International Trade Strategy for Manitoba
Prepared by The Council on International Trade

Section II Current State of Trade and Exports in Manitoba

Trade and the Manitoba Economy

Manitoba's economy has a long and deep association with trade. Indeed, for almost 200 years, Winnipeg and the Hudson's Bay Company were the centre of the fur trade for all of North America as well as the major distribution centre for many other products and services. Manitoba's location in the middle of the continent has always made it ideal as a centre for international trade. The recent development of CentrePort Canada, an inland port destined to be Canada’s centre for global trade is, in many ways, a reaffirmation of the importance of Manitoba as a key player in international trade.

It has often been said that Manitoba's economy is "one mile wide and one inch deep." Although an exaggeration, the statement nevertheless makes the point that the economy of Manitoba is highly diversified and, although a notable number of large businesses are major players in the international marketplace, the bulk of the businesses in Manitoba are SMEs. There is a lack of data on the international trade activity of Manitoba SMEs, but national data indicates that there is considerable potential for growth.

For Example:

>	Exporters entering new markets make important contributions to Canada’s export performance. Between 2000 and 2006, new entrants accounted for all of the growth in exports.
>	Not only is the diversification of Canada’s export markets shown to be driven by new entrants, but it is the small and medium-sized enterprises (SMEs) that are at the forefront of this diversification.
>	The number of Canadian exporters peaked in 2004 and has trended down since then. This decline in the number of exporters since 2004 is largely due to SME exporters departing the U.S. market.
>	The share of SMEs in the Canadian exporter population remained stable at 95 per cent over the period, but their contribution to total Canadian exports increased to 35 per cent in 2006 from slightly more than 25 per cent in 1999.
>	Between 1999 and 2006, many Canadian SME single-market exporters expanded into non-U.S. markets to become multi-market exporters.

The share of multi-market exporters in the total SME exporter group rose from 16 per cent in 1999 to 25 per cent in 2006, an increase of nine percentage points. By comparison, the share of multimarket exporters among larger-sized firms only increased by five percentage points over the same period, from 54 per cent to 59 per cent.²

Therefore, for Manitoba to increase its success in international trade, a major focus must be on improving the international trade capability of its dominant business group – SMEs.

New exporters often go through a learning exercise of building exports to other provinces and the United States. In addition to learning some of the skills required to access new markets, developing larger markets in North America also provides cash flow for companies to support their offshore market development efforts.

² Canada’s State of Trade 2010, Foreign Affairs and International Trade Canada http://www.international.gc.ca/economist-economiste/performance/state-point/state_2010_point/2010_7.aspx?lang=eng