Brexit an Opportunity for Canada – Part Two
Author: Blake C. Goldring
June 13, 2018
Preparing for Brexit Not Just a British Challenge
As a Canadian business leader, I recently had the opportunity to participate in a “Preparing for Brexit Not Just a British Challenge” panel with the Right Honourable Lord Mayor of the City of London and the Honourable Michael H. Wilson, Chairman of Barclays Canada.
The conversations covered the UK financial services industry and a new trade agreement.
Given my background, the discussion that I found most interesting was about the opportunity for Canada to position itself for success in this new global reality.
When it comes to Brexit and our relationship with the UK, I believe we are starting from a position of strength. We have an advantage given a long-standing political and economic relationship that benefits both countries.
While London will almost certainly remain one of the world’s most important financial centres, the Brexit vote may open the door to foreign firms to list on exchanges in Canada.
For example, in a scenario that sees the UK move to a third country status with the EU without any regulatory equivalence, severe restrictions could be placed on the EU-related business that can be transacted by UK-based firms.
In this environment global banks could potentially relocate some of their operations out of the UK – and this may provide an opportunity for Canada.
Our major selling point to global financial services companies is stability. The Brexit vote and political unrest in the U.S. make Canada stand out as a safe, stable place to invest.
Combined with a competitive business environment, privileged access to the U.S., a stable financial system and a network of free trade agreements Canada stands out as an ideal location for global headquarters.
Should companies decide to move operations to Canada they will find that existing barriers to trade and market access between Canada and the EU in the financial services sector are not high to begin with, due to the parties’ commitments under GATS, whose provisions are similar to those found in CETA.
As a result, increased trade and investment in financial services between Canada and the EU is more likely to occur over the longer run as a result of greater domestic market integration.
I expect this could be accelerated if Brexit negotiations are protracted and UK-based financial services firms seek to locate in other jurisdictions.