Canada in Mexico

MEXICONOW Staff Report

The Canada-Mexico relationship is characterized by sustained political engagement and regular dialogue in the bilateral North American context. Dialogue is pursued from periodic high-level consultations to inter-parliamentary meetings and the North American Leaders Summits, to more institutionalized mechanisms such as the innovative Canada – Mexico Partnership (CMP), established in 2004, which aims at promoting collaboration between the public and private sectors.

Prime Minister Stephen Harper, together with Enrique Peña Nieto, President of Mexico, in February 2014 announced a renewed 2014-2016 Canada – Mexico Joint Action Plan that outlines four priorities for the bilateral relationship:

  • Fostering competitive and sustainable economies
  • Protecting citizens of both countries
  • Enhancing people-to-people contacts, and
  • Projecting the partnership regionally and globally.

The relationship between Mexico and Canada has continued to grow since the establishment of diplomatic relations in 1944. Its trade and investment relationship has been with sustained growth since the entry into force of the North America Free Trade Agreement (NAFTA) in 1994. Today, bilateral trade and investment are increasing.

Canada and Mexico strengthen bonds now days by bilateral security dialogues; collaboration with its common neighbor, the United States, in areas such as security, competitiveness and the environment; as well as international and regional cooperation in forums such as the United Nations and the Organization of American States.

Canada and Mexico are each other’s third largest trading partner. Exhibit 1 summarizes the Trade Balance between Mexico and Canada. It shows that commerce between the two countries reached its maximum level in the year 2012 (US$20.83 billion). This certainly reflects the excellent moment that the bilateral relation is now having. The bilateral commerce historically used to be negative from Mexico, but that trend has been reversed with positive results since the year 2009 to today.

Several important factors in the trade balance between Mexico and Canada are revealing. Take, for instance, the fact that during the 13 year time span from January 1999 to December 2013, total exports from Mexico to Canada increased from US$2.31 billion to US$20.45 billion. And at the same time, imports from Canada to Mexico also showed an impressive growth from US$2.95 billion (1999) to US$9.85 billion (2013). These are impressive rates of growth in international trade, bolstered by NAFTA.

Total commerce between the two countries and reciprocal action brought in US$ 20.30 billion during 2013 in trade between the two partners and has consistently been with sustained growth or similar figures, especially from the period since 2011. This was when, for the first time, that total commerce “stats” were available identifying the US$20 billion. And another interesting detail is that in 2013 there was a little decrease of 2.53% in commerce (US$20.30 billion) in comparison with (US$20.83 billion) in 2012.

Exhibit 2 shows Canadian Investment in Mexico. During the period from January 2000 through June 2014, companies with capital from Canada invested US$2.2 billion.

Among the leading Canadian companies investing in Mexico are Bombardier, Scotiabank, Magna, TransCanada Pipelines, Air Canada, Palliser, Apotex, Linamar and Martinrea. Special mention that Canada is also the largest foreign investor in Mexico’s mining sector leaded by GoldCorp. 

GoldCorp is one of the world´s fastest growing senior gold producers with operations and development projects throughout the Americas and is headquarted in Vancouver. The Company employs over 19,000 people and its operating assets include four mines in Canada and the U.S., three mines in Central and South America and three mines in Mexico. Peñasquito is Mexico´s largest gold producer. In 2014 gold production totaled 567,800 ounces.

Martinrea International Inc. is a leader in the production of quality steel and aluminum metal parts, assemblies and modules and fluid management systems focused primarily on the automotive sector. As a Tier One supplier we serve all the most important vehicle manufacturers as well as automotive suppliers but we also serve other industrial sectors worldwide. This company has operations in Ramos Arizpe, Saltillo, Silao, Hermosillo and Queretaro.

Bombardier Aerospace’s established manufacturing operations in Queretaro in 2006 and complement the company’s other existing manufacturing sites. Operations in Mexico currently counts more than 1,800 employees and allows Bombardier to develop a manufacturing capacity that lessens its reliance on third parties for structural aircraft components and greatly contributes to the reduction of operating costs and increased profitability. In 2012, Bombardier announced a total investment of US$500 million, which included several programs for the manufacture of structural components and electrical harnesses for most of its business and commercial aircrafts, the Learjet 85 program and the recent investment program for the Global 7000 and Global 8000.

Magna currently has 30 plants in eight states in Mexico to produce electronic components and other automotive products. The production facilities are located in the states of Coahuila, Nuevo Leon, Tamaulipas, San Luis, Sonora, Guanajuato, State of Mexico and Puebla. Overall Magna employs 23,450 employees with annual sales of US$2.8 billion.