Canada and the U.S. share the largest trading relationship in the world and the ski and snowboard industry is no exception. The U.S. has consistently been one of the top ten countries that Canada imports ski and snowboard equipment from, however, recent years have seen a decrease in imports from the U.S. with an increase coming from China and Ukraine. Canadian participation in skiing and snowboarding has been gradually increasing over the last five years and this trend is expected to continue for the next five years. The surging loonie1 is putting more disposable income in the pockets of Canadians, with retail sales increasing 23.8% from 2005 to 2006 in the Snow Ski/Snowboarding Equipment market. As a result, Canada is a potentially profitable market for U.S. manufacturers of ski and snowboard equipment and related accessories. There is also a potential for U.S. manufacturers of various new technologies in ski equipment and snow making machinery.
Canadians love winter sports and the varying terrain of the country offers thousands of kilometers of ski trails and slopes for ski and snowboard enthusiasts. According to the Print Measurement Bureau, in 2006 4.4 million Canadians twelve or older participated in one or more forms of skiing, either alpine or cross-country, snowboarding, or a combination of these sports. The participation rate of Canadians in these sports has been gradually increasing since 2002, reaching fifteen and a half percent of the total population during the 2006- 2007-ski season. With over five months of winter, and an increased drive for personal health, outdoor sports are an increasingly popular way for Canadians to become active throughout the winter months.
The increased participation in these sports is bringing an increased demand for ski and snowboard equipment. Trendex Sports Vision report on the Canadian sporting goods industry states that there was an increase of twelve percent of retail units sold in this segment, which represents and increase in sales of almost twenty-four percent from 2005 to 2006. This growing interest is also being met by a strong Canadian economy and the increasing purchasing power of the Canadian consumer.
Increased interest in these disciplines might be accounted for by the proactive approach being taken by the Canadian ski industry and the government to increase awareness in the sport and promote an active lifestyle to the Canadian people. The Canadian Ski Council (CSC) is celebrating the tenth anniversary of the "Grade Five Pass Program" and this year boasts over 32,000 members. The objective of this program is to get the Canadian youth active in a sport that they might not otherwise participate in, by offering grade five students free ski passes. The CSC played a key role in acquiring the designation of a “National Ski and Snowboard Week” and heads up the “Making Winter Winners” (MWW) program to raise money to help fund athletes on their way to the podium at the 2010 Winter Games in Vancouver, British Columbia. The industry has also come together to offer “Discover Skiing and Snowboard Discount Packages” that offer discounts on lift passes, lessons and equipment rentals to beginners of all ages. The Canadian Federal Government is committed to helping Canadians become more active by offering a child fitness tax credit to families that register their children in an eligible physical activity program.
Canadians are the main drivers of market demand, however Canada offers great skiing and with an elongated winter, there is a draw for foreign visitors. Canadians represent about 79% of all participants on the hills and trails, U.S. participants represent nine percent and other countries represent twelve percent. The strong brand recognition of U.S. products is highly desirable and offers the possibility of increased sales to visitors in Canada who might not otherwise have access to these products.
The Canadian consumer is a real source of strength right now as a result of very strong employment performance in the last five years. Specifically, it is expected that as a result of a very hot western economy, there will be very strong Western Canadian domestic demand for skiing. Alternatively, relatively slower consumer spending growth in Eastern Canada will result in a weaker demand for skiing.
The future of skiing in Canada will see some very large changes. Demographically, Canada is changing. Canada’s population is aging. As Canadians get older, their rate of participation in sports decreases. In the short term, this may bring about several years of increased participation in cross-country skiing. In the long term, with the lower birth rate of Canadian families, Canada will become dependant on immigration. In a recent speech by Ipsos Reid at the Canadian Snow Industry Symposium and Trade Show, it was estimated that by the year 2017, approximately one out of every five people in Canada would be a member of a visible minority group. In British Columbia, this ratio will be one in three. Research conducted by the Canadian Ski Council shows that visible minorities do not participate actively in skiing and snowboard activities, although snowboard is being increasingly embraced by the youth of all ethnicities.
Weather conditions and the length of the season drive the Canadian ski market. Global warming is a critical concern and the ability of the industry to navigate through and adapt to weather issues is paramount. Environment Canada’s forecasting models show that the average temperatures are rising (more in the north and west rather than the south and interior) but that things look relatively good for Quebec and Ontario. Their prediction is that overall there will be significant reductions in winter snow cover. As a result, it is clear that snowmaking technology in Canada will be the future.
By Tracey Ford