December 16, 2024 Increasing Flow Of Canadian Investment Into Buffalo Niagara

Volume 27 | Issue 4

The secret behind how Buffalo, NY has created a pro-business environment to attract Canadian business expansion.

Click here to read the complete illustrated article or continue below to read the text article.

by Thomas A. Kucharski

With two of the planet’s ten largest economies sharing the longest international land border, it only makes sense Canada and the United States are close trading partners. Both are resource rich and have held a peaceful relationship for centuries, making it natural that they’ve worked closely for each other’s benefits. Buffalo Niagara, in Western New York, has taken advantage of their position on the map to become a powerhouse in attracting foreign direct investment, especially from Canadian organizations looking to grow.

The city is a gateway for over $90 billion in trade annually, approximately 15 percent of all trade between the two economic powerhouses. In fact, more trade flows each year between Buffalo Niagara and Canada alone than the entirety of the United States and other leading economic juggernauts, such as France, Brazil and Australia. Building this sort of reputation didn’t happen overnight. Instead, the city has tediously built itself up as the ideal candidate for businesses to expand and grow over the past few decades through its unique geographical position and instituting business-friendly policies.

Prime Logistics Position

When the Erie Canal first opened in 1825, it was Buffalo that was the critical gateway to accessing the newly established trade route from the Atlantic Ocean. Today, Buffalo Niagara has evolved into the region now being the first major U.S. port of call when entering the Great Lakes, which are responsible for an additional $278 billion in bilateral trade between the United States and Canada.

But the evolution hasn’t stopped with progression on the Buffalo Niagara region’s waterways; investment has continued because of Buffalo’s unique position as an unlikely global logistics hub. For starters, Toronto’s massive $265 billion economy is only a 90 minute drive away. New York City and its more than $2 trillion economy isn’t much further, just being a six hour drive away. In fact, despite being in the Northeast corner of the United States, Buffalo Niagara has positioned itself as a central hub, with over 40 percent of the combined United States and Canadian population being located within only a day’s travel of the city.

Sucro Sourcing is a prime example of a company that has benefitted from the Buffalo and Canadian cross-border exchange. The sugar refinery has two locations: one in Lackawanna, New York, and another in Hamilton, Ontario. Raw sugarcane arrives by cargo ships from South and Central America and is processed into sugar and molasses at both sites. Molasses from the Hamilton refinery is then shipped to Lackawanna for further sugar extraction to make more products. At just 68 miles apart, this proximity has led Sucro to expand operations in both locations.

Accessibility to other markets, coupled with the region’s seven international ports of entry via auto, rail and water, and two of the largest Foreign Trade Zones in North America, makes it an incredibly effective springboard from which to launch, build and expand businesses.

Cultivating an Environment Catered to Grow Businesses

It’s not hard to find a community that calls itself “business friendly”, but it is rare to find one that has relentlessly worked to create such a smooth runway for businesses to grow as Buffalo has.

Invest Buffalo Niagara – the region’s nonprofit economic development organization – has made it especially easy for Canadian companies, as well as those from other regions, to expand into the Western New York market. This includes free project management services, incentive coordination, site coordination, as well as expert connections to help companies navigate any thorny regulatory requirements as they grow into a new territory that may have different restrictions than their own.

But once those businesses are established in their new communities, Buffalo Niagara provides other incentives to keep growth sustainable. The city doesn’t impose any sales tax on production or research and development equipment and it has no inventory/real personal property tax. We offer dozens of programs focused on investing in workforce training, energy efficiency, providing grants and loans, and much more to help businesses plant their roots, and ensure they grow deep. The wide base of experienced workers, as well as up and coming graduates from dozens of higher-education institutions like Niagara University and the University at Buffalo, provides our businesses with a robust talent pipeline.

Becoming the American Foothold for Canadian Companies

As a result of these factors mixing together, we’ve seen an incredible amount of Canadian direct investment, especially from companies looking to gain a foothold in the American market for the first time. The region is already home to hundreds of Canadian companies that have opened new operations or invested in job creation.

Earlier in 2024, Ontario’s Lifco Hydraulics invested over $2 million into the region, creating over 40 new jobs. Another Ontario-based company, Norgen Biotek, made a similar move this year, investing $5 million for a new 2,800 square foot manufacturing facility in Niagara Falls, as well as a research and development lab at the Buffalo Niagara Medical Campus.

This growth is only expected to continue, especially in manufacturing. With a zero percent state corporate income tax for manufacturing companies and a deep talent pool of nearly 70,000 advanced manufacturing workers, Buffalo Niagara is a prime location. Canadian manufacturers launching in the U.S. are already leveraging these benefits and we expect this to develop into a larger trend.

For instance, we have seen increased interest and traction in green energy projects. Both Electrovaya and Worksport – Canadian manufacturers in battery storage – underwent significant expansions into Buffalo Niagara over the last few years, creating over 400 new jobs.

This growth is spreading into the life sciences, food and beverage processing, and advanced business services, all industries that can benefit from the unique proposition Buffalo Niagara offers.

For Canadian companies looking to expand their scope into the United States, or even just expand their international business operations, Buffalo Niagara has proven to be a great springboard, across a number of different industries. It’s never been more important to build out a globalized company, taking advantage of all potential markets, and taking advantage of business- friendly environments in Buffalo Niagara is one of the best ways to get started.

About the Author:
Thomas A. Kucharski has served as President and CEO of Invest Buffalo Niagara since 2000. Under his leadership, Invest Buffalo Niagara has grown from a start-up initiative to an innovative regional economic development organization that has secured more than 400 successful project wins representing $6 billion in investment in the region and over 65,000 jobs created and/or retained. From the onset, Tom helped Invest Buffalo Niagara form strong, enduring partnerships with business, development and academic leaders throughout the Buffalo Niagara region. Learn more at Invest Buffalo Niagara.

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