Question

1. What is an advantage of foreign market direct investment to Canadian retailers?
Explain a disadvantage of this method?

Answer 1

FDI advantages in Canada:

A skilled workforce
A friendly market environmentLarge coal, oil and ore reserves
Unparalleled consumer access (ALENA) with a large financial industry and a large anchor in foreign trade
A competitive economy, with 30 million customers on the market
Sophisticated infrastructure, as well as a very advanced network for transport.

FDI Drawbacks in Canada:

Strong exposure to the U.S. economy , especially exports to the U.S. Vulnerability to foreign product prices and government revenues dependent on oil
Strong household debt in some regions (mainly for housing)
A decline in processing sector productivityA decline in the working population due to ageing