APPENDIX B BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO CANADA (US$ millions, unless otherwise noted) A) Rank of Sector: 1 B) Name of Sector: COMPUTER HARDWARE AND PERIPHERALS C) ITA or PS&D Code: CPT 1993 1994 1995 D) Total Market Size 4,722 4,492 4,561 E) Total Local Production 3,305 3,109 3,120 F) Total Exports 2,965 2,828 2,876 G) Total Imports 4,382 4,211 4,317 H) Imports from the U.S. 2,809 2,744 2,864 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Demand for computer products and technologies is expected to increase approximately two to four percent annually during the 1995 to 1997 period. However, due to price reductions resulting from the highly competitive nature of this industry, revenues are not expected to increase during this period. Rather, they will likely remain stable, or even decrease somewhat. Demand for powerful portable computers based on Intel-compatible technologies will continue to remain strong, while demand for mainframes and mid-range computers will continue to decline. As Canadian companies gradually recover from the impact of the recent recession, capital expenditures should increase, and more companies will likely adopt advanced processing machinery requiring computer technologies. As an increasing number of companies embrace advanced manufacturing technologies (such as computer-aided design/engineering/manufacturing), and networking capabilities to improve productivity, demand for computer products will increase. Since Canada is not recognized as a significant player in the manufacture of computer hardware and peripherals, the majority of market demand is satisfied by imports. Although the United States remains the dominant supplier of such products for the Canadian market, competition from third countries with low production costs (such as Southeast Asian countries) is expected to increase. Nonetheless, since Canada represents a sophisticated market of consumers demanding superior quality technologically advanced products, U.S. companies will likely remain the dominant import suppliers. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8473.30 Parts and accessories for ADP machines and units 2,048 H.S. 8471.91 Digital process units whether or not presented with the rest of a system 1,567 A) Rank of Sector: 2 B) Name of Sector: COMPUTER SOFTWARE C) ITA or PS&D Code: CSF 1993 1994 1995 D) Total Market Size 1,299 1,355 1,491 E) Total Local Production 1,195 1,226 1,327 F) Total Exports 453 458 488 G) Total Imports 557 587 652 H) Imports from the U.S. 500 536 604 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Although the impact of the recession still affects some Canadian companies, many are beginning to recover. With this recovery, companies are expected to increase their capital outlay for advanced computer technologies, and therefore, demand for computer software is forecast to increase in the coming years. Also supporting this growth in demand for computer software in Canada will be the increased proliferation of computer technologies in non- business markets, such as the home consumer market, the educational market, the entertainment and in-house publishing industries, and the reference/information markets. Increasing demand for multimedia capability and applications will also substantially increase the demand for highly sophisticated software packages. Although U.S. companies continue to be the dominant suppliers of computer software in the Canadian market, Canada's software industry has a strong nucleus of companies that have achieved international recognition as technical and market leaders for their products. Most of these products are niche-oriented, with well-known applications in computer graphics and animations, advanced programming tools and languages, Geographic Information Systems, forms-processing software, and educational/computer-based training products. Also note-worthy are Canadian achievements in specialty software areas like remote sensing, telecommunications network management, expert systems for mineral processing, real-time systems design, process and industrial control, geophysical engineering and power systems analysis. The strongest third-country competition U.S. firms face in Canada is from European software products, particularly those from the United Kingdom and France. To maintain their dominant position, U.S. companies must supply quality products in multiple formats (compatible with a variety of hardware products) with multimedia applications. As consumers continue to purchase a greater variety of software packages, their procurement decisions will be based on the available types of software/variety of applications, rather than on the types of hardware they own (the traditional purchase factor only a few years ago). K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8524.90 CD-ROM software 38.3 H.S. 8524.90 Computer-based training software 51.4 H.S. 8524.90 Graphics software 66.3 A) Rank of Sector: 3 B) Name of Sector: AUTOMOTIVE AFTERMARKET PARTS C) ITA or PS&D Code: APS 1993 1994 1995 D) Total Market Size 3,378 3,405 3,662 E) Total Local Production 1,576 1,589 1,708 F) Total Exports 1,150 1,159 1,246 G) Total Imports 2,952 2,975 3,200 H) Imports from the U.S. 2,130 2,147 2,309 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: [Note: Although some automotive aftermarket parts (AAP) can also be installed in new vehicles, in which case they would be considered OEM and not "aftermarket" parts, for the purpose of this research, these products have not been included in the calculation of the market size for automotive parts and service (and they have therefore not been double counted).] The demand for AAP is principally affected by the types of vehicles on the road, the state of the Canadian economy, and government regulation. Canadian subsidiaries of U.S.-based companies account for 90 percent of domestic production. The remaining manufacturers in Canada are mainly specialized, smaller Canadian-owned companies. The United States has historically been the dominant supplier of AAP imports into Canada. However, in recent years the U.S. share of total imports declined due to the growing number of Japanese "transplant" cars making in-roads in the Canadian market, and due to North American manufacturers' increased sourcing of components from Japan as part of their "globalization" strategy for their product lines. Nonetheless, U.S. suppliers of high-quality AAP will still find excellent opportunities in the Canadian market. U.S. suppliers wishing to penetrate the Canadian market should pay particular attention to U.S. subsidiaries' dealer networks and market to them through their U.S. headquarters, stressing quality, service, just-in-time delivery capability, and concentrating on product areas where new demand is created through technological change. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8708.29 Parts and accessories of bodies 982 H.S. 8708.39 Anti-lock brake systems 446 H.S. 8708.40 Transmission for motor vehicles 217 H.S. 8708.99 Motor vehicle parts (electronics, fuel injection, emission control, 252 radiators, air bags, alternate fuel conversions, safety products, water based paints, climate control, ride control, struts) A) Rank of Sector: 4 B) Name of Sector: TELECOMMUNICATIONS EQUIPMENT C) ITA or PS&D Code: TEL 1993 1994 1995 D) Total Market Size 3,913 3,863 4,097 E) Total Local Production 3,332 3,249 3,358 F) Total Exports 1,395 1,393 1,456 G) Total Imports 1,976 2,007 2,195 H) Imports from the U.S. 1,205 1,224 1,385 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The Canadian telecommunications equipment market, valued at US$3.9 billion in 1993, is very sophisticated and dynamic. Although the Canadian telecommunications industry is well-served by three leading Canadian manufacturers (Northern Telecom Canada Limited, Mitel Corporation, and Newbridge Networks Corporation), the market is nevertheless receptive to imports. Imports of telecommunications equipment were valued at nearly US$2 billion in 1993, of which U.S. companies supplied approximately two-thirds. Competition from Japanese imports represents the strongest challenge for U.S. suppliers to Canada. However, the share of the market satisfied by Japanese imports is substantially less than that satisfied by U.S. imports. While the recession has had a significant negative impact on many segments of the market (most notably the telex and keyphone systems segments), many are experiencing significant growth. In fact, the voice processing equipment market and data communications segment are expected to show growth levels of more than ten percent during 1994. Progressive deregulation of the Canadian telecommunications industry will continue to provide opportunities for U.S. companies engaged in joint ventures with Canadian manufacturers. Emerging applications for asynchronous terminal mode (ATM) technology and integrated services digital network (ISDN) technology are expected to result in significant opportunities for U.S. export sales to Canada. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8525.10 Voice processing equipment and systems 160 H.S. 8525.2050 Data communication systems 500 H.S. 8527.90 Cellular phones 150 A) Rank of Sector: 5 B) Name of Sector: MEDICAL EQUIPMENT C) ITA or PS&D Code: MED 1993 1994 1995 D) Total Market Size 1,265 1,198 1,225 E) Total Local Production 505 482 492 F) Total Exports 250 240 247 G) Total Imports 1,010 956 980 H) Imports from the U.S. 784 745 755 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Although subsidiaries of multinational enterprises represent only ten percent of medical equipment companies operating in Canada, in terms of sales volume they dominate the Canadian marketplace. Canada has historically been one of the world's strongest markets for medical equipment. An aging population, generous research and development tax credit policies, as well as a world-class network of hospitals and universities and a comprehensive public health care system have all contributed to Canada's reputation as a leader in the medical sciences. U.S. medical equipment is very prominent in the Canadian market, a testimony to the industry's high quality reputation, extensive distribution networks, and reliable after-sales service. Pressures to contain health care costs, demographic changes, and increased health consciousness will continue to be the most notable trends in the Canadian health care industry during the coming years. Third- country competition faced by U.S. companies selling to the Canadian market comes mainly from Asian countries with low production costs (for general use products in high demand), and from some European countries, like Germany and the United Kingdom, for more technical and specialized products. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 9018.11 Electrocardiographs 5.2 H.S. 9018.19 Electro-diagnostic apparatus 16.9 A) Rank of Sector: 6 B) Name of Sector: POLLUTION CONTROL EQUIPMENT C) ITA or PS&D Code: POL 1993 1994 1995 D) Total Market Size 4,109 3,968 4,085 E) Total Local Production 3,338 3,234 3,339 F) Total Exports 733 723 760 G) Total Imports 1,504 1,457 1,506 H) Imports from the U.S. 1,213 1,179 1,223 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Steady revenue growth is projected in the three primary subsectors of the pollution control equipment market during the next three years. Growth for the air, water and soil pollution control equipment subsectors has averaged 2.5 percent annually. Public concern and strong federal and provincial environmental legislation, enforced with severe fines and penalties, has created a growing demand for pollution control equipment. Canadian firms are allocating substantial funds to purchase pollution control/remediation equipment in order to modernize operations and increase efficiency, while complying with legislative requirements. Demand will also be affected by the determination of many corporations to capitalize on the employment of environmental practices to enhance public image. The principal Canadian end-users are the pulp and paper, chemical, metallurgy, and textile industries -- all of which will be adding pollution control equipment during the next three years. U.S. firms have competitive advantages over third-country suppliers in the Canadian market since their equipment is designed to meet U.S. EPA requirements, which in most cases are similar to Canadian requirements, and since U.S. suppliers are located close to the Canadian market. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8421.29 Filtering or purifying machinery and apparatus for liquids 197 H.S. 8421.39 Filtering or purifying machinery and apparatus for gases and scrubbers 502 H.S. 9030.10 Hazardous waste equipment 426 A) Rank of Sector: 7 B) Name of Sector: BUILDING PRODUCTS C) ITA or PS&D Code: BLD 1993 1994 1995 D) Total Market Size 5,975 5,741 5,888 E) Total Local Production 10,123 9,730 9,974 F) Total Exports 7,179 6,902 7,072 G) Total Imports 3,031 2,913 2,986 H) Imports from the U.S. 1,910 1,835 1,881 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Canadian demand for building products is influenced largely by the level of building construction in the residential, industrial, commercial, and institutional sectors. Activity in the building construction industry languished during the recent recession, as both the residential and non-residential sectors suffered declines in real output. Total expenditures on new building construction in Canada (including major renovations) were expected to increase by 3.2 percent in 1993, the first annual increase for this sector since 1989. The anticipated growth in 1993 was principally attributable to a 3.9 percent increase in residential construction, and a 6.2 percent increase in institutional construction. These increases were partly offset by a decline in industrial construction of 13.5 percent. Canadian demographics indicate that increased expenditures on housing during the 1995 to 1997 period will be directed more toward renovations than to new home construction, and it is this renovations segment of the market that represents the greatest potential for a variety of new building products in Canada. Representing opportunities in the Canadian building products market are home renovation products, materials which support energy conservation, and environmentally-friendly products containing reduced volatile organic compounds and solvents. While some general-use high volume building products are supplied by Asian countries, the vast majority of all building products imported into Canada are supplied by U.S. companies (except for some upscale specialized imports from Europe). Given the dominance of Canadian suppliers in the domestic market coupled with the high cost of transportation of building products, third-country competition does not represent a significant threat to U.S. market share in Canada. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 3214.10 Caulking compounds, non-toxic, designer colors 167 H.S. 3920.41 PVC planking N/A H.S. 3925.20 Vinyl windows 879 H.S. 4409.20 Hardwood flooring N/A H.S. 7019.90 Fiberglass/composite roofing shingles, stylized 183 A) Rank of Sector: 8 B) Name of Sector: AUTOMOTIVE PARTS AND SERVICE EQUIPMENT C) ITA or PS&D Code: APS 1993 1994 1995 D) Total Market Size 22,252 22,649 24,357 E) Total Local Production 10,932 10,943 11,768 F) Total Exports 8,528 8,598 9,246 G) Total Imports 19,848 20,304 21,835 H) Imports from the U.S. 16,936 17,075 18,363 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: [Note: As mentioned in Best Prospect #3 (automotive aftermarket parts), this automotive parts and service equipment market contains only OEM products not included in the aftermarket market. Products have therefore not been double counted in the determination of the size of these two markets.] The Canadian automotive parts and service equipment market can expect above average growth as a result of new vehicle sales in 1994. Industry experts predict the new vehicle market in Canada (total car and truck sales) for 1994-model year at 1.3 million units. Car sales are expected to surpass 800,000 units, an increase of eight percent from the 1993-model year, and truck sales are expected to continue to grow to a projected level approaching 500,000 units, an increase of more than 13 percent. Industry experts forecast average annual Canadian demand growth for automotive parts and service equipment at between seven and nine percent during the next three years (1995 to 1997). U.S. suppliers wishing to penetrate the Canadian market should focus on dealer networks and, in the case of local firms which are subsidiaries of U.S. companies, approach these through company head offices in the United States. In 1993, the Canadian automotive parts industry represented 12 percent of total North American automotive manufacturing. More than 90 percent of these sales were to Chrysler, Ford and General Motors with the remainder shared between Asian and European assemblers. During the 1993-model year, Japanese car sales dropped by 17 percent, compared with just one percent for the North American based firms. At the same time, North American manufacturers have largely closed the gap in terms of quality and cost competitiveness. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8407.34 Engines, spark ignition 2,621 H.S. 8409.91 Parts for spark ignition type engines 812 H.S. 8708.29 Parts and accessories of bodies for motor vehicles 3,750 H.S. 8708.39 Brake systems parts for motor vehicles 1,705 H.S. 8708.40 Transmissions for motor vehicles 1,847 H.S. 8708.50 Drive axles with differential for motor vehicles 652 H.S. 8708.70 Wheels including parts and accessories for motor vehicles 411 A) Rank of Sector: 9 B) Name of Sector: PLASTIC MATERIALS AND RESINS C) ITA or PS&D Code: PMR 1993 1994 1995 D) Total Market Size 2,380 2,411 2,523 E) Total Local Production 1,940 2,029 2,176 F) Total Exports 1,050 1,478 1,749 G) Total Imports 1,490 1,860 2,096 H) Imports from the U.S. 1,338 1,678 1,878 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The Canadian plastic materials and resins market is receptive to U.S.-manufactured products, which represent close to 90 percent of total imports in this market. European countries such as Germany and the United Kingdom supply a very small percentage of the market, and represent the strongest third- country competition faced by U.S. firms in the Canadian market. Imports from the United States have dominated such high-volume markets as automotive components, and lower value-added products. The growth in Canadian imports has resulted from an industry rationalization (United States/Canada). Most of Canada's industry is controlled by U.S. multinationals, and these companies are making decisions of supply and demand based on a single market. These companies operating in Canada supply a large part of domestic demand. The Canadian synthetic resins industry consists of an estimated 90 establishments producing primarily commodity- grade thermoplastic and medium-volume thermosetting resins and compounds. The packaging industry is the largest end-user of plastic materials and resins, followed by the construction and transportation industries. End-users and distributors of synthetic resins in Canada base their resin purchasing decisions on price, quality, product consistency, and timely delivery. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 3901 Polymers of ethylene, in primary forms 200 H.S. 3907 Polyacetals, polyethers, epoxide resins, polycarbonates, in primary forms 391 A) Rank of Sector: 10 B) Name of Sector:SPORTING GOODS AND RECREATIONAL EQUIPMENT C) ITA or PS&D Code: SPT 1993 1994 1995 D) Total Market Size 971 951 988 E) Total Local Production 580 567 586 F) Total Exports 249 247 260 G) Total Imports 640 631 662 H) Imports from the U.S. 215 210 218 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The economic recovery, with its accompanying increase in personal disposal income, should stimulate strong growth in demand for sporting goods in Canada. Strong competition is to be expected from Asian suppliers who possess cost advantages. U.S. suppliers can leverage their competitive advantages of geographical proximity, product quality, brand recognition and the CFTA's elimination of tariffs on U.S.-made sporting goods by 1998. Higher safety standards of U.S. goods make them more attractive vis-a-vis their Asian counterparts. Domestic Canadian production in this industry is not as significant as are imports, since Canada faces high production costs compared with many other countries -- who can produce at a lower cost (as is the case in Asian countries), or who have achieved significant economies of scale (as is the case with the United States for many sporting goods products). Future growth in this industry is expected to be driven by the outdoor and fad/novelty markets, for products like roller blades and sports team apparel. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 9506.91 General physical exercise, gymnasium athletics articles and equipment 181 H.S. 9506.70 Ice skates and roller skates, including skating boots with skates attached 8 H.S. 8712.00 Bicycles and other cycles, not motorized 158 H.S. 9506.31 Golf clubs 34 H.S. 9506.32 Golf balls 39 H.S. 9506.39 Golf equipment 63 A) Rank of Sector: 11 B) Name of Sector: ELECTRONIC COMPONENTS C) ITA or PS&D Code: ELC 1993 1994 1995 D) Total Market Size 4,083 4,111 4,550 E) Total Local Production 703 716 847 F) Total Exports 1,603 1,723 1,991 G) Total Imports 4,983 5,118 5,694 H) Imports from the U.S. 2,685 2,794 3,250 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The total market value of the Canadian electronic components industry is difficult to estimate, given its marked fluctuations and the breadth of the market. With the recession over, and strong growth projected in the telecommunications and information technology sectors (approximately ten to 12 percent annually), the electronic components industry should see similar strong growth. Although they supply a significant portion of market demand, U.S. imports face strong competition in the Canadian market. The Japanese have been able to refine manufacturing processes and produce large quantities of electronic components, and other Asian countries benefit from low production costs. A considerable portion of the imports from the United States are brought to Canada for additional processing and then re-exported. A strong domestic market exists with some major Canadian players competing in the international market. Innovative or cost-effective technologies employed by U.S. companies to introduce new components or improve existing ones, should nevertheless allow them to compete effectively in this marketplace in areas such as satellite parts and components, semi-conductors and electronic transformers. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8542.11 Monolithic integrated circuits, digital 2,424 H.S. 9013.80 Liquid crystal devices for instruments 89 H.S. 8534.00 Printed circuits 836 A) Rank of Sector: 12 B) Name of Sector: HOUSEHOLD CONSUMER GOODS C) ITA or PS&D Code: HCG 1993 1994 1995 D) Total Market Size 2,772 2,664 2,730 E) Total Local Production 2,217 2,131 2,184 F) Total Exports 1,136 1,108 1,152 G) Total Imports 1,691 1,641 1,698 H) Imports from the U.S. 965 955 1,008 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The negative impact of the recession on the demand for household consumer goods is expected to turn as the Canadian economy improves, which is evidenced by the fact that personal disposable income rose 1.4 percent last year. Canadian consumer confidence and spending will grow, thereby increasing demand for U.S. household consumer goods during the 1995 to 1997 period. The latest statistics indicate Canadian retail sales rose by a real rate of 7.7 percent in 1993. Other contributing factors include growth in Canadian housing starts during the next few years, increased average household income, and continued reduction of tariffs on U.S. products under the CFTA. Canadian consumers are generally receptive to U.S. consumer products, and favor innovative and functional U.S. products that are recognized for their competitive pricing, availability, quality, reliability and after-sales service. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8433.1 Mowers, powered, lawn, with horizontal cutting device 235 H.S. 8508.80 Tools, hand-held, with self-contained electric motor, hand-held 160 H.S. 8509.80 Electromechanical domestic appliances with self- contained electric motor 343 A) Rank of Sector: 13 B) Name of Sector: APPAREL C) ITA or PS&D Code: APP 1993 1994 1995 D) Total Market Size 6,897 6,564 6,662 E) Total Local Production 5,518 5,120 5,063 F) Total Exports 690 545 440 G) Total Imports 2,069 1,989 2,039 H) Imports from the U.S. 244 239 250 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: During the last three years, the recession has contributed to the slow growth rate of the Canadian apparel industry. Recent positive Canadian economic indicators, such as a 1.4 percent rise in personal disposable income, and a 7.7 percent rise in retail sales are expected to lead to increased Canadian consumer spending on apparel. Canadian consumers will remain price-sensitive, seeking quality items at fair prices. The key to success in the Canadian apparel market during the forecast period of 1995 to 1997 is to adapt to this trend. The Canadian apparel industry has a reputation for producing a diversified range of fashionable high-quality garments, mostly for the medium to high- price retail market, and is concentrated in the provinces of Quebec, Ontario, and British Columbia. Although there is tremendous competition from third-country suppliers, U.S. suppliers of low- priced quality goods have excellent opportunities to penetrate the Canadian apparel market. The elimination of tariffs by 1998 on U.S.-origin goods, lower production costs, and market proximity provide significant competitive advantages for U.S. suppliers. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 6108.31 Women's/girl's fleecewear, sleepwear, and foundations 373 H.S. 6109.10 T-Shirts, singlets and other vests, of cotton 443 H.S. 6110.20 Pullovers, cardigans of cotton H.S. 6110.30 Pullovers, cardigans and similar articles of man-made fibers, knitted 448 H.S. 6203.42 Mens/boys trousers and sports of cotton 366 H.S. 6205.20 Mens/boys shirts of cotton 343 H.S. 6201.11 Men's/boy's outerwear 295 A) Rank of Sector: 14 B) Name of Sector: MATERIALS HANDLING MACHINERY C) ITA or PS&D Code: MHM 1993 1994 1995 D) Total Market Size 2,116 2,014 2,044 E) Total Local Production 1,672 1,591 1,615 F) Total Exports 381 363 368 G) Total Imports 825 786 797 H) Imports from the U.S. 590 567 579 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Globalization of the marketplace, and the desire for international competitiveness and economic recovery will encourage Canadian manufacturers to increase their capital expenditures, including expenditures on materials handling machinery. The market will demand greater automation, efficiency, and sophistication in the handling of products. Demand for advanced technologies will increase in the materials handling equipment industry, as manufacturers seek operational efficiency through automated data and system controls. Since products in this industry are generally quite sophisticated, domestic production is substantial, as are imports from countries producing quality technologically advanced products (such as the United States, which supplies the majority of imports, as well some European countries). An increasing north-south market orientation spurred by the CFTA, and the NAFTA, is creating greater economies of scale and rationalization of plant locations through concentrated cross-border markets. This may result in fewer manufacturing and warehouse facilities, but increase the volume of output. Also as a result of the CFTA, most import tariffs in this industry were eliminated January 1, 1993. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8427.10 Self-propelled works trucks powered by an electric motor 144 H.S. 8431.20 Parts of fork-lift and other work trucks fitted with lifting equipment 111 A) Rank of Sector: 15 B) Name of Sector: FURNITURE C) ITA or PS&D Code: FUR 1993 1994 1995 D) Total Market Size 2,272 2,161 2,194 E) Total Local Production 1,545 1,464 1,481 F) Total Exports 204 200 209 G) Total Imports 931 897 922 H) Imports from the U.S. 633 641 690 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The Canadian furniture market, deeply affected by the recession and slow recovery in recent years, was forecast to experience renewed growth after mid-1994. Between 1995 and 1997, the household furniture industry is projected to grow at a real rate of one to two percent annually. Opportunities exist for U.S. exporters of household wooden furniture, metal ready-to-assemble products, and especially compact casegood furniture (both are characterized by high quality craftsmanship or low retail cost) as the domestic Canadian market continues to rely less and less on domestic production. The key to success for U.S. companies in the Canadian consumer market is competitive pricing for quality items. Third-country competition predominates for low-quality inexpensive items. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 9403.20 Furniture, metal 358 H.S. 9403.40 Kitchen furniture, wooden 61 H.S. 9403.60 Furniture, wooden 448 A) Rank of Sector: 16 B) Name of Sector: TEXTILE FABRICS C) ITA or PS&D Code: TXF 1993 1994 1995 D) Total Market Size 5,532 5,264 5,337 E) Total Local Production 3,706 3,474 3,475 F) Total Exports 431 421 443 G) Total Imports 2,257 2,211 2,305 H) Imports from the U.S. 1,321 1,301 1,358 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The growth in market demand for textiles in Canada has been modest during the past three years due to the recession. This trend is expected to continue during the next three years, as the Canadian economy slowly recovers from the recession. Canadian imports of textiles are expected to increase by two to four percent annually during the 1995 to 1997 period. Successful export sales to Canada depend on competitive pricing and high quality products. U.S. suppliers enjoy several advantages over competitors from Asia and Europe, including geographical proximity, product quality, relatively low-cost production and the elimination of tariffs by 1998 on U.S.-origin goods imported into Canada. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 5208.52 Plain weave cotton fabrics, printed 118 H.S. 5701.10 Carpets of wool or fine animal hair knotted 142 H.S. 5209.42 Denim fabrics of cotton 139 H.S. 5407.52 Woven fabrics of textured polyester filaments, printed 147 H.S. 6002.92 Knitted or crocheted fabrics, of cotton or man-made fibers 189 A) Rank of Sector: 17 B) Name of Sector: AIRCRAFT AND PARTS C) ITA or PS&D Code: AIR 1993 1994 1995 D) Total Market Size 4,885 4,690 4,791 E) Total Local Production 6,668 6,388 6,509 F) Total Exports 4,652 4,463 4,570 G) Total Imports 2,869 2,765 2,852 H) Imports from the U.S. 2,326 2,272 2,353 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Canada's aerospace industry faces difficult challenges in the 1990s. Domestic Canadian production of aircraft is limited to commuter aircraft, business jets and helicopters. Exports account for approximately 70 percent of local production, as domestic manufacturers supply foreign aerospace manufacturers. Analysts agree that restructuring will continue as the long-term focus of the industry moves away from defense-related manufacturing. The defense component of the Canadian aircraft and parts industry accounted for approximately 35 percent of the total Canadian market in 1993. Consequently, the higher proportion of the civil component of the industry should protect the Canadian industry from the impact of a shrinking defense market. The competitive strengths of Canada's aerospace industry are rooted in its early conversion from defense to commercial production and the strong international focus Canada developed to compensate for its limited domestic market. Nonetheless, Canadian firms are not as large as most of their international rivals, and since they do not have the protected domestic markets and direct government investments like other companies in some countries, they lack the resources needed to endure downturns and maintain effective R&D efforts -- the cornerstone of their long-term competitiveness. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8803.30 Parts of airplanes or helicopters, for use in civil aircraft other than undercarriages and parts and propeller and rotors and parts 667 H.S. 8411.91 Parts of turbojet and turbo propeller alternating current engines 515 H.S. 8411.12 Turbojets, turbo propellers and other gas turbines and parts of a 189 thrust exceeding 25 kN A) Rank of Sector: 18 B) Name of Sector: ELECTRICAL POWER SYSTEMS C) ITA or PS&D Code: ELP 1993 1994 1995 D) Total Market Size 4,896 5,014 5,136 E) Total Local Production 3,546 3,574 3,676 F) Total Exports 1,512 1,482 1,526 G) Total Imports 2,862 2,922 2,986 H) Imports from the U.S. 1,890 1,932 1,978 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Canada possesses the fourth largest power generating capacity in the world, with 62 percent of this capacity emanating from hydro-electric power generation and the remaining 38 percent from thermal (including nuclear) sources. The recession and cyclical downturn, in conjunction with increased conservation efforts, have slowed the growth of this industry. Canadian suppliers or Canadian subsidiaries of foreign multinationals generally control the market, especially in the more specialized equipment niches such as nuclear reactors and turbines. Although the two top utilities (Ontario Hydro and Hydro-Quebec) purchase from Canadian-based suppliers and the market is expected to grow very slowly, opportunities for U.S. suppliers exist for innovative technologies or price-competitive products in the more general equipment or aftermarket parts categories. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8411.99 Parts of non-aircraft gas turbines 700 H.S. 8503.00 Parts of electric motors, generators, generating sets and rotary converters 319 H.S. 8411.82 Gas turbine engines - exceeding 5000 kw 186 H.S. 8504.90 Parts for transformers and electrical inductors 102 H.S. 8536.50 Switches 990 A) Rank of Sector: 19 B) Name of Sector:MACHINE TOOLS AND METALWORKING EQUIPMENT C) ITA or PS&D Code: MTL 1993 1994 1995 D) Total Market Size 1,111 1,054 1,067 E) Total Local Production 711 675 683 F) Total Exports 244 232 235 G) Total Imports 644 611 619 H) Imports from the U.S. 354 336 340 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Growth in the machine tool and metalworking equipment sector will be gradual, paralleling Canadian economic recovery. Globalization and international competition will motivate Canadian firms to strive for greater efficiencies through the use of state-of-the-art equipment. Canadian manufacturing strength currently resides in the development and production of high-quality, custom-built systems and metal-forming tools, principally for the North American automotive industry. Despite the rebound in the North American automotive industry, opportunities in the machine tools and metalworking equipment market for economies of scale are limited to smaller firms. Market opportunities do exist for precision metal-cutting tools, mass-produced "standard" machinery, and technically-advanced equipment, such as computerized design and process technology that is not yet widely available in Canada. In these areas, Canadian production is limited or non-existent, but U.S. firms should note the increased foreign competition in these markets, especially from the low-cost Asian producers. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8547.10 Machinery centers, unit construction machines (single station and multistation transfer machines, for working metal) H.S. 8466.94 Cast iron parts for machines of heading 8462 or 8463 72 H.S. 8479.89.90 Industrial robots and parts 71 H.S. 8458.11 Horizontal lathes numerically controlled for removing metal 58 A) Rank of Sector: 20 B) Name of Sector: LABORATORY AND SCIENTIFIC EQUIPMENT C) ITA or PS&D Code: LAB 1993 1994 1995 D) Total Market Size 839 808 829 E) Total Local Production 249 247 267 F) Total Exports 199 209 219 G) Total Imports 789 770 781 H) Imports from the U.S. 429 419 425 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Canada's protracted economic recession as well as government budget constraints have had a negative impact on sales of laboratory equipment. The end-user market is divided equally between the commercial and government/university research sectors. Sales of laboratory equipment are closely linked to consumer spending and research and development budgets of large corporations and universities. As economic activity improves, growth should occur in commercial equipment sales. The university sector is expected to remain quite flat due to governmental budget constraints and opposition to tuition increases. The economic recession has created an expansion in the used equipment market. Domestic Canadian production in this industry is generally confined to niche markets, and the majority of production is exported. U.S. companies seeking export opportunities in Canada can take advantage of their capabilities in selling generic adaptable equipment to the Canadian market. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 9027.9040 Parts and accessories for physical and chemical instruments 189 H.S. 9027.2040 Electrical electrophoresis instruments 10 H.S. 9027.9020 Microtomes 133 H.S. 9027.80 Physical analysis instruments 120 A) Rank of Sector: 21 B) Name of Sector: PACKAGING EQUIPMENT C) ITA or PS&D Code: PKG 1993 1994 1995 D) Total Market Size 279 271 280 E) Total Local Production 164 158 165 F) Total Exports 104 99 105 G) Total Imports 219 212 220 H) Imports from the U.S. 145 143 151 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The need to be more competitive has directly affected the packaging equipment industry. The CFTA and the recently-signed NAFTA have spurred Canadian manufacturers to invest in modern equipment in order to achieve economies of scale. Tougher environmental laws have also necessitated new or modified packaging machinery. Much of local production is for specialized niches and is exported. U.S. producers dominate the Canadian market, although their share is slowly declining. Approximately 65 percent of the total Canadian packaging equipment imports is from U.S. producers. Western European suppliers are gradually increasing their presence in Canada with more environmentally- friendly packaging equipment. As packaging becomes more sophisticated, a major emerging trend is the movement towards custom fitting of machinery and long-term technical service support systems. Opportunities for U.S. suppliers exist in providing packaging equipment that meets or anticipates environmental concerns and/or that meets customers' unique requirements. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8422.40 Packaging or wrapping machinery 90 H.S. 8422.30 Machinery for filling, closing, and sealing bottles, cans, boxes, bags or 105 containers not elsewhere classified, machines for aerating beverages A) Rank of Sector: 22 B) Name of Sector: PROCESS CONTROLS: INDUSTRIAL C) ITA or PS&D Code: PCI 1993 1994 1995 D) Total Market Size 1,802 1,750 1,829 E) Total Local Production 1,262 1,225 1,286 F) Total Exports 740 717 741 G) Total Imports 1,280 1,242 1,284 H) Imports from the U.S. 961 944 1,004 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The resource, resource processing, and manufacturing sectors constitute the principal markets for industrial processing control equipment. Given Canada's economic reliance on its natural resource sectors, industrial process controls represent an important market. The Canadian economic recovery has seen substantial growth in the resource sector, particularly in the junior oil and gas sector. Demand for natural gas, and for domestic heating in both Canada and the United States has led to increased demand for industrial process controls in this sector. Future growth may occur in the industrial process control market as manufacturing industries continue to invest in new equipment to meet the challenges of global competition. U.S. companies supply the vast majority of Canada's imports in this market. Japan, Germany and the United Kingdom represent the largest third-country suppliers to the Canadian market, but they are not a threat to the dominant position of U.S. exports since each country supplies approximately only three or four percent of Canada's imports of industrial process controls. Other countries supply highly specialized niche market products, and constitute only a small portion of Canada's imports in this market. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 9032.89 Process control instruments and apparatus 625 H.S. 9032.90 Parts and accessories for automatic regulating or controlling instruments and apparatus 140 H.S. 9026.10 Instruments and apparatus for measuring or checking flow/levels/liquids 140 H.S. 9028.10 Gas meters 17 A) Rank of Sector: 23 B) Name of Sector: AIRPORT AND GROUND SUPPORT EQUIPMENT C) ITA or PS&D Code: APG 1993 1994 1995 D) Total Market Size 1,136 1,094 1,142 E) Total Local Production 1,535 1,487 1,579 F) Total Exports 729 715 775 G) Total Imports 330 322 338 H) Imports from the U.S. 324 316 329 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Canadian government procurement offers the best prospects for sales in this sector. The Canadian government's Canadian Airspace System Plan initiated in 1984 is a major technology improvement program to upgrade air traffic management. Its annual budget is approximately US$185 million. Most competition faced by U.S. exporters originates from Canadian domestic suppliers. U.S. companies will find engineering support is a key determinant to successful sales of aircraft and ground support equipment in Canada. U.S. suppliers benefit from the fact that standards/procedures are similar for the airport and ground support equipment industries in Canada and the United States. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 8526.10 Radar apparatus 127 H.S. 8526.91 Radar navigational aids 118 H.S. 9014.20 Instruments and appliances for aeronautical and space 104 navigation, other than compasses A) Rank of Sector: 24 B) Name of Sector: DENTAL EQUIPMENT C) ITA or PS&D Code: DNT 1993 1994 1995 D) Total Market Size 166 163 165 E) Total Local Production 71 69 69 F) Total Exports 36 31 32 G) Total Imports 131 125 128 H) Imports from the U.S. 98 96 100 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Although Canada is renowned for its publicly funded universal health care system, coverage does not include direct financing for dental services. The Canadian market for dental equipment will be driven by technological innovation and demographic changes in society. As the Canadian population ages, the market will experience significant growth in the demand for treatments and procedures geared to this segment of the population. Furthermore, the ability of clinics to integrate computer technology into their services will become a focal point in the industry during the next two years. Laser equipment and instruments will continue to be a growth segment of the industry especially for gingivoplasty and hemostasis. Furthermore, there will be an increasing use of innovative computer technologies such as CAD/CAM which will aid in the design, molding, fabrication, and fitting of ceramic restorations. The Canadian market has traditionally been very receptive to U.S. dental equipment and will continue to look to the United States for technologically advanced equipment. Domestic Canadian production of dental equipment satisfies approximately 20 to 25 percent of domestic demand, while imports supply the remainder. U.S. imports have traditionally maintained a dominant share of the Canadian dental equipment market, and supplied no less than two-thirds of the import market. Germany, with a share of approximately ten percent of the market, and Japan, with about four percent, represent the only significant third countries supplying the Canadian market. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 9022.11 Apparatus utilized with x-rays 4.2 H.S. 9021.21 Artificial teeth 10.5 H.S. 9021.29 Dental fillings 10.8 A) Rank of Sector: 25 B) Name of Sector: VETERINARY EQUIPMENT AND SUPPLIES C) ITA or PS&D Code: VET 1993 1994 1995 D) Total Market Size 88 82 84 E) Total Local Production 15 14 14 F) Total Exports 3 3 3 G) Total Imports 76 71 73 H) Imports from the U.S. 42 47 48 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Canada's protracted economic recession had a dampening impact on veterinary equipment sales. Many companies have increasingly oriented themselves as service companies and have tried to obtain competitive advantages through this side of the business. Competition in the veterinary equipment market has increased significantly in the past five years. Many companies that were previously dedicated to human medical equipment have added lines of veterinary equipment as a way of increasing sales. Overall, increased competition has translated into tighter net profit margins and less value-added manufacturing. Another major trend in the Canadian veterinary equipment market is the increased volume of used equipment purchases in order to reduce capital expenditures. Domestic Canadian production of veterinary equipment is limited (and primarily involves equestrian and bovine related equipment), and therefore, the majority of market demand is satisfied by imports. The United States maintains its dominant position in the Canadian veterinary equipment market, supplying the majority of imports. European countries supply some imports as well, usually the more technologically sophisticated products, while Asian countries supply some of the more generic and general use products. K) Promising Subsectors/Estimated 1995 Total Market Size: H.S. 9018.19 Computer base vital function monitoring equipment 4.5 H.S. 9018.90 Dental and optical instrumentation adapted for veterinary sciences 16.2 A) Rank of Sector: 1 B) Name of Sector: FRESH VEGETABLES C) ITA or PS&D Code: Fresh Vegetables 1993 1994 1995 D) Total Market Size 1,060 1,067 1,123 E) Total Local Production 640 639 660 F) Total Exports 402 430 477 G) Total Imports 822 858 940 H) Imports from the U.S. 700 727 808 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: On a per capita basis, Canada has one of the highest consumption rates of fresh vegetables in the world. In Canadian retail grocery stores, more space is devoted to fresh produce than to any other food sector. Canadian immigration over the last decade has tended to be dominated by persons whose traditional dietary habits include large amounts of fresh vegetables. The popularity of salad bars at restaurants continues to grow. Due to climatic factors, the domestic growing season for fresh vegetables is short but Canadian year-round demand for imported fresh vegetables from the United States is enhanced by a modern transportation and wholesale network that can provide Canadian buyers with prompt delivery. Canada still applies higher seasonal duties on fresh vegetable imports during the local marketing season but these are in effect for a relatively short period during the year. The duty levels are being lowered in annual increments under the CFTA and will fall to zero by January 1, 1998. A) Rank of Sector: 2 B) Name of Sector: BAKED GOODS (Baked Goods includes Cookies, Breads, Crispbreads Pies, and Crackers) C) ITA or PS&D Code: Baked Goods 1993 1994 1995 D) Total Market Size 1,981 1,955 2,037 E) Total Local Production 1,938 1,918 1,982 F) Total Exports 217 226 239 G) Total Imports 260 263 294 H) Imports from the U.S. 201 204 250 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Formerly a net exporter of baked goods, Canada's baked goods industry experienced a turnaround in international trade in the 1990s with the value of imports exceeding exports. Most of the increase in imports has been to the benefit of U.S. exporters, a trend which is expected to continue into 1995 and beyond. Larger U.S. bakery plants that are more automated and more efficient than their Canadian competitors are well positioned to service large Canadian metropolitan centers close to the border. Canadian import licenses on wheat and flour products (including bread, buns, bagels, rolls, pastry, cakes, and muffins) are no longer required on imports from the United States. Diminishing tariff rates under the CFTA are increasing the competitiveness of U.S. bakery products in Canada. Many large Canadian grocery chains offering house brand baking products are turning to U.S. manufacturers for their finished baked goods. Canadian consumers are demanding a wide range of ready-to-eat baked goods. Independent studies indicate a growth in consumption patterns for virtually all baked good categories with the exception of white bread. A) Rank of Sector: 3 B) Name of Sector: ANIMAL FEEDS (excluding cat and dog) C) ITA or PS&D Code: Animal Feeds 1993 1994 1995 D) Total Market Size 2,385 2,355 2,482 E) Total Local Production 2,326 2,300 2,423 F) Total Exports 67 73 88 G) Total Imports 126 128 147 H) Imports from the U.S. 97 102 121 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The Canadian market for prepared animal feeds (livestock, poultry, horses, fish, etc.) and feed supplements showed steady annual growth throughout the early 1990s. The trend is expected to continue. Imports are forecast to capture an increasing share of the market over the next few years. Imports from the United States could grow at an annual rate of more than ten percent through 1995. A) Rank of Sector: 4 B) Name of Sector: PET FOOD (Dog and Cat) C) ITA or PS&D Code: Pet Food 1993 1994 1995 D) Total Market Size 493 508 558 E) Total Local Production 395 402 426 F) Total Exports 64 73 88 G) Total Imports 162 179 220 H) Imports from the U.S. 156 175 217 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: The total market for pet food in Canada doubled during the 1980s and has continued strong growth throughout the early 1990s. As a result of accelerated tariff removal under the CFTA, dog and cat food from the United States has entered duty-free since April, 1990. U.S. exporters have sharply increased their market share of the Canadian pet food market since that time. Imports from the United States captured 32 percent of the market in 1993. The share is expected to rise to nearly 40 percent by 1995. U.S. manufacturers who can increase efficiencies through the automation of production can compete well in the Canadian market. Canadian consumers are becoming increasingly conscious of the nutritional qualities of pet food. According to Canadian studies, this has led to the emergence of a premium and special diet subsector of the pet food market, which is largely served through specialty pet food retail stores. Canadian retail grocery stores are the other important outlet for retail pet food sales. While dog food remains the largest market segment, the cat food category has been growing in importance reflecting an increasing number of pet cats. Modern urban lifestyles, including a growing number of two wage earners, has contributed to a rise in the number of Canadian families choosing cats as pets. A) Rank of Sector: 5 B) Name of Sector: SNACK FOOD (Snack Food includes Potato Chips, Popcorn, Prepared Nuts, Pretzels and Corn Chips) C) ITA or PS&D code: Snack Food 1993 1994 1995 D) Total Market Size 616 640 713 E) Total Local Production 554 576 639 F) Total Exports 2 2 2 G) Total Imports 64 66 76 H) Imports from the U.S. 63 65 73 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Strong growth is forecast for Canada's snack food market into 1995. According to a major market research company, the potato chip is the undisputed leader with an estimated 54 percent market share (1992). However, Canadian consumers are beginning to purchase a wider range of salted snacks. Corn-based Nachos (for dipping) are increasing in popularity, an indication that Canadians are willing to try different snacks with a different taste and texture. A) Rank of Sector: 6 B) Name of Sector: BREAKFAST CEREAL AND PANCAKE MIX C) ITA or PS&D Code: Breakfast Cereal and Pancake Mix 1993 1994 1995 D) Total Market Size 486 502 551 E) Total Local Production 465 468 507 F) Total Exports 72 68 73 G) Total Imports 93 102 117 H) Imports from the U.S. 90 95 110 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: A growing awareness of the importance of fibre in the diet has resulted in strong growth in the breakfast cereal market in Canada. Competition in the Canadian ready-to-eat (RTE) breakfast cereal market is heavy (about one hundred cereal brands) but the market is growing, particularly in the children's segment. In the mid-term (to 1995) the "all family" segment is expected to show modest growth while sales in the adult category are forecast to be flat. In a recent industry survey, 90 percent of reporting households in Montreal and Toronto purchased RTE cereals in a six month survey period. The share of the total market (including pancake mix) served by U.S. product is forecast to increase to about 22 percent in 1995 from 19 percent in 1993. A) Rank of Sector: 7 B) Name of Sector: FRUIT AND VEGETABLE JUICES C) ITA or PS&D Code: Fruit and Vegetable Juices 1993 1994 1995 D) Total Market Size 340 332 349 E) Total Local Production 87 73 81 F) Total Exports 14 11 11 G) Total Imports 267 270 279 H) Imports from the U.S. 156 146 151 I) Exchange Rate (C$1=US$X) 0.7753 0.7305 0.7342 J) Comments: Canada is dependent on imports of fruit and vegetable juices (fresh or frozen) to meet total market demand. U.S. exporters in the frozen orange juice segment face growing competition from Brazilian product which is normally imported in bulk for repacking in Canada. Best prospects include the retail market segment, custom retail packaging for Canadian distributors, and new products and blends in new packaging. On a value basis, imports from the United States are forecast to maintain a 43 percent share of the total market in 1995. A) Rank of Sector: 8 B) Name of Sector: MILLED RICE C) ITA or PS&D Code: Milled Rice 1993 1994 1995 D) Total Market Size * 140 160 180 E) Total Local Production * 0 0 0 F) Total Exports * 0 0 0 G) Total Imports * 140 160 180 H) Imports from the U.S. * 96 100 130 I) Exchange Rates: N/A J) Comments: The Canadian market for rice is expected to continue the steady growth of recent years. Rice is offered frequently by restaurateurs as an accompaniment to menu entrees. An increasing number of Canadian manufacturers of frozen prepared meals are using rice as an ingredient. The general public perceives rice as a food suitable for health conscious diets. Rice is readily available in large size containers at every retail bulk food outlet. * denotes "thousands of metric tons" Notes to the Best Prospects and Sector Export Prospects (i) All figures are expressed in millions of U.S. dollars, unless otherwise indicated. (ii) All growth rates are considered in real terms. (iii) Estimated inflation/exchange rates are as follows: 1993 1994 1995 Exchange Rate (C$1 = US$X) 0.7753 0.7305 0.7342 Inflation Rate 1.8 0.6 1.9 (iv) "Promising Subsectors" are ranked in order of best prospects for increased U.S. exports to Canada.