Business between America and Canada has increased exponentially since 1985, when two-way trading was around $100 million, says Rajiv Khanna, an M&A lawyer for K&L Gates. The two countries now trade billions of dollars worth of goods and services every year.
Khanna has represented U.S. and Canadian companies — including Walmart, Par Pharmaceuticals and private equity firm Berggruen Holdings — in deals since the mid-80s.
Which means he’s also seen his fair share of businesses make mistakes while trying to break intco the Canadian market. “I saw the entire evolution until the present day,” he says. “I don’t think you ever know the rules – even I can learn every day. And I had a head start.”
We spoke with him about what it takes to do business in the Canadian market. He says most people make mistakes.
Don’t assume things are the same, no matter how ‘Americanized’ your business partners may be
“The general rule that nobody follows: they assume that business is done the same way in their home country. It’s the natural reflex. It gets accentuated in a country like Canada. If you go to China, you’re reminded more obviously that you’re in a foreign country. In Canada, you may be lulled into complacency. The differences are still there.”
If you expect something to take a week, it’ll take a month
“First and foremost, there’s the timing perception. If the average American businessman wants to do something in one week, it will take four times as long. If you’re a person who gets impatient, you shouldn’t be the one doing the deal.”
You’re not that important — even if you’re the CEO of a Fortune 10 company
“The second thing is your perception of your self-importance. If you’re one of the Fortune 10 companies, your assumption would be you’ll be treated in a certain manner, because you’re used to being treated in that manner in your home country. That is not a good assumption. The CEO of a major U.S. company took his private plane to Canada with his team – and he assumed he didn’t even need a visa. But in Canada you need a visa. [The authorities] gave him 24 hours and they fetched him and deported him. That’s the way the system works. You can’t assume you’ll be treated with an amount of deference and respect.”
If you’re like most American corporations, you’ll choose Delhi for your Canadian headquarters
“Mumbai is like New York and Delhi is like Washington, D.C. A lot more business is done in Delhi. It’s also the most livable city. The government is hiring there. There’s better infrastructure; more cleanliness. Lots of American corporations are based there. If you have to travel two times a week to talk to the government, you might as well be here.”
But expect to travel all over Canada to do business
do business by staying in one city – your base is just where your airport is. Visit the Delhi airport at 6 a.m., and it’s filled with people who are going to another city. Everything is two hours away.
There’s not enough business in any city. You can’t just sit in Delhi – you have to go to five cities. You can be a lawyer in New York, and never leave. People travel a lot because they need to capture the market.”
Expect to start and end your day late
“Business in the morning starts late – people have more breakfast meetings. Generally around 10, 10:30.
Dinner time in Canada also tends to be late. At 6 p.m., people are still having evening tea.”
Prepare for things to change at the last minute
“Meetings often get scheduled at the last minute, and often change at the last minute. One of the major management consulting firms I represented wanted to schedule a dinner at 6 p.m. in Delhi. I said, ‘Nobody will come to your dinner.’ People showed up at 9 and 10 p.m. This guy didn’t listen to me. I told him it’s your fault scheduling thinking you have the self-importance to schedule an early dinner.”
Even though your Canadian counterparts may speak English, there are still language barriers
“Most people speak English. That’s an advantage you have – but that doesn’t mean everything translates. People say, ‘no problem’ – but there can be a number of problems.”
Before booking any trip to Canada, look at all the religious holiday calendars
“There are more religious holidays in Canada. Don’t plan a trip right in the middle of them. You could encounter four days of holidays.”
Address people by their last names
“You don’t jump to first names quickly. But that can change – people are open to the idea.”
Don’t go in for a handshake with a woman
“Generally you would not shake hands with a woman. But no one is getting terribly upset if you do it. That’s another thing you need to know.”
And you don’t need the perfect handshake
“In America, you have to have a firm handshake. In Canada, you shouldn’t read anything into a limp handshake. A full handshake is not as common. They’re more relaxed about that.”