion U.S. federal dollars for improvements to Michigan roads and bridges, making this international project practically a no-brainer. Hopefully the politics will get sorted out soon and construction on this global economic driver will happen in the near future.

With such robust ties to Canada, the State of Michigan and the Greater Lansing area are working to continue to build upon the mutually beneficial relationship. Obviously, the new international trade crossing is a top priority. However, during his visit, the Canadian consul general pointed out the unique location of Port Lansing and its significance; Port Lansing is directly connected to Michigan’s two busiest border crossings with Canada, Port Huron/Sarnia with I-69 and Detroit/Windsor with I-96.

The leadership at Capital Region Airport Authority/Port Lansing and other regional stakeholders are working with Canadian and U.S. trade officials to optimize Port Lansing’s fortunate geography to add value to companies that move freight through the region, strengthen the region’s role in global logistics, and increase the amount of global commerce occurring in Greater Lansing.  Other areas around the country and the world have demonstrated that improving upon a region’s available international assets benefits business and creates jobs.

The Lansing Regional Chamber of Commerce, Michigan State University’s International Business Center, the U.S. Commercial Service, among other regional partners, are all available and eager to assist your company to make the most of the Canadian market. Canadians use many of the same goods and services as we Americans, and fortunately most speak English. These facts make Canada an obvious first place to start exploring export markets.

To learn more about Canada, Port Lansing, and international resources available in the region, visit www.portlansing.com or call 517-886-3716.

Brent Case is vice president of international business services at the Lansing Regional Chamber of Commerce. In this role, Case works with the Capital Region Airport Authority to increase the amount of global commerce being conducted in the Greater Lansing area.