Israel & Canada Economic Ties: An Unheralded Success Story

CanadaIsrael-100x100One of the greatest but not sufficiently heralded economic partnerships Israel enjoys is that with Canada.

Indeed, Israel’s overall relationship with Canada is marked by strong political, diplomatic and commercial ties.

Just two decades ago, bi-lateral trade between Israel and Canada was around $450 million.  But a significant surge in trade came in the wake of 1996 Free Trade Agreement between the two countries. Bilateral trade has since multiplied by almost four times, surpassing $1.6 billion annually.

Among Canada’s top exports to Israel are aircraft, machinery, paper products, precious stones and metals and vegetable products. Canada’s main imports from Israel include pharmaceuticals, electrical equipment, precious stones and metals, and scientific and precision instruments. Just this August, Quebec company Bombardier won a tender to supply 62 electric locomotives to Israel Railways with an option for 32 more in a deal worth billions.

Recently, the 1996 Free Trade Agreement between the countries was re-opened for discussion to bolster possibilities for bilateral trade.

Once ratified, the improved Free Trade Agreement will allow the Canadian market to start importing such Israeli products as cereal, fresh fruit, wines, and more, with a considerably lowered import tax. Israel will receive lowered import taxes or tax exemptions on Canadian items like cereal products, fresh and processed fruit, vegetables, wines baked goods, berries, selected fish products, and spices.

Former Canadian Prime Minister Stephen Harper praised the benefits of this updated deal for both sides: “Israel is a priority market for Canada and holds great potential for Canadian companies in a variety of sectors. An expanded and modernized free trade agreement will lead to a strengthened bilateral relationship as well as an increase in jobs and opportunities for Canadians and Israelis alike.” We look forward to the continued development of this bilateral relationship with Canada’s newly elected government, led by Prime Minister Justin Trudeau.

One of the other key focal points for the strong commercial partnership between our two countries is technology and innovation.  This is based on a mutual spirit of creativity and entrepreneurship, as well as over twenty years of close collaboration in jointly funded basic and industrial research.

One vital element in this collaborative effort is the Canada–Israel Industrial R&D Foundation (CIIRDF). Established in 1994 and co-funded by Jerusalem and Ottawa, CIIRDF invests in joint research and development between private sector companies in Canada and Israel, with a focus on the commercialization of new technologies. CIIRDF has financed more than 90 technology partnerships which have generated hundreds of millions of dollars in economic value for Canadian and Israeli companies and is recognized as one of the most successful partnership models of its kind in the world.

This bilateral collaboration is taking place both on a provincial and company to company level, including:

  • A $3 million mutual grant by Israel and Ontario towards programs in the medical device, clean tech, information and communication technology and life sciences sectors, as part of the Ontario-Israel Collaboration Program that began in 2005.
  • A new program between Israel’s Chief Scientist, CIIRDF and the Province of Nova Scotia, which will facilitate R&D partnerships between Israeli and local firms in the province. The goal: building strong innovation and economic bridges between Nova Scotia and our Startup Nation.
  • In Saskatchewan, Israel will partner with a major technological initiative aimed at addressing global food security; this has the potential to strategically link both sides in this area of major global importance.
  • On a company level, collaboration between EllisDon (Mississauga, Ontario) and RAFAEL Advanced Defense Systems Ltd. (Haifa, Israel) in smart grid technology aims at developing a novel and sustainable approach to energy management. This initiative is also expected to lead to additional joint partnerships for global leadership in this multi-billion dollar sector.
  • Blackberry joined other global technology companies with R&D centers in Israel following their acquisition of security start-up WatchDox for $100 million dollars. This is Blackberry’s second acquisition in Israel and will create significant opportunities to accelerate innovation for high-end secure communications solutions.
  • Another B2B partnership with enormous potential is the collaboration between Canada’s Magna International Inc. and Israeli startup Argus Cyber Security Ltd. They are partnering to deliver a robust solution to the automotive industry that addresses vehicle security concerns related to cyber-attacks on “connected cars.”

These are just a few examples of the ways governments and cutting-edge companies from both economies are helping create new technologies to improve the world.

As innovation becomes more and more crucial to our modern economies, mutually beneficial ties between both of our global technology hubs will reach even greater heights. We at the Foreign Trade Administration of the Israeli Ministry of Economy in conjunction with our office in Canada, currently headed by Mr. Michael Khoury, are working tirelessly along with our Canadian and Provincial counterparts to make that vision a reality.

2015-12-11T11:05:55+00:00December 11th, 2015|Uncategorized|0 Comments