A new report shows that Ireland’s goods exports to Canada reached a record high of €3.39 billion in 2022, while 2023 is set to be another record year, with exports in the first half of 2023 almost 90% ahead of the same time in 2022.
The report, by economist Jim Power, was commissioned by the Ireland Canada Business Association.
It reveals that Irish goods exports to Canada expanded by over 260% since 2016.
The growth in service exports has also accelerated at a rapid pace, increasing from €592m in 2010 to €2.88 billion in 2021, today’s report reveals.
Canada was the world’s eighth-largest economy last year, with GDP estimated at just over €2 trillion. It has a population of 37.4 million people, 14% of which claim Irish ancestry.
Ireland is the EU’s eight largest exporter to Canada, and today’s report claims that there is “enormous” potential to further grow the relationship significantly and double Irish exports of goods and services to Canada within the next five years.
“As a small open economy with a strong dependence on external trade, it would be extremely beneficial for Ireland to diversify its external trading relationships, and a G7 country such as Canada would offer significant potential in that regard,” economist Jim Power said
“Ireland is very heavily dependent on US companies now. Diversification would reduce Ireland’s concentration risk,” he added.
Meanwhile, the most recent CSO data show that Canadian direct investment in Ireland stood at €3.33 billion at the end of 2021.
75 Canadian companies operate in Ireland employing about 15,000 workers and it is estimated that the gross wage contribution from these companies is €750m, which generates employment-related taxes of €187m.
The net wage contribution that is injected into the local economy is estimated at €563m, according to today’s report.
This net wage contribution then finds its way into the local economy through the multiplier effect. A conservative multiplier of 1.5 is applied in this analysis, which means that the net wages injected into the local economy generates expenditure of €844m.
Canadian companies with operations here include Couche-Tard (Circle K); Great-West Life – the parent company for Irish Life and Canada Life, Irving Oil, Air Canada, Shopify, Greenfield Global, Celestica and Brookfield Asset Management.
Several Canadian banks also have operations in Ireland, including TD Bank, Bank of Montreal and Scotia Bank.
“Ireland has achieved great success in building a very strong relationship with the US, in trade and FDI terms. With a greater focus on Canada, there is no apparent reason why similar success cannot be achieved,” Jim Power concluded.