CARPE DIEM CANADA! - SEIZING THE MOMENT FOR CANADIAN COMPANIES TO INVEST IN LOS ANGELES
Author: Terri Batch, CEO, Global LA, Los Angeles
There are a lot of exciting events coming to Los Angeles, and with those events, comes the opportunity to build a lasting presence in the Los Angeles region. Los Angeles has a lot of great things going for itself and now is the time to jump in and get involved in an economic wave that comes only once in a generation. Carpe Diem Canada!, meaning seize the moment, Canada, to establish a strong presence in Los Angeles, especially ahead of the 2026 World Cup and 2028 Summer Olympic and Paralympic Games.
I’ve had the privilege of visiting Canada twice in the past decade. Once to Toronto for a reunion of the St. Kitts & Nevis diaspora community with my mother-in-law and once to Vancouver, British Columbia for a business conference focused on the built environment. Both times, I was struck by the similarities between the U.S. and Canada. We share many things in common with Canada, such as a diverse population and democratic governance. Many times, in my previous role at the U.S. Department of Commerce, I would ask companies if they were involved in exporting, they would tell me no. But then when I asked where they sell their products or services, they would include locations in Canada. And I would remind them that a sale to Canada is considered an export! With Canada being our northern neighbor and ally, the businesses exchanges seem natural and even inevitable.
While I was in Toronto for the Nevisian community gathering, I enjoyed spending time as a tourist. The city boasts the same diversity of cultures and interesting destinations as Los Angeles. I spent time going to the top of the CN Tower, exploring the harbor by boat, visiting the Bata Shoe Museum, admiring the Casa Loma castle, and grabbing delicious Chinese food in Chinatown after taking a convenient streetcar through the city. It was a wonderful experience and reminded me of Los Angeles. No wonder Los Angeles is a top destination for Canadian tourists!
Tourism is not the only thing that brings Canadians to the Los Angeles area. Los Angeles and Canada enjoy a robust business relationship. Canada plays a significant role in foreign direct investment (FDI) in Los Angeles and the broader Southern California region. According to the LA Economic Development Corporation and California Governor’s Office of Business, Canada ranks as one of the top five foreign investors in California. Canadian firms in Southern California contribute significantly to the local economy, supporting approximately 50,000 jobs.
Canadian foreign investment in Los Angeles spans various industries and showcases a strong economic relationship between our two regions. Some notable examples of Canadian investment in Los Angeles include:
Entertainment and Media - Canadian companies are highly active in Los Angeles' entertainment sector, with investments in film and television production. For instance, Lionsgate, a major entertainment company, has significant Canadian roots and operates heavily in Los Angeles, where its U.S. operations are headquartered. This represents a prime example of cross-border collaboration in one of LA’s key industries.
Technology and Software - Companies like Shopify, a Canadian e-commerce giant, have established a presence in Los Angeles to access the tech and startup ecosystem. This allows them to tap into the innovation and talent within the region's growing tech industry.
Real Estate - Canadian pension funds and real estate firms have made significant investments in the Los Angeles property market. For example, Brookfield Asset Management, a Toronto-based investment firm, has invested in large commercial and residential real estate projects in downtown Los Angeles, including skyscrapers and mixed-use developments.
Transportation and Infrastructure - Canadian transportation companies, such as Bombardier, which is known for its aerospace and transportation solutions, have been involved in projects within Los Angeles, particularly in relation to public transportation and rail systems.
These investments illustrate how Canadian companies play a vital role across a wide range of sectors in Los Angeles, contributing to job creation, economic growth, and cultural exchange.
The renegotiated North American Free Trade Agreement (NAFTA) now known as the US-Mexico-Canada Agreement (USMCA) provides opportunities for Canadian investors looking to maximize expanded trade and investment options in the U.S. Here's how Canadian investors can leverage this agreement:
1.Investment Protections
The USMCA includes specific provisions that protect investors from Canada when investing in the U.S. These protections ensure fair treatment under U.S. law and provide mechanisms for resolving disputes related to investment, such as expropriation without compensation, fair market treatment, and protection against discrimination.
National Treatment & Most-Favored-Nation (MFN): Canadian investors are entitled to the same treatment as U.S. investors or investors from third countries, allowing them to operate on a level playing field.
Investor-State Dispute Settlement (ISDS): While ISDS provisions were scaled back in the USMCA, certain sectors, including energy and infrastructure, still have access to ISDS between Canada and the U.S. through legacy claims and transitional arrangements.
2. Access to U.S. Markets
USMCA enhances market access across various sectors, allowing Canadian investors to participate more freely in U.S. industries such as manufacturing, technology, financial services, and more:
Reduced Trade Barriers: Tariff elimination and streamlined customs procedures under the USMCA facilitate cross-border trade, making it easier for Canadian investors to import or export goods between the U.S. and Canada. This supports businesses seeking to expand their supply chain or establish operations in the U.S.
Access to Public Procurement: USMCA maintains opportunities for Canadian businesses to bid on U.S. government procurement contracts, which is valuable for investors seeking opportunities in public infrastructure projects.
3. Digital Trade and E-commerce
The USMCA includes strong provisions on digital trade, benefiting Canadian investors in technology and e-commerce sectors:
Free Data Flow: The agreement promotes cross-border data flows, essential for businesses operating digitally. Canadian tech firms or investors in e-commerce benefit from reduced restrictions on digital trade between the U.S. and Canada.
Protection of Intellectual Property (IP): USMCA strengthens IP rights, ensuring that Canadian companies' innovations, trademarks, and copyrights are protected in the U.S. market, which is vital for those investing in technology, media, and other IP-intensive industries.
4. Labor Mobility
Although USMCA does not significantly expand labor mobility provisions beyond what existed in NAFTA, the agreement still facilitates some movement of professionals between Canada and the U.S., which can be beneficial for investors and business managers:
Temporary Entry for Business People: Certain categories of professionals, including investors and intra-company transferees, can temporarily enter the U.S. for business purposes. This allows Canadian investors to oversee operations or manage investments in the U.S. with reduced bureaucratic barriers.
5. Sectoral Opportunities
USMCA specifically addresses key sectors with enhanced provisions that may be of interest to Canadian investors:
Energy: Investors in the energy sector benefit from strong protections, particularly for investments in oil, gas, and renewable energy. The U.S. remains a critical energy trading partner, and USMCA facilitates smoother transactions in energy infrastructure projects.
Automotive: The automotive industry has specific content rules under the USMCA, providing opportunities for Canadian investors involved in the production of parts or vehicles. The new rules incentivize investment in North American production, benefiting Canadian firms investing in U.S.-based automotive ventures.
6. SMEs and Investment Support
The USMCA encourages small and medium-sized enterprises (SMEs) to participate in cross-border trade and investment, offering resources and support for Canadian SMEs looking to invest or expand in the U.S. market:
SME Chapter: The agreement includes a dedicated chapter to support SMEs by providing information on trade and investment opportunities and reducing administrative barriers, helping Canadian SMEs navigate U.S. market entry.
Some Considerations for Investors:
Regulatory Compliance: Despite the USMCA, Canadian investors must still comply with U.S. federal, state, and local laws, which may vary by industry. Investors should ensure they understand the specific regulatory landscape of the sector they plan to invest in.
Currency Risk: Fluctuations in exchange rates between the Canadian dollar (CAD) and U.S. dollar (USD) can impact returns on investment. Canadian investors should consider hedging currency risks when making long-term investments in the U.S.
Tax Implications: The U.S. and Canada have a tax treaty that helps avoid double taxation. However, investors should seek professional tax advice to structure their investments efficiently and minimize tax liabilities.
By leveraging the provisions of the USMCA, Canadian investors can capitalize on the protections, market access, and streamlined regulations to expand their operations or invest profitably in the U.S.
Global LA welcomes continued investment into the City of Los Angeles and the region from Canada. We work collaboratively with economic development organizations in the region to support foreign companies that are not only considering the city of Los Angeles, but anywhere in Southern California. A list of some of the local organizations are provided below as well as other resources that will help you to plan and develop a strategy for investing in Los Angeles. We also look forward to continued engagement with MAPLE Business Council and the Canadian Consulate General in Los Angeles.
If you are interested in contacting Global LA, visit our website to learn more at www.global.la or send an email to info@global.la. You can also sign up for our newsletter to stay informed of local events in Los Angeles. We look forward to welcoming increased engagement with Canada ahead of the upcoming 2026 World Cup and 2028 Summer Olympic and Paralympic Games.
To stay informed of opportunities related to the upcoming 2026 World Cup and 2028 Summer Olympic and Paralympic Games:
Local Organizations Focused on Foreign Direct Investment into the LA region in addition to Global LA:
Additional Information about the U.S. Mexico and Canada Agreement:
Additional Reports About Canadian Investment into Los Angeles and California: