By Michael Darch
High unemployment, a stagnant economy, and little opportunity – that is the impression I had of Spain before embarking on the Consider Canada City Alliance investment mission to Europe last week. But that is not what I found once we landed in Madrid. In fact, there are many Spanish companies that are riding out the European financial crisis well.
Admittedly, Spain’s domestic economy is not well. The infrastructure boom around building high speed trains, new highways and subway lines is a thing of the past. The same is true of virtually every other country in the EU, with the possible exception of Germany.
Cognizant of this reality, successful European companies are looking outward to Asia, the Middle East and North America. Business models are shifting to generating revenue outside the European Union. Asia, Africa, the Middle East all have different cultures, different business styles and relatively high risk. North America offers opportunity and more cultural similarity with lower risk.
The move away from domestic to foreign investment creates opportunity for Canada. Our investment meeting schedules arranged by Invest in Canada, the Canadian Embassy in Madrid, and The Confederation of Employers Organizations (CEOE) Internacional clearly demonstrated this. Montreal had so many requests for meetings, that I helped Elie Farah, Vice President Investment, of Montreal International, by taking some of his meetings. As we prepared for these meetings, we noted that many of the Spanish companies are already active in Canada and looking for further expansion.
Canada is entering a super cycle of infrastructure development. Jayson Meyers of the Canadian Manufactures and Exporters outlined a minimum of $800 billion in anticipated energy, mining and municipal infrastructure projects planned in Canada over the next 10 years.
Spanish companies did their homework and were eager to learn more from our Consider Canada team. We were not dealing with “tire kickers”, we were talking to mature companies with healthy balance sheets. They are looking for that elusive combination of stable, low risk economies with a strong backlog of projects. Our timing could not have been better.
An important added bonus, and the motivation for our trip, is the Comprehensive Economic and Trade Agreement (CETA) recently agreed to in principle between Canada and the European Union. Final definition of details and ratification by parliaments puts implementation two years away. No other country has agreements that link the $16.6 trillion EU market to the $18.6 trillion North American market. Investing in Canada is a sound diversification move for Spanish companies.
Great to have a three city tour kick off on such a high note.
Michael Darch is the founding President of the Consider Canada City Alliance Inc.