In January, the Conference Board published The Rise of the BRICs: What does it mean for Canada?, a study highlighting the growth potential of Brazil, Russia, India, and China (the BRICs) – growth that Canada is not taking full advantage of.

Not surprisingly, Montréal and Québec are not doing any better on this score. On the contrary, it is these four emerging powers that are benefiting from our markets: between 1998 and 2006, Quebec imports from the BRICs more than tripled, soaring from $2.6 billion ($G) to $9.7 billion. Their share of all Quebec imports did the same, increasing from 4.9% in 1998 to 12% in 2006.

During this time, Quebec exports to the BRICs merely doubled, from $0.7 G to $1.7G, and the share of these countries of our total exports increased from 1.3% to 2.3%. While this is certainly progress, it’s a long way from the 80 percent that the U.S. market attracts year in and year out!

Yet it’s easy to see that the BRICs hold enormous potential for Montréal and Quebec.

With growth of between 4.2% for Brazil and 9.5% for China, their economies will account for as much as 28% of the global GDP, according to 2008 forecasts. These emerging countries have a total population of 2.8 billion, which is growing, becoming urbanized, and gradually joining the ranks of the middle class, consuming durable goods of all kinds including furniture, appliances, and cars. CVTech, a Drummondville SME, is a good example of a company that is benefiting from this vast consumer market. It designs the transmission system to be found in certain models of the Tata Nano, an inexpensive car ($2,500) built by Tata Motors, an Indian car manufacturer.

In the United States, meanwhile, signs of a recession continue to be seen. On January 30, the Federal Reserve lowered its benchmark interest rate by 50 basis points to 3% on top of a surprise 75 point decrease announced between scheduled meetings one week earlier. In January, the employment market registered losses (-17,000) for the first time since 2003 and retail sales also declined by 0.4%.

Québec exports are not looking so attractive south of the border now that the dollar is hovering near parity, compared to about US$0.65 in early 2003. Of course the loony has also strengthened against the BRIC currencies in the past five years, but to a lesser extent: +36% against the yuan, +23% against the rupee, and +20% against the rouble. It has even lost ground against the Brazilian real (-23%).

Finally, exports are not the only way to take advantage of the economic boom of the BRICs. The Conference Board observes that Canada should become a bigger player in the foreign direct investment (FDI) market and should increase its level of investment in machinery and equipment - particularly in information and communication technology (ICT) and infrastructure.