Experts advise Canadian companies on ways to build resiliency in uncertain markets

“Uncertainty” is the clear sentiment among many Canadian companies today, as they race to preserve their current export and import arrangements amidst looming trade tariffs from the US, navigate cross-border risks like foreign exchange, or strive to forge new trade partnerships in unfamiliar markets.

In light of these imperatives facing Canadian businesses, Scotiabank has curated the perspectives of a variety of specialists on the global trade frontlines, including representatives from Export Development Canada (EDC) and Scotiabank’s own senior advisors from its global transaction banking, trade finance and capital markets divisions.

“Right now is a crucial moment for Canadian business leaders, as they look for guidance to help manage the volatility ahead,” notes Scotiabank’s Dyanne Carenza, Vice President, Global Trade & Working Capital Solutions. “When you consider Scotiabank and our strong track record supporting clients in complex environments along with our experienced team, long history and unique global footprint –  and EDC, Canada’s highly-respected export credit agency, who are known as ‘Canada’s international risk experts,’ together, we can share insights to help small, medium and large enterprises diversify their trade, mitigate the risk and seize global opportunities.

For any business leaders wondering if they can just ride out the current volatility, top global trade observers suggest that current conditions are not a temporary ‘blip.’

Ross Prusakowski, EDC’s Deputy Chief Economist, opines that, “While the uncertainty we see today may diminish and change, it is not likely to go away.”

While Prusakowski anticipates mixed growth results among the ‘three pillars’ of the global economy (China, Europe and the US) – along with uncertainties around tariffs – he suggests that the key for Canadian companies will be to closely monitor developments and talk with their financial partners at Scotiabank or EDC, to help understand the changing global trade environment.
 

Managing near-term uncertainties

With this outlook of near-term uncertainties, financial and trade advisors point out that there are tangible strategies for Canadian companies to navigate through immediate liquidity and foreign exchange (FX) challenges.

Joben Lopez, EDC’s Regional Director, Prairies, highlights how EDC “can provide companies with unique access to working capital, insurance to mitigate trade counterparty risk, or financial guarantees to offset the costs of doing business internationally.” 

Lopez mentions EDC’s recently announced $5 billion Trade Impact Program, to support eligible companies across a range of products, adding that, “Scotiabank commercial or corporate clients that have been impacted by the tariffs have the opportunity to participate in this program, through their Scotiabank relationship manager.”

“FX can have a huge impact on the profitability of your cross-border business, and it’s never too late to manage it,” affirms Daniel Ryan, Director, Commercial FX Sales. “The most successful clients take the guesswork and gambling out of it by working with us to build a proactive framework for hedging their currency risk.”
 

Building resilient business in the medium-term

Turning to the medium-term needs of companies as they adapt to shifting trade realities, Lopez describes how EDC also helps companies discover new markets or supply chains, through EDC’s ‘trade creation’ services, and 23 global offices: “For example, if a company wishes to find new markets or diversify their supply chains, EDC along with its in-country representatives could help you understand the market, validate a new overseas supplier or recommend ways to increase trust between new partners.”

As evidence of EDC’s impact, Felipe Sanmiguel, EDC’s Country Head in Mexico, outlines the export agency’s impressive 25-year history in Mexico: “We’ve helped 10,000 Canadian companies and facilitated over $40 billion in business, not just through financing, but also by providing market insights, local connections, and risk management tools to help you succeed in Mexico, whether you are an experienced exporter, or you’re just getting started.”

Financial sector experts also emphasize the importance of Canadian companies taking a proactive approach, to prepare for unfolding opportunities and challenges, particularly FX considerations.

Ryan explains how his team can help clients identify their risks, set goals to manage them, with an array of potential hedging solutions – so an otherwise good business year isn’t ruined by FX losses. “By spending about an hour thinking this through with our team, we have templates and tools to help you put a sound strategy in place, and it can create long-term, lasting success,” he notes.
 

Silver lining in dark clouds

Although this cross-section of global trade commentators agrees there are dark clouds on the economic and trade outlook, there’s also consensus that there could be a ‘silver lining’ for Canadian businesses, if they reorient their thinking to new trade patterns, relationships and investments. Among them, EDC’s Sanmiguel observes that, “It definitely is an opportunity, and an eye opener, to get out of your comfort zone, look at new markets and trade partners, and the EDC and Scotiabank are here to help.”

Similarly, Amit Sharma, Director, Trade Finance, Commercial Sales at Scotiabank, urges business owners to reach out to their banking relationship managers early on, when exploring any trade growth ambitions: “When you are looking at new markets or supply chains, there is always a ‘payment or performance risk’ for both parties, and there are many ways to minimize that. It is highly recommended that you talk with your Banker and EDC before you negotiate any commercial contract, so you will know your options and sign a contract that is in the best interest of both the parties.”

Canadian companies can leverage Scotiabank’s deep expertise built over several decades and a wide suite of banking solutions, including trade finance, as they try to establish or expand their presence in the country. In fact, this calibre of advice and support has earned Scotiabank considerable accolades from its clients and industry peers, most recently for being named by Euromoney as ‘Best Bank for Trade Finance Products in Mexico and Latin America.’

Dyanne Carenza of Scotiabank sums it up with pragmatic, practical wisdom: “It’s important to remember that over the years, Canada has negotiated many solid bilateral trade agreements, with Europe, Latin America, the Indo-Pacific region, among others, and there are many resources, at Scotiabank and EDC, to guide you, to support diversification, manage risk, and position your business to enjoy these opportunities.”

Connect with us today to learn more about tailored trade solutions to meet your needs.