How Do I Get Paid (Methods of Payment)
Although terms vary from one industry to another and among trading channels, U.S. manufacturers exporting to Canada generally ship on open account, and do not require letters of credit. Typical terms are a discount of 1 to 2 percent of the invoice if paid within ten days. U.S. firms exporting to department stores tend to offer a discount of 8 to 10 percent for settlement within ten days. Normal precautions in dealing with a first-time customer should be exercised, and safeguards instituted wherever possible, at least until a satisfactory relationship has been established.
U.S. firms exporting to Canada will not find any strong need for government-backed export insurance against exigencies that may typically be found in many third-country markets. The Export-Import Bank of the United States is moderately active in financing U.S. exports to Canada. With proper application of sound business principles, U.S. firms should be able to rely on commercial banks as they do in the U.S. domestic market and to avoid most of the problems that require extensive export financing insurance.
How Does the Banking System Operate?
According to the Canadian Bankers’ Association:
Banks play a key role in Canada’s financial system and economic development. As of 2008 , there were 20 domestic banks, 24 foreign bank subsidiaries and 22 full service foreign bank branches and 7 foreign bank lending branches operating in Canada. In total, these institutions manage over CDN$2.7 trillion in assets
- Banks account for over 70 percent of the total assets of the Canadian financial services sector, with the six largest domestic banks accounting for over 90 percent of the assets of the banking industry.
- Canada's banks and their subsidiaries contribute significantly to employment and job creation. In 2007, banks employed close to 257,000 Canadians. Industry employment has increased by 16.1 per cent over the last 10 years. Both the quality and the number of jobs are consistently high in the banking industry. Full-time jobs increased by almost 28 per cent from 1997 to 2007. Banks and their subsidiaries paid CDN$20.6 billion in salaries and benefits in Canada in 2007, an increase of over CDN$4.5 billion from 2002 to 2007.
- Canada's banks operate through an extensive network that includes over 8,000 branches and 16,424 automated banking machines (ABMs) across the country. Canada has the highest number of ABMs per capita in the world and benefits from the highest penetration levels of electronic channels such as debit cards, Internet banking and telephone banking.
- The six major domestic banks also have a significant presence outside Canada, in areas such as the United States, Latin America, the Caribbean and Asia.
Under NAFTA, U.S. banks also enjoy a right of establishment and a guarantee of national treatment in Canada.
The Canadian dollar is fully convertible. Canada has no restrictions on the movement of funds into or out of the country. Banks, corporations and individuals are able to deal in foreign funds or arrange payments in any currency they choose.
U.S. Banks and Local Correspondent Banks
All major banks in Canada have the ability to do business with U.S. banks and in U.S. dollars. U.S. banks doing business in Canada are members of the Canadian Bankers Association, to which all major Canadian banks also belong.
U.S., Canadian and third-country banks finance large-scale projects. Canada does not qualify for project financing from any of the multilateral development banks, such as the World Bank or the Inter-American Bank for Reconstruction and Development. Overseas Private Investment Corporation (OPIC) and other U.S. Government investment and project financing programs are not available in Canada.