Caitlyn Roth, Market Engagement Manager, Colorado Office of Economic Development and International Trade, Global Business Development
Author: Caitlyn Roth, Market Engagement Manager, Colorado Office of Economic Development and International Trade, Global Business Development
In the vast expanse of North America, Canada and Colorado represent two distinct yet interconnected regions with a thriving economic relationship. Though separated by thousands of miles, the economic ties between the Canadian provinces and Colorado have strengthened over recent years, reflecting a robust partnership that spans various industries from natural resources to technology. This article delves into the intricate economic relationship between Canada and Colorado, highlighting key sectors of interaction, diplomatic ties, and the future outlook for this transnational partnership.
Historical Context and Economic Ties
The economic relationship between Canada and Colorado has evolved over time, reflecting broader trends in North American trade. Historically, the United States and Canada have been each other’s largest trading partners, a relationship solidified by agreements such as the Canada-United States Free Trade Agreement (FTA) in 1988 and its successor, the North American Free Trade Agreement (NAFTA) in 1994. Today Canada -U.S. trade is governed by the USMCA Trade Agreement. These agreements significantly reduced trade barriers and tariffs, fostering greater economic integration between the two nations. Trade with Canada supports 146,800 employees in Colorado in addition to the 21,100 employees at Canadian-owned businesses across the state.
"Trade with Canada supports 146,800 employees in Colorado in addition to the 21,100 employees at Canadian-owned businesses across the state."
Colorado, with its central location in the United States and an advanced and diversified economy, naturally became a key player in this relationship. The state's proximity to Canada and its well-developed transportation infrastructure facilitated the flow of goods, services, and people between the two regions. Over the years, Canadian businesses have increasingly recognized Colorado's strategic importance, leading to a deepening of economic ties. In 2023, Colorado exported $1.8 billion to Canada, making the country Colorado’s largest export partner, accounting for 18% of Colorado’s export trade. Colorado exports to Canada grew by 8.7% from 2022-2023 and at an average annual rate of 5.8% over the last five years. Colorado’s top exports to Canada are meat; industrial machinery, including computers; and optical, medical, and surgical equipment.
"Colorado exports to Canada grew by 8.7% from 2022-2023 and at an average annual rate of 5.8% over the last five years. Colorado’s top exports to Canada are meat; industrial machinery, including computers; and optical, medical, and surgical equipment."
Conversely, in 2023, Colorado imported $5.5 billion from Canada. Canada is the largest import partner for the state, accounting for 31% of Colorado’s import trade. Colorado imports from Canada fell by -10% from 2022-2023 but have grown at an average annual rate of 11% over the last five years. Notably, imports from Canada falling by 10% in 2023 can be attributed to a $517 million decrease in the import of crude oil. Colorado’s top imports from Canada are mineral fuel and oil; wood and articles of wood; and industrial machinery including computers.
Investment
Investment flows between Canada and Colorado are another critical component of their economic relationship. Canadian companies investing in Colorado come from the Aerospace and Information & Technology industries among others. Over the last five years, OEDIT’s data sources report Canadian companies completing 11 FDI projects in Colorado for a total of $180 million in capital expenditure and creating an estimated 512 jobs. For example, FulcrumAir Inc., an Alberta-based commercial drone and aerial robotic technologies manufacturer, selected Wellington, Colorado as its U.S. headquarters in August 2021. Further, Canadian-headquartered Nutrien is a major employer in Colorado with its U.S. headquarters in Loveland. Nutrien partnered with Colorado State University to build a state-of-the-art research, learning and innovation space, establishing the Nutrien Agricultural Sciences Building on campus.
"For example, FulcrumAir Inc., an Alberta-based commercial drone and aerial robotic technologies manufacturer, selected Wellington, Colorado as its US headquarters in August 2021. Further, Canadian-headquartered Nutrien is a major employer in Colorado with its U.S. headquarters in Loveland. Nutrien partnered with Colorado State University to build a state-of-the-art research, learning and innovation space..."
Conversely, Colorado-based companies have also invested in Canada, particularly in the energy and technology sectors. Over the last five years our data sources report Colorado companies completing 21 FDI projects in Canada for a total of $2.8 billion in capital expenditure and creating an estimated 1,489 jobs. For example, Optiv Security Inc., a Denver, Colorado-based cyber security software developer, opened a security operations center in Mississauga, Ontario.
The shared business culture and similar regulatory environments between Canada and Colorado make cross-border investments relatively straightforward, further strengthening economic ties.
Diplomatic and Cultural Ties
Colorado celebrates strong diplomatic relations with Canada. At a national level, American and Canadian military forces cooperate on continental defense at the North American Aerospace Defense Command (NORAD), the world’s only binational military command, located in Colorado Springs. Canada maintains a Consulate General in Denver, which conducts constituent services as well as political and trade affairs for the Canadian government in a region that includes Colorado, Utah, Wyoming, Montana, and Kansas.
"At a subnational level, Colorado and the province of Alberta established a formalized partnership this year by signing a Memorandum of Understanding to advance the export development, investment attraction, solution oriented research, and commercialization of advanced energy and carbon management, such as carbon sequestration, clean hydrogen, and geothermal energy."
At a subnational level, Colorado and the province of Alberta established a formalized partnership this year by signing a Memorandum of Understanding to advance the export development, investment attraction, solution oriented research, and commercialization of advanced energy and carbon management, such as carbon sequestration, clean hydrogen, and geothermal energy.
Tourism is a vital part of the strong ties between Canada and Colorado. Canadians are among the top international visitors to Colorado, drawn by the state’s world-class ski resorts, national parks, and vibrant cities. Canadian tourists contribute significantly to Colorado’s economy, spending millions of dollars annually on accommodations, dining, and recreational activities. The flow of tourists is not one-sided. Colorado residents also travel to Canada, particularly to destinations such as Vancouver, Toronto, and the Canadian Rockies. This exchange of tourists fosters cultural ties and generates economic benefits for both regions. With six direct flights from DEN to Vancouver, Toronto, Montreal, Calgary, Edmonton and Winnipeg, Canadians and Coloradans have no shortage of convenient travel options.
Looking Ahead
"The future holds significant opportunities for enhancing this economic partnership. Having the Canadian Consulate General in Denver and organizations dedicated to strengthening the economic and business ties between Canada and Colorado like MAPLE® Business Council, Colorado and Canada are closer than ever."
The future holds significant opportunities for enhancing this economic partnership. Having the Canadian Consulate General in Denver and organizations dedicated to strengthening the economic and business ties between Canada and Colorado like MAPLE® Business Council, Colorado and Canada are closer than ever. The growing focus on renewable energy presents a chance for Canada and Colorado to collaborate more closely on clean energy projects. As global supply chains evolve in response to geopolitical shifts, there is potential for Canada and Colorado to deepen their integration, particularly in high-tech industries and advanced manufacturing. Respective strengths in agriculture technology and forestry are other areas of partnership to continue exploring.
By building on their shared economic interests and addressing challenges collaboratively, Canada and Colorado can continue to strengthen their economic partnership for the mutual benefit of their businesses, workers, and communities.
For more information or to get connected to relevant units in OEDIT please contact Caitlyn Roth, Market Engagement Manager, OEDIT Global Business Development, caitlyn.roth@state.co.us
About the Global Business Development Division: The Global Business Development (GBD) division supports Colorado businesses and communities by using a data-driven approach to recruit, support, and retain businesses that contribute to a robust and diversified economy. We regularly host foreign delegations and participate in trade and investment missions around the world to strengthen global awareness of Colorado. Our services include: export services and promotions; foreign direct investments; business recruitment, retention, and expansion; data analytics; advanced industries accelerator grants.
