Denmark is Canada’s neighbour in the North. We have one of the world’s most open economies and one of Europe’s strongest, characterized by a balanced budget, a stable currency, low interest rates and low inflation.
Furthermore, the World Bank’s 2018 index ranks Denmark as the No. 1 country in Europe for ease of doing business. This ranking shows that the regulatory environment in Denmark is responsive to business needs. Danish society is innovative and its overall business environment is favourable for entrepreneurs.
Danish-Canadian trade has taken an upward turn over the last couple of years. The import of Danish products into the Canadian market accounted for approximately $1.1 billion in 2017, which is an increase of 41 per cent over 2016. Among the most important product groups are medical and pharmaceutical goods, which topped $374 million.
Meanwhile, the import of Canadian products into the Danish market added up to $360 million in 2017. Primary imports include fish, crustaceans and molluscs, worth $192 million. Other Canadian imports to Denmark include soy beans, pharmaceuticals and medical products. The nature of the exchanges between our two economies shows that Canada and Denmark are in a number of supply chains together.
Denmark exports $700 million worth of services to Canada, whereas Canada exports $460 million worth of services to Denmark.
Danish companies also invest in the Canadian biopharmaceutical sector. For instance, Novo Nordisk, a Danish global health care company, has built warehouses and invested in a new head office and research and development operations in Mississauga. Danes also invest in clinical trials and research in life sciences. The Leo Innovation Lab in Toronto is an example.
While Denmark has a trade surplus with Canada, we are currently suffering an investment deficit. Denmark’s overall direct investment in Canada was $1.9 billion in 2016, whereas Canada’s direct investment in Denmark stood at just $380 million.
More recent Canadian investments in Denmark include cannabis companies that not only produce medical cannabis, but also conduct research, administration and distribution. There is a case for Canadian companies placing extraction facilities in Denmark because of our highly innovative pharmaceutical industry. Canadians are currently investing about $400 million in this field in Denmark, creating hundreds of jobs. Other Canadian investments in Denmark centre around the clean tech and IT sectors.
Business investments in Denmark profit from an attractive macroeconomic climate and competitive conditions with regard to taxation and labour costs. Investors receive tax advantages, companies benefit from favourable rules on depreciation and the Danish workforce is highly educated and among the most efficient in Europe. Furthermore, we have Europe’s most flexible hiring and firing legislation, reducing the risk to companies as they expand.
In the past year, bilateral trade in merchandise between Denmark and Canada has increased and in the previous year, it had jumped by 41.4 per cent. It’s probably not a coincidence that the Comprehensive Economic and Trade Agreement between Canada and the EU has been in place since September 2017. I believe CETA had a role in this increase as it has made it easier and cheaper to export goods and services between our two countries. This benefits companies and consumers.
Over the past six years, Denmark’s economy has grown rapidly. Real GDP growth accelerated from 0.2 per cent in 2012 to an estimated 2.1 per cent in 2017. Our growth rate has exceeded the EU average since 2007.
According to IMD World Competitiveness Rankings 2018, Denmark is (like Canada) among the world’s 10 most competitive economies. With Denmark ranking No. 1 for ease of doing business in the EU and as a good gateway into the European market, I see a great business case for increased activity among Danish-Canadian value chains and for more Canadian investment in Denmark.
Thomas Winkler is ambassador of Denmark. Reach him at thowin@um.dk or (613) 797-2689.
