Canada – Solid Reasons to Invest


           Think Creative.
       Think Competitive.
       Think Bottom Line.
       T...
Canada – Solid Reasons to Invest




                  Table of
                 Contents                            Page
...
Canada – Solid Reasons to Invest


     I Excellent Economic
             Fundamentals




                               ...
Canada has a Relatively Strong Economy
     Despite the Global Slowdown
                         Consensus Economics
Accor...
Other Forecasts also Highlight Canada’s
       Relatively Strong Economy
                                             OECD...
Canada also has Superior Employment
Growth…
Strong economic growth and rising demand for Canadian commodities over the las...
…a Sound Fiscal Advantage
Canada has enjoyed eleven consecutive annual federal budget surpluses ending in
2007-08; it has ...
…Leading Most Other G-7 Countries
Canada was the only G7 country to post a surplus in 2008. Despite being in
an overall de...
…a Low Inflation Rate Regime…
A low inflation environment provides business certainty for investors. Canada’s
targeted inf...
….Low Interest Rates
    Canada’s solid fiscal situation and low inflation has led to lower interest rates.
    The sharp ...
…and Great Potential for Future Economic
Prosperity
 According the Prosperity Potential Index*, Canada ranks 1st in the G7...
Canada – Solid Reasons to Invest


    II A Cost-Competitive
      Business Environment




                              ...
Canada’s Positive Business Climate…
 Canada understands the importance of its business community and has created an
 envir...
…is a Safe Haven for Business Investment…
According to Dun & Bradstreet’s Global Risk Indicator (GRI)*, Canada is consider...
…Involving Relatively Few Steps in
Establishing a Business…
Regulations pertaining to the creation of new businesses are c...
…and Relatively Less Time

Canada ranks first among the G7 for the fewest number of days required for
establishing a new b...
Canada also has Low Business Costs…
For the seventh consecutive time, KPMG’s Competitive Alternatives study finds Canada
l...
…and Offers an Overall Tax Advantage for
 Firms to Expand…
As a result of corporate income tax reductions introduced by th...
…with Quality R&D as its Major Benefit
                                                                                   ...
Canada Offers Competitive and Affordable
Business Telephone Charges…
Canada’s business telephone charges are relatively lo...
…and Low Residential Telephone Charges
Canada has the lowest residential telephone charges among the G7 and
OECD countries...
Canada has Sound Financial Institutions…
With the world in the midst of the current financial crisis, investors can take c...
…Easy Access to Capital…
Canada was able to weather the storm as world credit markets collapsed in 2008 due
to the stabili...
… and Stands Among Leaders in IT
  Industry Competitiveness
Canada ranks second behind the U.S. among the G7 and fourth in...
Canada – Solid Reasons to Invest


          III A Dynamic
              Workforce




                                   ...
Canada has one of the World’s Best-
Educated Workforces…
The overall skill level of Canada’s workforce ranks high among co...
…is a World Leader in Youth Academic
Performance…
Canadian schoolchildren ranked second in the world in the OECD Program f...
…and Manufacturing Sector Innovative
Performance
  Canada ranked 3rd in the G7 and 14th in a 110-country study measuring
 ...
Canada has Superior Management Training…
Canada ranks first in the G7 and second in a 133-country study of locally availab...
… the Highest Concentration of
Entrepreneurs…
From a global standpoint, Canada has the highest concentration of entreprene...
…PC and Internet Users…
Canada has a technology savvy population and workforce. It is second to the
U.S. among the G7 in t...
…and a Readily Available Army of Qualified
Engineers…
   Canada leads the G7 in terms of the availability of qualified eng...
Canada – Solid Reasons to Invest


             IV A Solid
           Infrastructure




                                 ...
Canada’s Highly Globalized Infrastructure….
Due to its rapidly growing prominence as an outsourcing market of choice, Cana...
….is Driven by a Dynamic Two-Way
   Investment Process
Over the past decade, Canada has witnessed a substantial growth in ...
The United States is
Canada’s Largest Source of FDI…
In 2008, the U.S. share of foreign direct investment (FDI) in Canada ...
…and Companies from Other Countries are
 also Increasing their Investments in Canada
From 2000-2008, EU countries increase...
Canada Welcomes Foreign Investment in
Various Industries
  Increasingly more investment goes toward industries such as man...
Canada – Solid Reasons to Invest


         V   Easy Access
              to Markets




                                 ...
Canada Offers Efficient Flows of Goods
 Across Borders…
Canada leads the G7 and ranks 6th among 121 countries in terms of ...
…a Streamlined Trans-Border
 Transportation System…
The North American market is serviced through a well-integrated transp...
…and Direct Access to the NAFTA Market

                                                                                  ...
Canada has Efficient Transport Linkages
Tying North America with Asia




  A reliable and efficient transportation system...
Canada – Solid Reasons to Invest


         VI An Excellent
            Place to Live




                                ...
Canada is a Desirable Location to Live,
Work, Study and Invest…
Canada ranks first in a 60-country study that measures the...
… and has the Best Overall Quality of
Life Among Countries…
Canada has the best overall quality of life among the G7.



 ...
…with Exceptional Quality of Life in
          Cities….
              According to a recent annual quality-of-life ranking...
Think!0310  Eng
Think!0310  Eng
Think!0310  Eng
Think!0310  Eng
Think!0310  Eng
Think!0310  Eng
Think!0310  Eng
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Think!0310 Eng

  1. 1. Canada – Solid Reasons to Invest Think Creative. Think Competitive. Think Bottom Line. Think Canada. March 2010 1
  2. 2. Canada – Solid Reasons to Invest Table of Contents Page I Excellent Economic Fundamentals 3 II A Cost-Competitive Business Environment 12 III A Dynamic Workforce 25 IV A Solid Infrastructure 33 V Easy Access to Markets 39 VI An Excellent Place to Live 44 2
  3. 3. Canada – Solid Reasons to Invest I Excellent Economic Fundamentals 3
  4. 4. Canada has a Relatively Strong Economy Despite the Global Slowdown Consensus Economics According to Consensus Economics, Canada has been a top performer among the G7 in GDP growth over the 2006-09 period and is expected to remain so through 2010-11. Real GDP Growth and Projections (%) 4.0 3.1 3.1 2010-11 3.0 1.9 1.8 2.0 1.7 1.5 % 1.0 1.0 0.8 0.7 0.7 0.5 0.3 0.0 2006-09 -0.6 -0.5 -1.0 Italy n any ada ce U.S. U.K. Japa Fran Germ Can Source: Consensus Forecasts, March 2010, Consensus Economics Inc. 4
  5. 5. Other Forecasts also Highlight Canada’s Relatively Strong Economy OECD Similarly, recent OECD statistics rank Canada as a top performer among G7 countries in terms of GDP growth during the 2006-09 period and one of the best during the 2010-11 forecast period. Real GDP Growth and Projections (%) 4.0 2010-11 3.0 2.7 2.5 1.9 2.0 1.7 1.6 1.7 1.3 % 1.0 0.8 0.7 0.7 0.4 0.5 0.0 2006-09 -0.4 -0.6 -1.0 Italy n any ada U.S. U.K. ce Japa Fran Germ Can Source: OECD Economic Outlook, No. 86, November 2009. 5
  6. 6. Canada also has Superior Employment Growth… Strong economic growth and rising demand for Canadian commodities over the last decade, combined with provincial and federal policies to improve the flexibility and adaptability to the changing workplace, have helped generate healthy gains in employment. Employment Growth (%) 1998-2008 Canada 2.0 France 1.4 Italy 1.2 U.S. 1.0 U.K. 1.0 Germany 0.6 Japan -0.2 -1 0 1 2 3 Source: U.S. Bureau of Labour Statistics, OECD Economic Outlook, No.86, November 2009 6
  7. 7. …a Sound Fiscal Advantage Canada has enjoyed eleven consecutive annual federal budget surpluses ending in 2007-08; it has undertaken one of the largest stimulus packages among developed economies in the current global economic downturn. In Budget 2010, Canada has chosen to run short deficits to stimulate its economy without putting long-term prosperity at risk and is expected to return to balanced budgets in the medium term. Over the coming years, Canada’s net debt-to-GDP ratio will remain the lowest in the G7 by a wide margin with a return to a surplus predicted shortly following the 2014- 15 fiscal year. Federal Government Budgetary Balance 2009-10* (% of GDP) 2010-11* 2011-12* 2012-13* 2013-14* 2014-15* 2008-09 0.0 -0.4 -0.1 -0.5 -1.0 -2.0 -1.6 -4.0 -3.1 -3.5 -4.2 -4.3 -4.2 -4.6 -6.0 -5.5 -8.0 -8.4 -10.0 Canada U.S. -10.9 -12.0 * Forecasts for both countries Source Canada: The Federal Budget, Finance Canada, March 4, 2010 Source United States: United States Congressional Budget Office, March 5, 2010. 7
  8. 8. …Leading Most Other G-7 Countries Canada was the only G7 country to post a surplus in 2008. Despite being in an overall deficit position during the 2009-2011 period, Canada will be in a far better position than most G7 member countries. Total Government Budget Balance 2008-11 (% of GDP) (National Accounts Basis) 2.0 0.1 0.0 0.0 a any nce an . . y U.K U. S nad Ital -2.0 Jap rm Fra Ca Ge -2.7 -2.7 -4.0 -3.4 -4.4 -4.8 -6.0 -5.3 -5.3 -6.5 -8.0 2008 -8.3 -8.3 -10.0 -10.4 -12.0 -12.8 -14.0 2009-11 Source: OECD Economic Outlook, No.86, November 2009 8
  9. 9. …a Low Inflation Rate Regime… A low inflation environment provides business certainty for investors. Canada’s targeted inflation rate range between 1% and 3% has been extended until 2011. Over the past five years, Canada has enjoyed relatively low inflation – averaging 2.3% compared to 3.2% for the U.S. and 2.1% for the G7. Inflation (Year-Over-Year % Change) 4.0 3.8 3.4 3.5 3.2 2.9 3.0 3.0 2.8 2.7 2.4 2.5 2.3 2.2 2.1 1.9 1.9 1.9 2.0 1.9 1.9 2.0 1.8 1.5 1.0 0.5 0.0 2003 2004 2005 2006 2007 2008 Canada U.S. G-7 Source: OECD Economic Outlook, No. 86, November 2009 9
  10. 10. ….Low Interest Rates Canada’s solid fiscal situation and low inflation has led to lower interest rates. The sharp decline in interest rates in both Canada and the U.S. in early 2009 were a consequence of the global economic downturn. Rates in the U.S. were lowered more than in Canada because of the greater severity of the slump in the U.S. economy. Daily Yields (%) Long-Term Bond Yields (%) 4.0 5.5 U.S. U.S. 5.0 3.8 4.5 3.6 4.0 3.5 3.4 Canada 3.0 3.2 2.5 Canada 2.0 3.0 9 09 9 09 1 0 10 10 0 0 10 1.5 v-0 o v- ec-0 e c- a n- an- an- eb -1 eb -1 ar- No N D D J J J F F M 6- 20 - 4- 18 - 1- 15 - 29 - 12- 26 - 12 - 05 06 07 08 09 10 n- n- n- n- n- n- Ja Ja Ja Ja Ja Ja Source Canada: Government of Canada 10-Year Bond: March 12, 2010 Source U.S.: U.S. Treasury, Constant Maturity 10-Year Bond: March 12, 2010 10
  11. 11. …and Great Potential for Future Economic Prosperity According the Prosperity Potential Index*, Canada ranks 1st in the G7 and 6th among 30 developed countries in terms of the likelihood for economic prosperity in the year 2020. Prosperity Potential Index - Ranking of Top Ten Countries 1st 2nd 3rd 4th 5th Rank 6th 7th 8th 9th 10th ds nd d d rg ay k en nd da lan ar lan ou lan ala rw na nla ed nm Ice er mb No Sw Ca er Ze Fi itz De th xe Sw w Ne Lu Ne * The Prosperity Potential Index measures the likelihood of economic prosperity in the year 2020 for 30 developed countries. The ranking is based on data from the OECD on areas that spark future economic development: demographics, trade, energy, technology and education. Source: Canadian Business Magazine, October 26, 2009 11
  12. 12. Canada – Solid Reasons to Invest II A Cost-Competitive Business Environment 12
  13. 13. Canada’s Positive Business Climate… Canada understands the importance of its business community and has created an environment to encourage its success. Canada is the best place for doing business among the G7 over the next five years according to the Economist Intelligence Unit and it ranked fifth overall out of 82 countries in the Economist Intelligence Unit’s global business rankings for the forecast period (2010-14), down slightly from third from the historical period (2005- 2009). The country also ranks well for its infrastructure, market opportunities, low taxes, and foreign trade and exchange controls. Business Environment of Top Ten Countries, Rank for Forecast Period 2010-2014 1st 2nd 3rd 4th 5th Rank 6th 7th 8th 9th 10th nd d k ay e ng a nd en da lan ar ali or ala rw Ko na nla ed nm ap str er No Sw Ca Ze Fi ng ng Au itz De Si Sw Ho w Ne Source: The Economist Intelligence Unit, March 2010 13
  14. 14. …is a Safe Haven for Business Investment… According to Dun & Bradstreet’s Global Risk Indicator (GRI)*, Canada is considered one of the world’s safest countries to invest, due to the relatively mild slowdown experienced as a result of the global credit crisis. Despite being earmarked as having a deteriorating outlook, Canada ranks 1st in the G7 and 2nd among the 131 countries evaluated in the GRI study. Highest Ranked Countries in Terms of the Global Risk Indicator* 1st 2nd 3rd 4th 5th Rank 6th 7th 8th 9th 10th ali a ad a ay nd tri a an d nc e an y rg ds str rw rla us inl ou an an No tze A Fra rm mb er l Au C wi F Ge xe th S Lu Ne •The Global Risk Indicator (GRI) assesses economic, commercial, external and political risk to provide risk ratings for 131 countries worldwide. •Source: Dun & Bradstreet, August 2009 14
  15. 15. …Involving Relatively Few Steps in Establishing a Business… Regulations pertaining to the creation of new businesses are considerably more flexible in Canada than those in the rest of the G7. Canada ranks first among the G7 and OECD countries for the lowest number of procedures required to establish a new business. Number of Procedures* 10 9 9 8 8 7 5.7 6 6 6 6 5 5 4 3 2 1 1 0 Canada France OECD U.S. Italy U.K. Japan Germany Average Source: Doing Business in 2010 - The World Bank Group, 2009 * A "procedure" is defined as any interaction of the company founder with external parties (government agencies, lawyers, auditors, notaries, etc). Interactions between company founders or company officers and employees are not considered as separate procedures. For example, an inauguration meeting where shareholders elect the directors and secretary of the company is not considered a procedure, as there are no outside parties involved. 15
  16. 16. …and Relatively Less Time Canada ranks first among the G7 for the fewest number of days required for establishing a new business. Duration (days) 25 23 20 18 15 13 13 10 10 7 6 5 5 0 Canada U.S. France Italy U.K. OECD Germany Japan Average Source: Doing Business in 2010- The World Bank Group, 2009 16
  17. 17. Canada also has Low Business Costs… For the seventh consecutive time, KPMG’s Competitive Alternatives study finds Canada leads the G7 with the lowest business costs. Canada is the lowest-cost G7 country in 11 of the 17 industries analyzed by KPMG’s Competitive Alternatives 2008 report: aerospace, agri-food, chemicals, medical devices, pharmaceuticals, precision manufacturing, telecommunications, biotechnology, product testing, software design and Web and multimedia. Percentage Cost Advantage (Disadvantage) Relative to the United States 2 0.6 0.0 0 a any nce an . . y U.K U.S -2 nad Ital Jap rm Fra Ca -4 Ge -3.6 -6 -8 -7.1 -7.9 -10 -12 -14 -14.3 -16 -18 -16.8 Source: KPMG Competitive Alternatives 2008 17
  18. 18. …and Offers an Overall Tax Advantage for Firms to Expand… As a result of corporate income tax reductions introduced by the Government since 2006, Canada will have the lowest statutory corporate tax rate in the G7 by 2012. Canada is on track to having the lowest overall tax rate on new business investment (marginal effective tax rate (METR*)) in the G7 in 2010. International Comparison of Statutory General Corporate Tax Rates in 2012 45 39.5 39.1 40 34.4 35 30.2 30 28.0 27.5 % 25.0 25 20 15 10 Japan U.S. France Germany U.K. Italy Canada Source: The Federal Budget, Finance Canada, March 4, 2010 and the OECD Tax Database. * METR takes into account federal and provincial statutory corporate income tax rates, deductions and credits available in the corporate tax system and other taxes paid by corporations, including provincial capital taxes and retail sales taxes on business inputs. 18
  19. 19. …with Quality R&D as its Major Benefit Relative Generosity of Canada offers one of the most R&D Tax Incentives* favorable tax treatments for R&D (Index: Canada = 100.0) among the G7. Canada provides a system of tax credits and accelerated tax France 123.9 deductions for a wide-variety of R&D expenditures. Canada 100.0 Eligible costs include: salaries, overhead, capital equipment, and materials. Japan 85.9 These tax-based incentives permit firms to significantly reduce R&D U.K. 84.0 costs through direct investment or sub-contracting in Canada. U.S. 80.6 Italy 77.0 Germany 76.1 50 60 70 80 90 100 110 120 130 Source: Warda, Jacek, Rating Measuring Canada's R&D Tax Incentives: May 22, 2009 Note: Relative generosity is determined by dividing the after tax cost of performing $1.00 of R&D by 1 less the corporate tax rate. Results are indexed to the relative generosity of Canada's system of tax-based support for R&D. The higher the ratio the more competitive the tax system. * Calculations based on large firms 19
  20. 20. Canada Offers Competitive and Affordable Business Telephone Charges… Canada’s business telephone charges are relatively low among G7 countries. Annual Business* Telephone Charges (US$ PPP**, Price per line) Germany 495 U.S. 550 Canada 723 France 811 Italy 896 Japan 990 U.K. 1243 0 200 400 600 800 1000 1200 1400 * Business (small and medium-sized enterprises) basket of telephone charges include fixed access and 84,000 calls broken down according to distance, destination (fixed, mobile and international), time of day over a one-year period. **PPP = Purchasing Power Parity (equalization of purchasing power of different countries in their home countries for a given basket of goods) Source: OECD Communications Outlook 2009 20
  21. 21. …and Low Residential Telephone Charges Canada has the lowest residential telephone charges among the G7 and OECD countries. Annual Residential* Telephone Charges (US$ PPP) Canada 391 U.S. 579 U.K. 705 Germany 742 France 909 Italy 910 Japan 982 0 200 400 600 800 1000 1200 * High usage basket of residential telephone charges include fixed access and 2,400 calls broken down according to distance, destination (fixed, mobile and international), time of day over a one-year period. ** PPP = Purchasing Power Parity (equalization of purchasing power of different countries in their home countries for a given basket of goods) Source: OECD Communications Outlook 2009 21
  22. 22. Canada has Sound Financial Institutions… With the world in the midst of the current financial crisis, investors can take comfort in the fact that Canada has the soundest banking system in the G7. Five of the 50 safest banks are in Canada, according to a recent study: Royal Bank of Canada (10th), Toronto Dominion Bank (14th), Scotiabank (22nd), Bank of Montreal (31st) and CIBC (37th).** Soundness of Banks* World Rank 1st 2nd 3rd 4th 5th Rank 6th 7th 8th 9th 10th ile il bia nd a a da e ma ng az ali ri c or Ch ala na Ko mi na Br ap str Af Ca Na Ze Pa ng Au ng uth Si Ho w So Ne *Standing among 133 countries. Ranking based on the degree of soundness of financial institutions. Source: Global Competitiveness Report, 2009-2010 ** Standing among 500 world banks based on total assets and long-term credit ratings. Source: Global Finance Magazine , October 2009 22
  23. 23. …Easy Access to Capital… Canada was able to weather the storm as world credit markets collapsed in 2008 due to the stability of its equity markets and strength of its economic policy. In 2008, the Milken Institute ranked Canada 1st in its Capital Access Index. Capital Access Index (Maximum = 10) Top 10 Regions/Countries 2008 8 7.90 7.82 7.76 7.70 7.64 7.56 7.5 7.28 7.27 7.26 7.21 7 ng ds e d a ay da d K. S. lan or ali an lan Ko rw U. U. na ap str nl er No Ca er ng ng Fi Au itz th Si Ho Sw Ne *Standing among 117 countries. Milken Institute, July 2009 23
  24. 24. … and Stands Among Leaders in IT Industry Competitiveness Canada ranks second behind the U.S. among the G7 and fourth in a 66-country review of the countries best suited to provide an optimally competitive environment for information technology (IT) firms. IT Industry Competitiveness Index* World Rank 1st 2nd 3rd 4th 5th Rank 6th 7th 8th 9th 10th S. d n a ds K. lia ar k re ay U. lan de ad an U. stra po rw Fi n e Ca n er l nm a No Sw th Au De ing Ne S *Standing among 66 countries. Index based on the following six categories of quantitative and qualitative indicators: overall business environment; IT infrastructure; human capital; legal environment; R&D environment; and support for IT industry development. Source: Economist Intelligence Unit, September 2009. 24
  25. 25. Canada – Solid Reasons to Invest III A Dynamic Workforce 25
  26. 26. Canada has one of the World’s Best- Educated Workforces… The overall skill level of Canada’s workforce ranks high among competing countries. Canada has the highest percentage of individuals achieving at least college or university education, among OECD member countries. Higher Education Achievement Among All Countries 60 56.7 55.0 54.0 55 53.0 51.2 50.0 50 44.0 45 % 42.0 42.0 42.0 41.0 41.0 40.5 40 35 30 k e ng a nd ce De y um da uth n d an l Ne srae a ar re or pa lan rw a la an Ko na iw nm ap lgi Ko Ja Ire Ta No Fr I Ca Be Ze ng ng Si Ho w So Source: IMD, World Competitiveness Yearbook 2009 26
  27. 27. …is a World Leader in Youth Academic Performance… Canadian schoolchildren ranked second in the world in the OECD Program for International Student Assessment (PISA). The PISA survey is conducted annually among 400,000 school pupils across 57 countries, and evaluates the capacity of 15-year old schoolchildren to understand and solve academic problems. It also provides insights into the reading ability and mathematical knowledge of schoolchildren. PISA Score (points) 600 553 550 529 521 514 510 509 505 504 502 501 500 500 450 s d k d y d en e da um K. nd an ar la n lan lan ag U. na ed nm lg i rla rm er I re Fin er Sw Ca Be Av t he Ge De itz Sw CD Ne OE Source: OECD 2007 27
  28. 28. …and Manufacturing Sector Innovative Performance Canada ranked 3rd in the G7 and 14th in a 110-country study measuring innovation performance in the manufacturing sector. Canada stood in the top tier, ranking ahead of traditionally strong innovators such as Britain (15th), Israel (16th), Germany (19th), France (20th) and Australia (22nd). International Innovation Index* World Rank 8th 9th 14th 15th 19th 20th Index 38th U.S. Japan Canada U.K. Germany France Italy *Standing among 110 countries. Index based on government support for innovation - through tax and education policies, and the quality of infrastructure; the performance of innovative companies, measured by factors such as high-tech exports, the amount of intellectual property generated and employment growth. Source: The Innovation Imperative in Manufacturing – How the United States Can Restore its Edge, Boston Consulting Group, March 2009 28
  29. 29. Canada has Superior Management Training… Canada ranks first in the G7 and second in a 133-country study of locally available management education in first-class business schools. (see chart below) In addition, five Canadian schools of management are ranked among the top 100 in the world according to the Financial Times (UK) Global MBA rankings for 2009. University of Toronto (Rotman) 47th; University of Western Ontario (Ivey) 47th; York University in Toronto (Schulich) 49th; University of British Columbia (Sauder) 71st ; and University of Alberta 77th. Management Education* World Rank 1st 2nd 3rd 4th 5th Rank 6th 7th 8th 9th 10th nd da ce S. re in um ata r ar k lan d rla na an U. po pa lgi m tze Ca Fr ing a S Be Q n Ice wi S De S *Standing among 133 countries. Index based on the quality of Management education in first-class business schools. •Source: Global Competitiveness Report, 2009-2010 29
  30. 30. … the Highest Concentration of Entrepreneurs… From a global standpoint, Canada has the highest concentration of entrepreneurs within its working population. Businesses, including start-ups, develop new products and services and get them to market and conceive new types of organization and production and put them into practice. New companies also serve to remind existing firms of the need to adapt and continue innovating. Number of Entrepreneurs as a Percentage of the Working Population 20 15.9 15 11.5 11.2 11.1 11.1 10.1 9.7 10 8.6 8.5 6.9 5 0 s d k d y en da um K. S. nd an ar lan lan U. U. na ed nm lgi rla rm Ir e Fin Sw Ca Be the Ge De Ne Source: Statistics Netherlands 2008 30
  31. 31. …PC and Internet Users… Canada has a technology savvy population and workforce. It is second to the U.S. among the G7 in terms of personal computers and second to Japan among the G7 with respect to Internet users per capita. Personal Computers Internet Users Per 1,000 Inhabitants Per 1,000 Inhabitants 900 869 800 774 773 771 850 819 750 736 800 771 750 691 700 750 701 643 642 700 673 650 650 612 600 600 550 550 500 500 ly ly Ca .S. Ge .K. S. Ge .K. Fr y Fr y ce n ce Ca n da da an an Ita Ita pa pa U. U U U an an na na rm rm Ja Ja Source: IMD, World Competitiveness Yearbook 2009 31
  32. 32. …and a Readily Available Army of Qualified Engineers… Canada leads the G7 in terms of the availability of qualified engineers in its labour market. Qualified Engineers Availability Index* 8.0 7.5 7.13 7.01 7.0 6.55 6.5 6.37 6.16 Index 6.0 5.85 5.5 5.30 5.0 4.5 4.0 Canada France Japan U.S. Germany Italy U.K. Source: IMD, * Rank among 57 economies considered in the World Competitiveness Yearbook 2009. 32
  33. 33. Canada – Solid Reasons to Invest IV A Solid Infrastructure 33
  34. 34. Canada’s Highly Globalized Infrastructure…. Due to its rapidly growing prominence as an outsourcing market of choice, Canada ranked second in the G7 and eighth among 72 countries profiled in the recent A.T. Kearney/Foreign Policy Magazine Globalization Index* which measures economic integration, personal contact, technological connectivity and political engagement. In technological connectivity, one of the four components of the index, Canada’s ranking rose from sixth place in 1999 to second in 2006. It maintained this position in 2007. Globalization Index Rankings, 2007* 7th 8th 12th 22nd 25th 28th Index 34th U.S. Canada U.K. Germany France Japan Italy Source: A.T. Kearney/Foreign Policy Magazine, 2007 * Standing based on 12 characteristics under the headings of trade, FDI, telephone, travel, remittances & personal transfers, internet users, internet hosts, secure servers, international organizations, UN peacekeeping, treaties and government transfers. 34
  35. 35. ….is Driven by a Dynamic Two-Way Investment Process Over the past decade, Canada has witnessed a substantial growth in both inward and outward FDI reflecting its strong connection to global supply chains. Canada’s inward FDI stock reached C$505 billion in 2008, a 2 ½ -fold increase from C$219 billion in 1998. As for Canada’s outbound FDI, the expansion of Canadian direct investment abroad (CDIA) has been equally spectacular, rising from C$263 billion in 1998 to C$637 billion in 2008, a 2 ½ -fold increase. Canada's Inward and Outward FDI Stock ($Billion) 600 CDIA 500 FDI 400 300 200 100 0 19 19 20 20 20 20 20 20 20 20 20 98 99 00 01 02 03 04 05 06 07 08 Source: Statistics Canada, April 8, 2009 35
  36. 36. The United States is Canada’s Largest Source of FDI… In 2008, the U.S. share of foreign direct investment (FDI) in Canada stood at 58.2%, demonstrating its confidence in Canada’s business climate. Geographic Distribution of Inward FDI Stock in Canada 2008 United Kingdom 10.8% United States 58.2% Netherlands 6.7% France 3.7% Switzerland 3.0% Japan 2.6% Others 15.1% Source: Statistics Canada, April 8, 2009 36
  37. 37. …and Companies from Other Countries are also Increasing their Investments in Canada From 2000-2008, EU countries increased their FDI in Canada by C$37 billion and other non-EU/US countries increased their investment in Canada by C$49 billion, demonstrating their confidence as well in Canada. Foreign direct investment in Canada by geographic area of origin 1990-2008 600 Billion $Cdn 500 Others 400 300 US 200 100 EU 0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 Source: Statistics Canada, May 4, 2009 37
  38. 38. Canada Welcomes Foreign Investment in Various Industries Increasingly more investment goes toward industries such as manufacturing, mining and oil and gas extraction and toward the management of companies and enterprises. Since 2000, significant growth in terms of FDI has occurred in the mining and oil and gas extraction industry and the utilities industry. Average Annual Growth Rates of Foreign Direct Investment by Industry (%) 2000-2008* Mining and oil and gas extraction 17.9 19.3 Utilities 0.7 15.0 11.6 Management of companies and enterprises 13.3 All other industries 13.2 2.1 2008 Distribution (%) Retail trade 12.8 4.0 Construction 9.4 0.7 Accommodation and food services 8.8 0.6 Transportation and warehousing 8.0 0.9 Finance and insurance 11.5 6.4 Professional, scientific and technical services 5.5 2.1 OVERALL 5.0 100.0 Wholesale trade 4.7 6.6 Information and cultural industries 1.7 4.1 Agriculture,forestry, fishing and hunting 2.0 0.2 Manufacturing 33.3 1.8 0.9 Real estate and rental and leasing -4.0 3.8 Information and communication technologies -5.9 -20 -10 0 10 20 30 Source: Statistics Canada, May 4, 2009 * North American Industry Classification System (NAICS) 38
  39. 39. Canada – Solid Reasons to Invest V Easy Access to Markets 39
  40. 40. Canada Offers Efficient Flows of Goods Across Borders… Canada leads the G7 and ranks 6th among 121 countries in terms of the enabling trade index, which measures the effectiveness of the combined factors of market access, border administration, transport & communications infrastructure, and business environment towards the efficient flow of goods over borders and to their final destination. Enabling Trade Index 5.97 6.0 5.8 5.57 5.6 5.44 5.44 5.44 Index 5.4 5.35 5.33 5.33 5.29 5.27 5.27 5.24 5.2 5.12 5.07 5.02 5.0 4.8 Au r g itz g Sw k Ho pore y ay Ze s Ge nd a De d t h ia Ca n da d S Lu man d ar Sw Kon lan ali e lan U. Ne str ou Ne rlan rw a la na ed nm str er Au Fin mb a No r ng ng e xe Si w Global Enabling Trade Report 2009, World Economic Forum. 40
  41. 41. …a Streamlined Trans-Border Transportation System… The North American market is serviced through a well-integrated transportation system, which is among the world’s best. Automated permit ports, transponder identification systems and joint processing centres are being tested and deployed for easy movement of goods Bottom line – the border system is one of the world’s most efficient. Annual Transborder Crossings Total Number of Trucks and Canada-U.S. Air Passengers (Two-way movements) 25 Air 20 20.8 million 15 Millions Truck 11.5 million 10 5 0 1984 1988 1992 1996 2000 2004 2008* Source: Statistics Canada and Transport Canada, 2008 (* Preliminary data for 2008 air passengers) 41
  42. 42. …and Direct Access to the NAFTA Market Canadian-based businesses have access to one market of 452 million consumers 500 km with a combined GDP of over St. John's US$16.4 trillion.* Edmonton 1000 km Saskatoon Québec Many Canadian Charlottetown production hubs are Calgary Regina Winnipeg Fredericton Victoria Vancouver Halifax actually closer to Ottawa Montréal Seattle U.S. markets than Milwaukee Toronto Boston American Windsor Chicago Detroit New York Cleveland Philadelphia production sites — Pittsburgh Baltimore of Canada’s 20 Washington St. Louis largest cities, 17 are San Francisco Denver within an hour and half drive of the U.S. Atlanta Los Angeles Direct air service between major cities Houston in Canada and the Miami U.S. has nearly doubled in the last six years. * Source: CIA World Factbook, March 2010 Mexico City 42
  43. 43. Canada has Efficient Transport Linkages Tying North America with Asia A reliable and efficient transportation system is key to effective participation in global supply chains. In October 2006, Canada has launched the Asia-Pacific Gateway and Corridor Initiative, an unprecedented alignment of public and private sector investments to strengthen Canada’s position as a fast, efficient and secure gateway between North America and Asia. These investments will improve the flow of people, goods and services across Canadian rail, roads, bridges and through our ports and airports. 43
  44. 44. Canada – Solid Reasons to Invest VI An Excellent Place to Live 44
  45. 45. Canada is a Desirable Location to Live, Work, Study and Invest… Canada ranks first in a 60-country study that measures the potential of a country as an ideal place to live, work, study and invest. Location Desirability Index* 65 64 Location Desirability Score 63 62.3 62 61.1 61.1 61.0 60.7 60.5 61 60 59.6 59.0 59 57.7 58 57.1 57 56 55 ly a y d en n da ce . . K S an ali lan pa Ita U. U. an na ed str rm Ja er Fr Sw Ca Au Ge itz Sw •Index ranging from 0-100 based on five components of a country’s potential for immigration and investment: (a) Willingness to live and work for a substantial period in the country; (b) Quality of life; (c) Good place to study for educational qualifications; (d) The country has businesses I’d like to invest in; (e) Equal opportunity. Source: Red Hot Locations, London U.K. 2009 45
  46. 46. … and has the Best Overall Quality of Life Among Countries… Canada has the best overall quality of life among the G7. Quality of Life Index* 10.0 9.5 9.21 9.05 9.0 8.5 8.26 8.18 Index 8.0 7.68 7.5 7.05 7.0 6.70 6.5 6.0 Canada Germany France U.S. U.K. Japan Italy Source: IMD, * Rank among 57 economies considered in the World Competitiveness Yearbook 2009. 46
  47. 47. …with Exceptional Quality of Life in Cities…. According to a recent annual quality-of-life ranking of 215 world cities, four Canadian cities ranked among the top 25. Overall Quality of Life Ranking (Top 25 Cities) (Index: New York City = 100.0 ) 110 108.6 108.0 107.9 107.4 107.4 107.2 107.0 106.8 106.5 106.3 106.2 105.9 105.7 105.4 105.3 106 105.0 105.0 104.8 104.6 104.5 104.3 104.2 104.1 103.7 103.6 102 98 r f t g l g na ich eva ve nd dor ich fur rn ey en on am els to wa erlin urne our holm rth ea ur lo lin ien Zur en cou ckla sel un ank Be ydn hag lingt terd uss oron tta B lbo mb k Pe ontr emb Os Dub V G an Au Dus M Fr S en el ms Br T O e oc M ur V op W A e M Lux St N C Source: Mercer Human Resources Consulting: April 2009 47

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