5 Canadian industries that could benefit from lifting Iran sanctions

[Bombardier Inc.’s Global 7000 business jet flight test vehicle is shown on the floor of the company’s assembly line in Toronto, Ont., Nov. 3, 2015. REUTERS/Euan Rocha]

The Canadian government has revealed it will lift sanctions on Iran, opening the doors for some sectors to do business in the Middle Eastern country.

A groundbreaking nuclear deal between Iran and the U.S., UK, France, Germany, China and Russia last week in Vienna got the seal of approval on Monday from the UN Security Council. The agreement prevents Iran from obtaining a nuclear weapon while being allowed to have nuclear energy.

Foreign Affairs Minister Stéphane Dion said his government though would remain vigilant and “maintain our suspicion of a regime…that must not return to [trying to obtain] nuclear weapons.”

The previous Conservative government of Stephen Harper cut diplomatic ties in 2012, describing Iran as a state sponsor of terrorism.

It may take awhile for the doors of trade to open but the action could translate well for some domestic industries. Economists say it’s hard to put an exact dollar number on the size of the Iranian market but it’s worth billions.

Iran is the second-largest economy in the MENA (Middle East and North Africa) region after Saudi Arabia, according to the World Bank.

As western nations imposed sanctions, Iran turned to China and India for many goods including gold, wheat, aluminum and steel.

However, Canada has lagged in joining other countries that have already lifted sanctions — including Britain and other European nations.

In fact, Italy’s Saipem, an oil-engineering firm, already has tens of billions in Iranian contracts.

Certain Canadian industries could still benefit from this. The Canadian Chamber of Commerce has pinpointed some sectors that have good possibilities of doing work in Iran:

1. Aerospace: With business increasing in all areas, there will be much more travel around and in and out of the country.

Dion indicated the biggest benefactor could be Quebec’s Bombardier, which competes with France’s Airbus — a company that recently snagged a major contract in Iran last weekend for 160 European planes.

“If Airbus is able to do it, why [will] Bombardier not be able to do it?” the minister said in a recent exchange with media on Parliament Hill.

2. Oil and gas equipment: This is a specialty considering Alberta’s massive oil and gas industry. Canada is a world leader in getting these resources out of the ground in the most cost-efficient way. There would be a need for expertise as well as things such as drills, pumps and tubing. Much of this stuff was developed in Canada.

And, despite the recent fall in oil prices, Iranian President Hassan Rouhani recently announced he wanted to export 30 per cent of the crude oil it produces.

3. Engineering and construction: Iran has 80 million people whose lives will be undergoing an immense change over the next few years and that translates to a need for more hospitals, schools and public buildings. Some Canadian companies are already entrenched in the Middle East and could easily start doing business in Iran.

4. Mining exploration: Canada’s extensive experience with tapping its natural resources would be a good fit here. Iran is one of the top mineral-rich countries in the world with huge deposits of iron ore, gypsum, copper, coal and zinc.

5. Automotive parts: There will be increasing demand for many goods as trade brings more prosperity to Iranians and cars will be one of the bigger consumer purchases. Canadian companies manufacture many parts for automakers elsewhere.