Research conducted by the Canadian Federation of Independent Business (CFIB) with the assistance of its American counterpart, the National Federation of Independent Business (NFIB) and the participation of the U.S. Embassy (Ottawa) reveals a number of challenges and obstacles small- and medium-sized enterprises (SMEs) must overcome in order to be able to successfully conduct business across the border.
Earlier this year, Canada and the U.S. issued a declaration on the countries’ shared border. The objective of the pact was to ‘streamline and decongest’ the Canada-U.S. border, as well as find ways to reduce and prevent regulatory barriers to cross-border trade. A high-level commitment to improving the efficiency of the border will reduce the costs of doing business, enhance security and facilitate trade. “A Canada-U.S. border that is more effective, secure and trade-friendly will increase Canadian competiveness and create jobs on both sides of the border,” stated CFIB vice president, national affairs, Corinne Pohlmann.
CFIB’s policy brief, Border Barriers: SMEs Experience With Cross-Border Trade involved interviewing 12 small business owners: eight Canadian and four American. This report offers mixed results from Canadian small business owners about their experiences with border agencies on both sides of the border.
The number one obstacle in cross-border trade for smaller companies relates to the complexity of the process and its related paperwork. The data shows the common thread in the problems faced by small business is the varying requirements of government agencies and complicated rules and regulations. “And, although the requirements of any one entity may not be unreasonable, it is the combined effects that impede SME participation in cross-border trade,” said Pohlmann.
“Simple measures, such as providing information in plain language, making information sources readily accessible and easy to find, providing contact information (email/telephone) to respond to questions and creating a one-stop web portal with trade and border information specific to SMEs, will help address some of these issues,” said Pohlmann. Adding, “With this in mind, the brief offers policy maker’s practical recommendations on how to make trade and border processes more small-business friendly.”
As both Canada and the U.S. have a strong entrepreneurial presence with SMEs accounting for half the GDP, more than half of employment and the bulk of net new jobs, this research offers ways to encourage cross-border trade. By focusing on small-business friendly policies, making an extra effort to provide information and services geared to small business’ unique needs, and creating a culture of service and understanding of small business challenges within the Canada Border Services Agency (CBSA) and U.S. Customs and Border Protection (CBP) may help to encourage more small firms to take the plunge and start looking to other markets to grow and expand their business.