The protocols to follow in this new COVID-19 world are a moving target, and for those who deal with importing and exporting in Canada, it’s extremely stressful. The severity and the duration of the coronavirus is unknown, which is mainly why the situation is uncharted territory.
Whether you import and export on a large scale or you are just concerned about ordering items online or shipping on a smaller scale, this is important information you need to have right now.
Food Animals and Plants
If your business involves importing anything related to food, animals or plants you need to make sure you have the latest information about restrictions and regulations surrounding the virus here at the government website.
Per the CBSA site, The Safe Food for Canadians Regulations (SFCR) are in effect. As of January 2019, commercial importers of certain foods require a valid Safe Food for Canadians (SFC) license to import food into Canada. Other commercial importers will have until July 15, 2020, to comply with the regulations, but are advised to apply for a license as soon as possible to avoid disruptions. As of January 15, 2020, importers who currently require an SFC license and do not have one may experience delays or refusal of entry of their shipment at the border and may be subject to other enforcement actions. For more information, including SFCR timelines and guidance, please refer to the Canadian Food Inspection Agency website.
Hope in Brexit
Troy Media reports that the temporary suspension of beef and pork exports from Canada to China in 2019 cost the industry almost $100 million, signaling both the size and strength of this industry in Canada.
The European Union’s tough quality assurance rules mean CETA hasn’t delivered for Canadian farmers. Brexit could be a light at the end of the tunnel.
Both Canadian and U.K. governments would be wise to begin trade talks and agree to a streamlined quality assurance process that encourages farmers to export meat and agricultural products.
Concerns about how the virus is spread
In terms of goods coming into Canada, there are currently no cases which have shown any evidence of humans being infected with the new type of coronavirus by the consumption of contaminated food or via imported toys. There are also no known reports for other coronaviruses about infections due to food or contact with dry surfaces. Transmission via surfaces that have recently been contaminated with viruses is, nonetheless, possible through smear infections. However, this is only likely to occur during a short period after contamination, due to the relatively low stability of coronaviruses in the environment.
Can imported goods from regions where the disease has spread be sources of an infection in humans?
Due to the transmission methods recorded thus far, and the relatively low environmental stability of Coronaviruses, it is unlikely that imported goods such as imported foods or consumer goods and toys, tools, computers, clothes or shoes may be sources of an infection with the new type of coronavirus, according to the current state of knowledge.
What does the border closing mean?
A recent article in Politico reports that government officials promise that the closing of the U.S.-Canada border to stem the spread of the novel coronavirus won’t affect trade between the two partners, but a slowdown may be inevitable as the two countries work out what business purposes should be deemed “essential.”
Prime Minister Justin Trudeau said Wednesday that deliveries of food, fuel, and medicines would continue under the agreement. But for a binational relationship with tight cultural and commercial ties, many specifics remained unanswered.
Trusted trade programs borne out of the 9-11 crisis — FAST, Partners in Protection and the Customs-Trade Partnership Against Terrorism — also offer a starting point for security officials to determine which businesses should have priority to cross.
It’s easy to get lost in numbing statistics about vast dollar figures, but consider this: Nearly 9 million American jobs rely directly on trade and investment with Canada. More than half of all the goods and services Canada imported in 2018 came from the United States. Every billion dollars worth of U.S. agricultural exports to Canada supports about 8,100 U.S. workers. Canada is the No. 1 agricultural-export customer for 30 U.S. states. Canada was the second-biggest direct investor in the U.S. in 2018.
It cuts just as deep the other way: 90% of Canadian energy exports are consumed by Americans. Just over 75% of all Canadian merchandise exports are bought by Americans. The United States was the single largest foreign investor in Canada in 2018.
As both countries struggle to contain the coronavirus, bear in mind that we sell one another vast amounts of pharmaceuticals and medical devices. As one writer in Barron’s puts it, “We are literally saving each others’ lives.”
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Threats to the supply chain
Supply chains are being disrupted due to COVID-19 even more so than they were with SARS because 10% of unfinished products used to make final goods in Canada are sourced from China, which has been leveled by the coronavirus. An additional 4% are sourced from Italy, South Korea, and Japan, which have also suffered a veritable standstill due to the virus.
As coronavirus spreads, small business owners who import from China are on edge.
For small business owners who sell products on Amazon, prolonged factory closures threaten supply, and falling out of stock can mean losing a prized ranking on Amazon’s site.
Financial Times reports that Chinese exports have plummeted by 17% in the last few months.
Some of the largest Chinese exports affected are:
From printers to mobile phone manufacturing to PCs to set-up boxes and inverters–so much is sourced from China. Similarly, copper, aluminum, and chemicals in electronics manufacturing are sourced from China as well.
Importers are also relying heavily on China for many other goods–pharmaceutical and leather goods are heavily hit. There is no doubt that the disruption to the supply of raw materials from China hurts local industries.
What can you do to adapt?
Globalnews.ca Reports that small businesses can apply for COVID-19 wage subsidy. Check out this link for more information.
As an importer, it behooves you to seek alternate supply chains for your business. Going forward it is probably best to diversify suppliers and not have all your needs being met by one factory. While we are all in a wait-and-see mode it is a good time to explore other manufacturing options, especially those that would bolster the economy here at home.
If your business is dependent on Amazon, The New York Post reported on March 23rd that Amazon Prime is taking as long as a month to deliver some items that usually arrive in two days as the coronavirus pandemic slams the e-commerce titan.
Items such as NutriBullet blenders, computer cables and best-selling books would not be delivered until at least April 21 if ordered on Monday, Amazon listings showed. Shoppers could normally get those products within two days with an Amazon Prime subscription, which offers free express shipping for a monthly fee.
Ottowa-based e-commerce platform Shopify is offering resources and advice to small businesses: Shopify Inc. has more than a million merchants using their service, so the company has been aggregating business resources and advice for companies struggling in the face of economic turmoil.
The company has launched a COVID-19 page here. The company is also saying it will make $200 million in loans available to merchants through the Shopify Capital program.
A solid strategy for exporters
If you are an exporter, you need to have a solid risk management strategy in your toolbox for times like this. It is important to get ahead of the problem and be proactive, rather than reactive to the crisis at hand.
These are four important ways to strategize:
- Lowering Risk. Do you have a backup plan? If you manufacture product overseas, you need to explore manufacturing locally. If you’re selling internationally, are you selling to different markets or are you relying on one particular customer? Should currency fluctuate, do you have a strategy in place for foreign exchange?
- Risk sharing. If you are focused solely on one product line you may want to branch out, so that if one side of your business takes a hit you have another business that is still healthy. Diversification is the answer.
- Risk reduction. Get the right professional help with your contracts. Allow for contingencies for working capital.
- Risk transfer/insurance. The biggest asset on your books is accounts receivable. Amira Dali, Senior Accounts Manager of EDC’s Commercial Markets and Small Business advises, “If you’re a company that’s working with customizable goods, do you have contract cancellation insurance in case your contracts get canceled and you’ve already incurred all those costs? If your goods are transported through the sea, do you have marine cargo insurance? Depending on the industry you’re in, sometimes your contracts have letters of credit or bonding needs – performance bonds, advance payment bonds – are you protected? Do you have wrongful call insurance?”
Protection from payment default
The risk of non-payment as a result of Covid-19 is top of mind for many Canadian exporters. Dali says credit insurance is essential to protect your business.
Check out this link for more about the EDC’s COVID-19 Business Credit Availability Program (BCAP).
Protecting your workplace
The WHO offers these valuable guidelines for getting your workplace ready for COVID-19 on their site. It is critical to start doing these things now, even if the virus has not arrived in the communities where you operate. You can already reduce working days lost due to illness and stop or slow the spread of COVID-19 if it arrives at one of your workplaces.
- Make sure your workplaces are clean and hygienic. Surfaces (e.g. desks and tables) and objects (e.g. telephones, keyboards) need to be wiped with disinfectant regularly. Why? Because contamination on surfaces touched by employees and customers is one of the main ways that COVID-19 spreads.
- Promote regular and thorough hand-washing by employees, contractors, and customers by putting sanitizing hand rub dispensers in prominent places around the workplace. Make sure these dispensers are regularly refilled and posters promoting hand-washing are on display – ask your local public health authority for these or look on www.WHO.int. Combine this with other communication measures such as offering guidance from occupational health and safety officers, briefings at meetings and information on the intranet to promote hand-washing. Make sure that staff, contractors and customers have access to places where they can wash their hands with soap and water. Why? Because washing kills the virus on your hands and prevents the spread of COVID-19.
- Promote good respiratory hygiene in the workplace. Display posters promoting respiratory hygiene. Combine this with other communication measures such as offering guidance from occupational health and safety officers, briefing at meetings and information on the internet, etc. Ensure that face masks and/or paper tissues are available at your workplaces, for those who develop a runny nose or cough at work, along with closed bins for hygienically disposing of them. Why? Because good respiratory hygiene prevents the spread of COVID-19.
- Postpone all business trips unless it’s absolutely critical to the operation of the business.
- Brief your employees, contractors and customers that if COVID-19 starts spreading in your community anyone with even a mild cough or low-grade fever (37.3 C or more) needs to stay at home. Proactively, you can elect to send as many employees home to work remotely if possible to avoid interaction with other employees at this time. They should also stay home (or work from home) if they have had to take simple medications, such as paracetamol/acetaminophen, ibuprofen or aspirin, which may mask symptoms of infection. Keep communicating and promoting the message that people need to stay at home even if they have just mild symptoms of COVID-19. Display posters with this message in your workplaces. Combine this with other communication channels commonly used in your organization or business. Your occupational health services, local public health authority or other partners may have developed campaign materials to promote this message. Make clear to employees that they will be able to count this time off as sick leave.
What is the government doing?
A great way to aid in this war on the coronavirus while also making up for some lost revenue is putting your facility to use for the cause. If you are a Canadian manufacturer or business that can assist Canada in meeting the need for medical supplies, your help is needed.
If you can say yes to the following, get in touch by checking out the link below:
- You manufacture in Canada and/or have ready access to necessary inputs through your supply chain.
- You have equipment or facilities that can be rapidly re-tooled to meet medical needs, including for personal protective equipment (PPE) such as gloves, masks, and surgical gowns; sanitizers; wipes; ventilators; and other medical equipment and supplies.
- You have skilled workers who are able to respond and who could be available for work in the current circumstances.
The Plan to Mobilize Industry to fight COVID-19 directly supports businesses to rapidly scale up production or re-tool their manufacturing lines to develop products made in Canada that will help in the fight against COVID-19.
The National Research Council’s Industrial Research Assistance Program will build on its existing relationships with thousands of Canada’s most innovative small and medium-sized businesses to pose challenges to the marketplace for innovative solutions to fight COVID-19. The most promising solutions will be selected for procurement, working with Innovative Solutions Canada.
Send a short summary of your offer to firstname.lastname@example.org.
See this site for all details.
The cannabis industry is booming in places like Colorado and California, and you might think since we have an over-supply here in Canada that we would pursue global markets and our government would support those efforts, but that is not the case. An article in the Financial Post makes a good case for exploring these vastly untapped markets. There has been an inability to get product to markets. This is especially the case in Ontario, where the roll-out of retail stores has been and continues to be painfully slow. As the Post points out, “some estimates put the global medical cannabis market at US $44 billion by 2024. For the Canadian cannabis industry, which was one of the first out of the gate, that’s an opportunity we shouldn’t miss.”
Clearly, COVID-19 is not only disrupting the way we live our lives and the way we do business, but it is also creating an opportunity to step back, examine the situation and explore how Canadian businesses both large and small can make more sustainable choices for the future health of their business, and the Canadian economy.