Canadian compa-nies are coping with the strengthening dollar by selling their goods through affiliated companies abroad at a pace outstripping exports, says research from Export Development Canada.
The findings, released Thursday, indicate Canadian firms may be more advanced in their search for new non-traditional markets than previously believed. Furthermore, this move, the Crown agency said, represents a big shift in Canadian exporters' sales strategy as they respond to rapid changes in the global economy -highlighted by the strength in emerging economies.
Growth in sales through Canadian-owned foreign affiliates reached $508 billion in 2008, which translated into twice the growth rate in Canadian exports for much of the last decade, according to the analysis.
"This illustrates how moving away from a traditional export-based model can help exporters successfully adapt to the strength of the Canadian dollar and profit from strong demand growth in developing economies," said Jean-Fran-cois Lamoureux, part of EDC's corporate and trade intelligence unit.
"Much is made about Canada's productivity challenge, but given the reality of a protracted high Canadian dollar, it seems that Canadian exporters have used their capital efficiently by taking advantage of the strong loonie to invest overseas."
This move by Canadian producers is referred to as integrative trade, which measures the combination of exports and imports of goods and services as well as outward and inward foreign direct investment in order to maximize efficiency, competitiveness and sales.
