Think Canada May - June 2010 Edition

Canada – Solid Reasons to Invest

Think Creative. Think Competitive. Think Bottom Line.

Think Canada. May-June 2010

1

Canada – Solid Reasons to Invest

Table of Contents I II III IV V VI

Excellent Economic Fundamentals A Cost-Competitive Business Environment A Dynamic Workforce A Solid Infrastructure Easy Access to Markets An Excellent Place to Live

Page 3 12 25 33 39 44

2

Canada – Solid Reasons to Invest

I Excellent Economic Fundamentals

3

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

2010-11 3.2

3.2

3.0

2.5 1.8

1.8

2.0 %

1.5

1.0

0.8

1.0 0.7

0.6

0.5

0.3

0.0

2006-09

Japa

any Germ

Italy

Fran ce

U.K.

Can ada

U.S.

Source: Consensus Forecasts, June 2010, Consensus Economics Inc.

n

-0.6

-0.6

-1.0

4

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 the best during the 2010-11 forecast period.

Real GDP Growth and Projections (%) 2010-11

4.0

3.4

3.2

3.0

2.5 1.9

2.0

2.0

1.9

%

1.3

1.0

0.8

0.7 0.3

0.6

0.5

0.0

2006-09

Japa

any Germ

Italy

Fran ce

U.K.

Can ada

U.S.

Source: OECD Economic Outlook, No. 87, May 2010.

n

-0.5

-0.7

-1.0

5

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 (%) 1999-2009 Canada

1.6

Italy

1.0

France

0.9

U.K.

0.7

Germany

0.6

U.S.

0.4

Japan

-0.3

-1

0

1

2

Source: U.S. Bureau of Labour Statistics, OECD Economic Outlook, No.87, May 2010

6

…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 201415 fiscal year.

Federal Government Budgetary Balance

0.0 -0.4

-2.0

-1.6

-4.0

-0.1

-0.5

-1.0

2014-15*

2013-14*

2012-13*

2011-12*

2010-11*

2009-10*

2008-09

(% of GDP)

-3.1

-3.5

-4.2

-4.6

-6.0

-4.3

-4.2

-5.5

-8.0 -8.4

-10.0 -12.0

Canada

U.S.

-10.9

* 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

…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

-6.0 -8.0

-5.1

Jap an

U. S

.

Fra nce

Ital y -3.5

-2.7

Ge rm any

-4.0

Ca nad

-2.0

U.K .

0.0

a

0.0

-2.1

-3.3 -4.4

-4.9

-6.5 -7.4

2008

-7.7

-10.0 -12.0

-11.0

-10.2

-14.0 2009-11 Source: OECD Economic Outlook, No.87, May 2010 8

…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 1.8% compared to 2.6% for the U.S. and 1.8% for the G7.

Inflation (Year-Over-Year % Change)

4.5

3.8

4.0 3.4

3.5 3.0 1.9

2.2 1.8

1.9

2.0

3.0

2.9

2.7

2.5 2.0

3.2

1.9

2.1

2.4 1.9

1.5 1.0 0.3

0.3

0.5 0.0 -0.5 -1.0

2004

2005

2006 Canada

2007 U.S.

2008

-0.3

2009

G-7

Source: OECD Economic Outlook, No. 87, May 2010

9

….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.

Long-Term Bond Yields (%) 5.5

U.S.

5.0 4.5

4.0

U.S.

3.8 3.6

4.0

3.4

3.5 Canada

3.0

3.2

2.5

Canada

3.0

2.0 1.5 5 -0 n Ja

Daily Yields (%)

6 -0 n Ja

7 -0 n Ja

8 -0 n Ja

9 -0 n Ja

0 -1 n Ja

0 0 0 0 0 0 0 0 -10 b -10 ar-1 ar -1 r-1 pr-1 y-1 y-1 n-1 n- 1 b p a a u u e e -F 6 -F 2 -M 6 -M 9- A 3 -A 7- M 1-M 4-J 8 -J 2 2 1 1 2 1 2 2

Source Canada: Government of Canada 10-Year Bond: June 18, 2010 Source U.S.: U.S. Treasury, Constant Maturity 10-Year Bond: June 18, 2010

10

…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 Rank

5th 6th 7th 8th 9th

Ca na da De nm ar k Lu xe mb ou rg Ne w Ze ala nd Ne th er lan ds

Sw itz er lan d

Ice lan d

Fi nla nd

No rw ay

Sw ed en

10th

* 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

Canada – Solid Reasons to Invest

II A Cost-Competitive Business Environment

12

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 (20052009). 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 Rank

5th 6th 7th 8th 9th

Source: The Economist Intelligence Unit, June 2010

Sw ed en Ne th er lan ds

Ca na da De nm ar k Au str ali a Ne w Ze ala nd

Fi nla nd Ho ng Ko ng

Si ng ap or e Sw itz er lan d

10th

13

…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 Rank

5th 6th 7th 8th 9th 10th

lia tra s Au

da na a C

y d an wa l r r e No itz w S

ia str u A

nd nla i F

ce an r F

y g ds ur n an o a b rl rm he em t Ge x Ne Lu

•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

…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 8 7 6 5 4 3 2 1 0

9 8

5

5.7

6

6

6

OECD Average

U.S.

Italy

U.K.

1

Canada

France

Japan

Germany

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

…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 10

10 5

13

5

6

7

0 Canada

U.S.

France

Italy

U.K.

OECD Germany Average

Japan

Source: Doing Business in 2010- The World Bank Group, 2009

16

Canada also has Low Business Costs… For the eighth 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 14 of the 17 industries analyzed by KPMG’s Competitive Alternatives 2010 report: aerospace, agri-food, automotive, chemicals, electronics, medical devices, pharmaceuticals, precision manufacturing, telecommunications, back office/call centres, software design, web and multimedia, biotechnology and product testing.

Percentage Cost Advantage (Disadvantage) Relative to the United States 6

5.0

4 1.7

-4

Jap an

0.0

Ge rm any

Fra nce

U.K .

a Ca nad

-2

Ital y

0.0

0

U.S .

1.8

2

-2.6

-6 -8

-7.6

-10 Source: KPMG Competitive Alternatives 2010 17

…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 40

39.5

39.1 34.4

%

35

30.2

30

28.0

27.5

25

25.0

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

…with Quality R&D as its Major Benefit Relative Generosity of R&D Tax Incentives*

Canada offers one of the most favorable tax treatments for R&D among the G7. Canada provides a system of tax credits and accelerated tax deductions for a wide-variety of R&D expenditures. Eligible costs include: salaries, overhead, capital equipment, and materials. These tax-based incentives permit firms to significantly reduce R&D costs through direct investment or sub-contracting in Canada.

(Index: Canada = 100.0)

France

123.9

Canada Japan U.K. U.S.

100.0 85.9 84.0 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

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

…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

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. Six of the 50 safest banks are in Canada, according to a recent study: Royal Bank of Canada (10th), Toronto Dominion Bank (14th), Scotiabank (22nd), Caisse Centrale Desjardins (26th), Bank of Montreal (31st) and CIBC (37th).**

Soundness of Banks* World Rank

1st 2nd 3rd 4th Rank

5th 6th 7th 8th 9th

Br az il

bia Si ng ap or e Pa na ma

Na mi

a Af ri c

So uth

Ko ng

Ho ng

Ch ile

Ca na da Ne w Ze ala nd Au str ali a

10th

*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

…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 2009, the Milken Institute ranked Canada 1st in its Capital Access Index.

Capital Access Index (Maximum = 10) Top 10 Regions/Countries 2009 8.5 8.25 7.99

8

7.95

7.92

7.88 7.68 7.54

7.5

7.52

7.49

7.47

7 a ad n Ca

n Ho

g on K g

K. U. S

e or p a ing

S. U. Sw

d lan r e itz

S

n de e w

lia ts ra Au

ds lr an e th e N

nd a l Fin

*Standing among 122 countries. Milken Institute, April 2010

23

… 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 Rank

5th 6th 7th 8th 9th 10th

S. U.

nd a l n Fi

en d e Sw

da a n Ca

ds n a rl he t Ne

K. U.

lia a r st Au

k ar nm De

e or p a ng i S

y wa r No

*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

Canada – Solid Reasons to Invest

III A Dynamic Workforce

25

Canada has one of the World’s BestEducated Workforces… The overall skill level of Canada’s workforce ranks high among competing countries. Canada has the second highest percentage of individuals achieving at least college or university education, among OECD member countries.

Higher Education Achievement Among All Countries 60 55

45

56.0

55.0 54.0

53.0 47.0 44.0 43.0

42.0 41.2 41.0 41.0 41.0

40

40.0 40.0 40.0

35

ng So apo uth re Ko re Ca a na da Ja pa n T Ne aiw w a Ze n a la nd Ire lan No d rw ay I Ho srae ng l Ko Au n g str a B e lia lgi um Fr an De ce nm a Sw r k ed en US A

30

Si

%

50

58.7

Source: IMD, World Competitiveness Yearbook 2010 26

…is a World Leader in Youth Academic Performance… Canadian schoolchildren ranked third among the 30 OECD countries and fourth among all 57 countries surveyed 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) - Top 10 OECD Countries 600 553

550

542 529

524

521

520

517

514

510

509 496

500

Fin

lan So d ut h Ko re a Ca na da Ne w Ze ala nd Ne t he rla nd s Au str ali a Ja pa n Sw itz er lan d Be lgi um I re OE lan CD d Av er ag e

450

Source: OECD 2007

27

…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 20th

Index

19th

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

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

Rank

5th 6th 7th 8th 9th 10th

d lan r e itz w S

a ad n Ca

e nc a Fr

S. U.

e or p a ng i S

ain p S

um le gi B

tar a Q

k ar m n De

d le an Ic

*Standing among 133 countries. Index based on the quality of Management education in first-class business schools. •Source: Global Competitiveness Report, 2009-2010

29

… 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

10.1

9.7

8.6

8.5 6.9

5

Source: Statistics Netherlands 2008

Fin lan d Sw ed en De nm ar k

an y

Ge rm

U. S.

Be lgi um

Ir e lan d

U. K.

Ca na da Ne the rla nd s

0

30

…PC and Internet Users… Canada has a technology savvy population and workforce. It leads the G7 with respect to Internet users per capita and is second to the U.S. among the G7 in terms of personal computers per capita.

Internet Users Per 1,000 Inhabitants

Personal Computers Per 1,000 Inhabitants 950 899

810

800

861

850

811

800

750

794

805

797 769 733

751

750

700

710

700

667

650 600

689

689

650

ad a Ja pa n U. S. U Ge .K. rm an Fr y an ce Ita ly

U Ge .K. rm an Fr y an ce Ja pa n Ita ly

U Ca .S. na da

600 Ca n

900

850

Source: IMD, World Competitiveness Yearbook 2010 31

…and a Readily Available Army of Qualified Engineers… Canada ranks second in the G7 in terms of the availability of qualified engineers in its labour market.

Qualified Engineers Availability Index* 8.0

7.87

7.84

7.78

Index

7.5

7.39

7.0

6.88

6.78 6.62

6.5

6.0 France

Canada

U.S.

Japan

Italy

U.K.

Germany

Source: IMD, * Rank among 58 economies considered in the World Competitiveness Yearbook 2010. 32

Canada – Solid Reasons to Invest

IV A Solid Infrastructure

33

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

25th

Index

22nd

28th 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

….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$549 billion in 2009, a more than 2-fold increase from C$253 billion in 1999. As for Canada’s outbound FDI, the expansion of Canadian direct investment abroad (CDIA) has been equally spectacular, rising from C$291 billion in 1999 to C$593 billion in 2009, a more than 2-fold increase.

Canada's Inward and Outward FDI Stock ($Billion) 700 CDIA

600

FDI

500 400 300 200

19 99

20 00

20 01

20 02

20 03

Source: Statistics Canada, April 14, 2010

20 04

20 05

20 06

20 07

20 08

20 09

35

The United States is Canada’s Largest Source of FDI… In 2009, the U.S. share of foreign direct investment (FDI) in Canada stood at 52.5%, demonstrating its confidence in Canada’s business climate.

Geographic Distribution of Inward FDI Stock in Canada 2009 United Kingdom 11.6%

Netherlands 8.5% United States 52.5%

Switzerland 3.9% France 3.3% Brazil 2.7%

Others 17.6%

Source: Statistics Canada, April 14, 2010

36

…and Companies from Other Countries are also Increasing their Investments in Canada From 2000-2009, EU countries increased their FDI in Canada by C$68 billion and other non-EU countries together with the US increased their investment in Canada by C$163 billion, thus demonstrating their confidence as well in Canada.

Foreign direct investment in Canada by geographic area of origin 1990-2009 Billion $Cdn

600 500

Others

400 300 US

200 100

EU

0 '90

'92

'94

'96

'98

'00

'02

'04

'06

'08

Source: Statistics Canada, April 23, 2010 37

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 1999, significant growth in terms of FDI has occurred in utilities and in mining and oil and gas extraction.

Average Annual Growth Rates of Foreign Direct Investment by Industry (%) 1999-2009* 24.0

1.1

17.2

19.0 2.9 1.6

13.0 11.7 9.8 9.2 8.6 8.1 7.4 6.8 6.1 4.8 4.8 3.8

2.5 10.9 0.9 100.0 13.1 2.7 35.5 6.4 1.9 0.5 0.2 0.9

-0.3 -5.6

-10

0

Source: Statistics Canada, April 23, 2010 * North American Industry Classification System (NAICS)

10

2009 Distribution (%)

Utilities Mining and oil and gas extraction All other industries Transportation and warehousing Professional, scientific and technical services Management of companies and enterprises Construction OVERALL Finance and insurance Retail Trade Manufacturing Wholesale trade Information and communication technologies Accomodation and food services Agriculture, forestry, fishing and hunting Real estate and rental and leasing

20

30 38

Canada – Solid Reasons to Invest

V

Easy Access to Markets

39

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

6.0

5.97

5.8

5.4

5.57 5.44 5.44 5.44 5.35 5.33 5.33

5.29 5.27 5.27 5.24

5.2

5.12

5.07

5.0

5.02

U. S

ng a Ho pore ng Sw Kon itz g er lan De d nm ar Sw k ed e Ca n na da No rw ay Fin lan d Au Ne str t h ia e Ne rlan d w Ze s a la Ge nd r Lu man xe y mb ou Au r g str ali a

4.8

Si

Index

5.6

Global Enabling Trade Report 2009, World Economic Forum.

40

…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

20.8 million

Millions

20 15

11.5 million

Truck

10 5 0 1984

1988

1992

1996

Source: Statistics Canada and Transport Canada, 2008

2000

2004

2008*

(* Preliminary data for 2008 air passengers)

41

…and Direct Access to the NAFTA Market

500 km

1000 km

Victoria

St. John's

Edmonton

Calgary Vancouver

Saskatoon Regina Winnipeg

Seattle Milwaukee Chicago

Québec

Charlottetown

Fredericton Montréal Ottawa Toronto Boston Windsor New York

Cleveland Philadelphia Detroit Baltimore Pittsburgh Washington St. Louis San Francisco

Denver Atlanta

Los Angeles Houston Miami

Halifax

Canadian-based businesses have access to one market of 444 million consumers with a combined GDP of about US$16.7 trillion.* Many Canadian production hubs are actually closer to U.S. markets than American production sites — of Canada’s 20 largest cities, 17 are within an hour and half drive of the U.S. Direct air service between major cities in Canada and the U.S. has nearly doubled in the last six years.

* Source: World Bank: World Development Indicators database, October 2009 Mexico City

42

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.

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Canada – Solid Reasons to Invest

VI An Excellent Place to Live

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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.

62.3 61.1

61.1

61.0

60.7

60.5 59.6

59.0

n

57.1

Ja pa

ly Ita

en Sw ed

str ali a Au

Fr an ce

. itz er lan d Ge rm an y Sw

U. S

.

57.7

U. K

65 64 63 62 61 60 59 58 57 56 55

Ca na da

Location Desirability Score

Location Desirability Index*

•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

… 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

9.15

9.0

8.78

8.77

Index

8.5 7.94

8.0

7.37

7.5

6.94

7.0

6.71

6.5 6.0 Canada

Germany

France

U.S.

U.K.

Japan

Italy

Source: IMD, * Rank among 58 economies considered in the World Competitiveness Yearbook 2010. 46

…with Exceptional Quality of Life in Cities…. According to a recent annual quality-of-life ranking of 221 world cities, four Canadian cities ranked among the top 25.

Overall Quality of Life Ranking (Top 25 Cities)

103.9

103.9

104.1

104.2

104.2

104.5

104.6

104.8

105.0

105.3

105.4

105.5

105.7

105.9

106.3

106.5

106.2

106

107.0

107.0

107.2

107.4

107.4

107.9

108.0

(Index: New York City = 100.0 ) 108.6

110

102

98 f r t va ve nd or na ur ich ich en Zur ene cou ckla seld nkf i un a V M G an Fr Au Düs V

g rn lm on ey en am awa sels nto erlin urne our ho t Be ydn hag lingt terd s ro b t k o B u o c b r l O B S en s T e em to el p S W M Lux Am Co

l g g rth ea er ur Pe ontr mb emb M Ha ur N

lo Os

Source: Mercer Human Resources Consulting: May 2010

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…and Superior Eco-City* Standings According to a recent Eco-City* ranking of 221 world cities, four Canadian cities ranked among the top 25 with Calgary topping the list and Ottawa ranking 3rd.

Eco-City* Ranking (Top 25 Cities)

131.5

131.6

131.6

132.4

133.3

133.5

133.5

133.6

133.6

133.6

133.6

133.6

133.6

135.3

135.6

135.6

137.4

137.5

137.8

139.9

138.9

135.6

135

139.9

140

145.1

145

(Index: New York City = 100.0 ) 145.7

150

130 125 120 115

Ca lg Ho ary no lul Ot u ta w He a l s W ink el i Mi lingt n n on ea po Ad lis Co ela pe ide n Ko hag b e en ,J ap an St Oslo oc kh olm Pe Mo rth n Va trea nc l Nu ouve rem r b A u e rg ck l an d B e Pit ts b r n ur gh A b Zu e r r ic de h en , Ca UK nb Si erra ng ap ore B W as risb h in a n gt e on Me DC lbo ur ne

110

Source: Mercer Human Resources Consulting: May 2010 * Includes the following criteria: Water availability, water portability, waste removal, sewage, air pollution and traffic congestion. 48

Canada is a Leader in Human Development*… In the latest United Nations Human Development Report, Canada ranked first among the G7 countries and fourth among 182 countries surveyed.

Human Development Index* World Rank 4th 8th

10th 13th

Index

18th

Canada

France

Japan

U.S.

Italy

21th

22nd

U.K.

Germany

*Standing among 182 countries. Index based on achievements in terms of life expectancy, educational attainment, and adjusted real income. Source: United Nations Human Development Report 2009-2010, October 5, 2009 49

…and Ranks Among Model Nations of Peace According to the Global Peace Index, a recently released measure by the Economist Intelligence Unit, Canada ranked second in the G7 and fourteenth among 149 countries surveyed.

Global Peace Index* World Rank 7th 14th

16th 31st

32nd

Index

40th

85th

Japan

Canada

Germany

U.K.

France

Italy

U.S.

*Standing among 149 countries. Index ranking countries based on peacefulness, both domestically and abroad using 23 indicators, including the number of soldiers killed overseas, the level of violent domestic crimes and relations with neighbouring countries. Source: Economist Intelligence Unit, June 2010 50

Canada is also a Safe and Just Society… Canada ranks highest among G7 leaders in terms of the safest place to live and conduct business with the most fairly administered judicial system.

Security* — World Rank

Justice** — World Rank

9.0 8.5

8.1

8.0

5.0 4.0

Ca na da Ge rm an y

Ita ly

2.0 U. K.

5.0 U. S.

3.0

Ja pa n Fr an ce

5.5

3.3

Ita ly

5.9

6.0

6.0

U. S.

6.9

6.5

Ca na da Ge rm an y

Index

7.5 7.0

U. K.

7.4

7.0

7.5

7.0

7.6

7.5

7.6

Fr an ce

8.0

7.9

Ja pa n

8.5

Index

8.5

9.0 8.5

Source: IMD * Confidence that person and property is protected. Rank among 58 economies considered in the 2010 World Competitiveness Yearbook. **Degree of fairness of the judicial system in Society. Rank among 58 economies considered in the 2010 World Competitiveness Yearbook. 51

…a Land of Equal Opportunity… Canada ranks first among the G7 in providing equal opportunities for individuals.

Equal Opportunity* — World Rank 7.5 7.0

7.0 6.7

6.7 6.4

Index

6.5

6.4

6.0

5.6

5.5 5.0

5.0 4.5 4.0 Canada

France

U.S.

Germany

Japan

U.K.

Italy

Source: IMD * Race, gender, family background does not pose a handicap for competitiveness. Rank among 58 economies considered in the 2010 World Competitiveness Yearbook. 52

….and a Society Rich in Multiculturalism Canada has one of the world’s most multilingual societies with over 200 languages identified as the mother tongue. While there has been a decline in the proportion of the Canadian population whose mother tongue is one of the two official languages, there has been an overall increase in the proportion of the population whose mother tongue is neither English or French from 18.0% in 2001 to 20.1% in 2006.

Top Ten Spoken Languages in Canada* 57.8

60

59.1

(% of Population)

50 2006 Census

En gli sh

Fr en ch

Ch ine se **

Ita lia n

Ge rm an

Pu nja bi

Sp an ish

Ar ab ic

Ta ga log

0.7

0.8

0.9

0.7

0.9

0.7

1.2

0.9

1.2

1.0

1.5

1.5

0

1.5

2.9

10

1.7

20

3.3

22.9

% 30

2001 Census

22.1

40

Po rtu ge se

Source: Statistics Canada, 2001 and 2006 Census * based on mother tongue. ** includes Cantonese and Mandarin 53

Canada – Solid Reasons to Invest Canada’s economic fundamentals and relative cost advantages provide a first-rate business environment. Canada offers: Excellent Economic Fundamentals Low inflation and low interest rates Strongest economy in the G-7

A Cost-Competitive Business Environment Ease in establishing a new business Competitive tax system (particularly for R&D) Strong technological environment

A Dynamic Workforce

A Solid Infrastructure Highly globalized infrastructure and technological connectivity Rapidly expanding foreign direct investment linkages

Easy Access to Markets Geography and NAFTA provide easy access to the world’s most prosperous market Highly efficient transportation linkages with Asia

An Excellent Place to Live

The world’s best-educated workforce

Superb overall quality of life

Technology savvy workers

A society rich in multiculturalism

Think Creative. Think Competitive. Think Bottom Line.

Think Canada.

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Invest in Canada Through Canadian diplomatic missions around the world, and with direct access to investment contacts at national, provincial and municipal levels within Canada, the Invest in Canada Bureau of the Department of Foreign Affairs and International Trade Canada is well positioned to assist in attracting and expanding your investment. We invite you to explore all that Canada has to offer. Please contact your local Canadian Embassy, High Commission or Consulate, or write to us at: Foreign Affairs and International Trade Canada Invest in Canada Bureau, 111 Sussex Drive, 3rd Floor Ottawa, Ontario, Canada K1A 1J1 E-mail: [email protected] www.investincanada.gc.ca Think Canada! is prepared by Arif Mahmud, Invest in Canada Bureau.

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