4 Considerations for Canadian Companies Entering the US


December 9, 2021

Canada and the US are similar in many ways. They share a border, a common language, and time zones. However, there are some considerations that Canadian companies need to keep in mind when they expand into the US.

Canada’s tech ecosystem has seen strong growth. C$11.8 billion has been invested so far this year in Canadian startups, according to the Canadian Venture Capital & Private Equity Association. However, seed investing is slowing in Canada, which is a cause for concern, and the war for talent is fierce, according to Real Ventures. It would help for Canadian startups to expand into the US to get more access to venture capital investment, and the war for talent is even more difficult in the US, which is why it helps to have a partner like Alariss help match you with top US sales and business development talent.

Here are four considerations that Canadian companies need to consider when entering the US.

1. The US economy is growing fast, which is expected to continue in 2022.

Economic growth is strong in the US. Real GDP in the US is expected to increase by 5.6 percent in 2021, according to the OECD. Furthermore, it’s expected to rise by 3.7 percent in 2022.

The US’ GDP growth is projected to be above the OECD average, while Canada’s is projected to be below the OECD average.

Since the US economy is growing faster than Canada’s, Canadian companies will be able to scope more growth opportunities in the US, which will help them scale faster and attract new investors.

2. The US is a competitive and fast-moving economy.

The US has a wide variety of business activities, ranging from finance to technology. Because the US is so competitive, some companies launch and fail in the US.

For instance, the German digital bank N26 recently withdrew from the US because it was difficult to compete with the major US banks.

The US invests more in technology than Canada, according to a report by Deloitte. Manufacturers in Canada spend 66 percent as much as US manufacturers on technology investment per worker, according to Deloitte. Financial service firms in Canada spend 80 percent as much as US financial firms on technology investment per worker. In addition, the US invests more in R&D.

3. Labor laws differ in the 50 US states.

When you’re hiring in the US, it’s important to keep in mind that labor laws and other laws differ in the 50 US states. As a result, Canadian companies should identify the right region of the US for their operations. Where are clients located to optimize your growth?

4. Globalization 3.0 provides a unique opportunity in the US market.

The Fourth Industrial Revolution, coined by World Economic Forum founder Klaus Schwab, is the digital revolution taking place now. And at Alariss, we believe that we are currently in a third wave of globalization. The first wave of globalization was colonialism. The second wave was developed countries outsourcing to emerging markets. And Globalization 3.0, which is happening now, is people around the world collaborating in a remote environment.

During this wave of globalization, it is a great time to expand into the US. However, you need specific knowledge of markets in the US and how they will proceed in the coming years.

Moreover, talent needs to be productive, which is the case in the US. The US’ labor productivity growth is forecast to exceed the OECD average, while Canada’s labor productivity growth is forecast to lag behind it, according to the OECD.

The high productivity in the US means that you will need to pay good salaries to attract US employees, but it will be worth it. They will provide local, sector-specific knowledge that will be invaluable.

If you’re building a Canadian company interested in expanding into the US, it would help to have a local sales and business development professional in the US representing your interests. Alariss matches you with top US sales and business development talent and acts as the Employer of Record (EOR), so that you don’t have to worry about finding the right talent or legal compliance. If you’re interested, sign up today.


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