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Canada competitiveness
 

Canada competitiveness

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This slide deck with illustrates issues impacting canada's competitiveness. Additional work is required to dig deeper into the different issues, i.e trade, labor rates, power, taxation, etc

This slide deck with illustrates issues impacting canada's competitiveness. Additional work is required to dig deeper into the different issues, i.e trade, labor rates, power, taxation, etc

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  • Canada’s exports are projected to be 477B for 2012 or 4.6% increase over 2011. The United States accounts for 73% of all exports. Imports are projected to be $470B for 2012 or 5.3% increase over 2011. The government of Canada has been working hard on diversifying their trade with BRIC countries, especially China and India. Source: Stats Canada
  • I am focusing on power generation, taxes, R&D, labor rates. I will also include some information automotive, commodities as well as construction starts which have impact on the canadian market
  • On average 60% of Canada’s power need comes from hydro power. Hydro projects have been solid in British Columbia and Quebec. Ontario still lags behind on hydro-electric projects Renewable Energy is only 2.5% of the total power with wind/solar bulk of the power. There are huge issues with wind/solar, especially with storage/backup power generation Source: International Energy Agency
  • Canada is #9 in the world when it comes R&D spending. Canadian companies spend 23.8B on R&D or about 1.8% of GDP. Countries like USA/Japan/Germany invest greater then 2.5% of GDP on R&D Source – Batelle Corp
  • RIM spent 1B on R&D in 2011. The top 100 includes telecom, Information Technology, Drug Discovery, etc. There is only few companies from the oil sands (syncrude, suncor, Imperial oil) More emphasis need on the small to medium size companies via public-private partnerships. Ontario for examples is 2 nd in North America for Green Technology Investment
  • In Canada, labour productivity levels and their growth vary tremendously between industries. For example, Figure 9 reveals that private sector labour productivity levels in service industries were only 89 percent of the average for the entire economy. The sectors of mining and oil and gas extraction and utilities were sectors with at least three times the private sector labour productivity levels of the overall economy. Productivity in these sectors has been decreasing to an average of -4.5 percent and -1.7 percent respectively in the 2003 to 2008 period. A decrease of -2.3 percent in labour productivity was also registered in the construction sector. In contrast, above average labour productivity growth was experienced in most service industries as well as in the sector of agriculture, forestry, fishing and hunting and the manufacturing sector over the 2003 to 2008 period. Significant labour productivity growth was also experienced in the wholesale and retail trade sectors, both of which increased by 3.4 percent per year in the 2003 to 2008 period.
  • Canadian Government plans to spend $33B over 7 years on infrastructure or about 4.7B/year Source: http://www.infrastructure.gc.ca/prog/bcp-pcc-eng.html
  • Source: http://www.kpmg.com/Ca/en/services/Tax/Focus-on-Tax/Documents/competitive-alternatives-focus-on-tax-english-v2.pdf
  • Source: http://www.kpmg.com/Ca/en/services/Tax/Focus-on-Tax/Documents/competitive-alternatives-focus-on-tax-english-v2.pdf
  • 1. Key commodities prices Source: www.BMO.com
  • Those awaiting a Canadian capital spending surge to lead the economy and unleash a burst of productivity will be sorely disappointed today. Total capital spending is expected to rise just 3.3% this year (4.0% excluding housing), according to StatsCan’s annual survey of Public and Private Investment Intentions. That’s actually slower than our call of a 5% rise in nominal GDP, which means that investment spending is slated to decline as a share of the economy—not quite what the policy doctors ordered. There are some caveats, which leave cause for hope. First, last year’s actual rise in capital spending of 10.3% (8.4% ex. housing), turned out to be far above the initial estimates of a 4.4% rise. Perhaps we’ll see a repeat performance this year. As well, the expected rise doesn’t adjust for price changes. With the Canadian dollar on a tear, prices for machinery and equipment are likely to fall further this year (they were down 3.2% y/y in 2010 Q3). Finally, the headline result is undercut by slower public investment, and private sector spending alone is expected to be a half point higher. Thus, real business investment should be considerably stronger than the headline intentions. We are calling for a rise of nearly 10% this year, but will need all those factors to kick in to hit that target. With the wave of infrastructure projects beginning to wind down, public‐sector investment is expected to rise just 1.6% after a massive 17.5% in 2010. The surprise is that the number is still positive in 2011. Private‐sector investment is expected to rise 3.8%, still leaving it 6% below the 2008 peak. Double‐digit gains in manufacturing, transportation and resources will lead. At the regional level, Atlantic Canada will be tops, entirely due to another big rise in Newfoundland, while Saskatchewan will lead the west. Ontario will lag. Alberta may be the ripest for upward revisions given recent oil price strength. The Bottom Line: The private sector is planning to take the baton from the public sector on the capital spending front this year, but the pace looks more like a 20 km walk than a 100 m dash. Disappointing. Source: www.BMO.com
  • The *Free Cash Margin Index is free cash flow measured as a percentage of revenue for the trailing twelve month period Measured as free cash flow divided by revenue, free cash margin is a cash flow profit margin. It indicates what percent of revenue is left for shareholders in the form of free and discretionary cash flow. If the company sells its products or services for a dollar, free cash margin tells how many cents the shareholders can take home without reducing the company’s ability to generate more. Thus, as the report looks at cash flow trends and their underlying drivers, its particular interest is on how those factors impact free cash margin. For more detail, the industry spreadsheets that identify trends in free cash margin and its underlying drivers for 44 separate industries for all available reporting periods through the second quarter of 2012 have been posted. The spreadsheets, which are updated quarterly, can be found on the Lab’s website at www.mgt.gatech.edu/finlab. George Tech
  • The *Free Cash Margin Index is free cash flow measured as a percentage of revenue for the trailing twelve month period Measured as free cash flow divided by revenue, free cash margin is a cash flow profit margin. It indicates what percent of revenue is left for shareholders in the form of free and discretionary cash flow. If the company sells its products or services for a dollar, free cash margin tells how many cents the shareholders can take home without reducing the company’s ability to generate more. Thus, as the report looks at cash flow trends and their underlying drivers, its particular interest is on how those factors impact free cash margin. For more detail, the industry spreadsheets that identify trends in free cash margin and its underlying drivers for 44 separate industries for all available reporting periods through the second quarter of 2012 have been posted. The spreadsheets, which are updated quarterly, can be found on the Lab’s website at www.mgt.gatech.edu/finlab. George Tech
  • Canadian automotive production represents 16% of the total. Since 2007 there has been shift of production to Mexico. Mexico has ramped up production and now represents nearly 20% of the total. Labor rates/concessions are under fire in Canada due to high Canadian dollars. United States is on a push also to bring more jobs back to their country. Source: Ward Automotive
  • Source: SDTC
  • Canada housing starts are down 204K for 2012. The lower starts is due to changes in mortgage policies United States housing starts in October 2012 hit highest level in 2+ years. Source: www.bmo.com

Canada competitiveness Canada competitiveness Presentation Transcript

  • Canada Competitiveness By: Paul Young, CGA
  • Trade
  • Overiew• This slide deck will look at different factors that can impact on Canada’s competitiveness.
  • Power Generation
  • R&D
  • R&D
  • Canada Productivity
  • Canada Infrastructure
  • Tax Competitiveness
  • Labor Costs
  • Commodity Price
  • Canada Capital Spending
  • Cash Flow Analysis – Industry Analysis
  • Cash Flow Analysis – Industry Analysis
  • North American Automotive Production
  • Canada Green Technology
  • Housing Sector – Canada and USA