The Great American Export Conundrum
Let’s dive, shall we? Nearly 40% of InnovMetric’s revenue is flowing like a stubborn river from the United States—so much for a friendly neighbor, huh? But fear not! Marc Soucy, the fearless president of InnovMetric, assures us that while the U.S. market may be their fourth in license sales, it’s second in revenue. Sounds like a romantic relationship, doesn’t it? At least nobody’s ghosting anyone!
Now, about those elections—oh, here we go. Marc has seen a fair few American political theatrics over his 30-year export career. It’s like a never-ending Broadway show, featuring political drama, questionable costumes, and the occasional plot twist that leaves the audience confused.
“Being an entrepreneur means wearing many hats. As soon as you leave the country, you must be familiar with customs tariffs, quotas, trade policies, but also the political and social issues of these countries.”
And speaking of hats, a hat tip to Nadine Brassard, president of Commerce International Québec. She insists that U.S. elections can swing the balance for SMEs in Quebec. So, it’s not just about winning a title; it’s about winning the export lottery! Spoiler alert: 73% of Quebec’s exports head south. It’s like you’re best friends with someone who only shares their candy with you, while the rest of the world looks on, drooling.
The Tariff Tango
Oh dear, an election year brings more tension than a family reunion at Thanksgiving, doesn’t it? Contracts go on hold like a child refusing to clean their room. But Marc, ever the optimist, says it’s only temporary. It’s like saying winter is just a ‘short vacation’—trust me, it feels a lot longer!
“We are talking about a rate of 10%. It seems like a lot, but if you have a good product, an innovative product, customers are ready to pay for it.”
Despite Marc’s chirpy take, some economists are sounding alarms like they’ve spotted a bear at a picnic. According to them, tariffs could dent Canada’s GDP by a staggering 1.7% by 2028. One can only imagine the economist’s voice breaking into a “worrying about the future” song in his head.
Looking Beyond the Border
It’s clear that nadine and Marc are both not afraid of the great unknown beyond the border. They’re dreaming of a world where Quebec SMEs spread their wings and fly off to new markets. But here’s a shocking statistic: 72% of exporting companies are like that one kid in school who only plays with their best friend. Yikes!
Marc champions a diversified export strategy. Think of it like Tinder for exports—find your perfect match without putting all your eggs in one basket. He’s playing chess while others are still trying to figure out checkers. Physical teams on site? Absolutely! You need to know the lay of the land, not just read about it.
But here’s where it gets interesting—Nadine’s organization is like the fairy godmother for SMEs without the resources to go global. A day devoted to exports is looming, but with the American elections in mind, it could turn into more of an ‘export therapy session’ for anxious businesses.
So, as the U.S. gears up for another wild election ride, Quebec SMEs must be ready with their strategies, their charm, and a good pair of running shoes—because you never know what will happen next!
Nearly 40% of InnovMetric’s robust revenue stream originates from the United States, highlighting the critical importance of the American market to the company’s overall performance. “It’s our fourth market in terms of licenses, but it ranks as our second in revenue,” elaborates Marc Soucy, the president of InnovMetric, underscoring the financial significance of this market.
In light of the upcoming American presidential election, like many entrepreneurs, Marc Soucy is contemplating how the electoral outcome could potentially reshape the economic environment for businesses.
“We may have to rethink our exporting strategies, including adjustments to our customs processing, but rest assured, our software offerings will remain unchanged,” asserts Mr. Soucy, who draws from his extensive experience of witnessing the fluctuations of American politics over his 30 years in international exports.
Despite his natural optimism and confidence, Marc Soucy is acutely aware of the developments transpiring in the United States. As time has passed, he has developed a genuine enthusiasm for international political dynamics.
“Being an entrepreneur means wearing many hats. As soon as you leave the country, you must be familiar with customs tariffs, quotas, trade policies, but also the political and social issues of these countries.
— Marc Soucy, president of InnovMetric
Echoing his sentiments, Nadine Brassard, president of Commerce International Québec, warns that the election process currently unfolding in the United States will undoubtedly impact small and medium-sized enterprises (SMEs). She emphasizes the necessity for these businesses to prepare for a variety of potential outcomes.
Regardless of the electoral outcome, Nadine insists that attention will remain fixed on the U.S. market, recalling that it accounts for a staggering 73% of exports by Quebec SMEs.
“This could mark a critical turning point for the exporting capabilities of these small businesses,” she warns, indicating the high stakes involved.
The threat of the tariff
The potential ramifications are already being felt across the board, with Mr. Soucy noting that election years consistently lead to a slowdown in business activity.
“There are always contracts that are put on hold or iced during this period. Some customers exercise greater caution. However, we remain unperturbed; business momentum will resume after the elections,” he states confidently.
He firmly does not anticipate the need for employee layoffs, indicating a level of stability within his operations.
The most significant impacts, however, may still lie ahead. The specter of protectionist measures looms, particularly concerning an increase in customs tariffs, which poses a threat to Canadian businesses.
“We are talking about a rate of 10%. It seems like a lot, but if you have a good product, an innovative product, customers are ready to pay for it.”
— Marc Soucy, president of InnovMetric
However, not all economists share this optimistic outlook. As several experts, including Jimmy Jean of Desjardins, voice concerns, they argue that such tariffs could prove “damaging to the economy.” He estimates that such measures could lead to a decline in Canada’s GDP by 1.7% by the end of 2028, compared to current scenarios.
Export elsewhere
This scenario raises significant alarms for Nadine Brassard, who fears the consequences stemming from Quebec SMEs’ heavy reliance on the U.S. market.
Supporting her perspective, a study conducted by Commerce International Québec reveals a staggering statistic: 72% of Quebec exporting companies channel their efforts solely to a single country.
Nonetheless, the president emphasizes that diversifying into new markets could substantially elevate SMEs’ export values, highlighting a pathway for growth.
Marc Soucy, whose own company, InnovMetric, enjoys a presence in 18 countries, concurs. “If there is a conflict or loss of revenue in a particular market, it does not impact all our exports,” he explains, advocating for a diversified approach to international business.
In his eyes, strategically positioning his business efforts at opportune moments has proven to be an adaptive strategy that evolves alongside market conditions. He emphasizes the critical nature of establishing an international presence and maintaining teams “physically on site” to gain a comprehensive understanding of the relevant political and economic landscapes.
Recognizing that many SMEs may lack the resources to deploy on-site teams, the president of Commerce International Québec stresses that her organization is poised to provide substantial support and resources to bolster their export initiatives and strategic approaches.
A dedicated day focused entirely on exports is set to occur in Lévis on November 14, with anticipation for approximately 125 business leaders in attendance. “While the American elections won’t be the central theme, they will undoubtedly dominate discussions, particularly following the election results,” she concludes, summarizing the event’s relevance amidst the political climate.
Substantial success in the U.S. market, argues in favor of a diversified export strategy. He compares it to the modern dating scene—don’t put all your eggs in one basket! Marc emphasizes the importance of understanding global markets and the need for businesses to tailor their approaches accordingly.
Nadine, echoing this call for expansion, positions her organization as a vital resource for SMEs, akin to a supportive ally on their journey to international markets. As they prepare for a forthcoming day dedicated to export education, she hopes it will equip businesses with the knowledge and tools necessary to navigate new opportunities and the current uncertainties of the American election landscape.
as the U.S. prepares for another politically charged election year, the stakes are high for Quebec SMEs. With the potential for changes in tariffs and customs regulations, companies must remain agile and proactive in their exporting strategies. While there is optimism from leaders like Marc Soucy, the risks posed by a dependency on the American market cannot be underestimated. Diversification and adaptability may well hold the keys to weathering the storm and emerging stronger in the international arena.