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Dec 9, 2012 (4 years and 13 days ago)

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THINK

CANADA

February 2012

2

Table of Contents




Page



I


Excellent Economic Fundamentals



3


II


A Cost
-
Competitive Business Environment


12


III

A Dynamic Workforce




27


IV

A Solid Infrastructure




35


V

Easy Access to Markets




41

VI

An Excellent Place to Live



46










I

Excellent Economic Fundamentals

3






Canada has a Relatively Strong Economy


Despite the Global Slowdown


Consensus Economics

Consensus Economics

2012
-
13


According to Consensus Economics, Canada has been a top performer among
the G
-
7 in GDP growth over the
2008
-
11
period and is expected to remain so
through
2012
-
13.

Source: Consensus Forecasts,
February 2012,
Consensus Economics Inc.

4

Real GDP Growth and Projections (%)
0.9
0.2
-0.6
0.1
-1.1
0.7
-0.8
2.2
2.4
1.2
0.5
-0.7
1.1
1.6
-2.0
-1.0
0.0
1.0
2.0
3.0
Canada
U.S.
U.K.
France
Italy
Germany
Japan
%
2008
-
11

5

Real GDP Growth and Projections (%)
0.8
0.2
-0.7
0.0
-1.0
0.6
-0.9
2.2
2.3
1.2
0.9
0.0
1.3
1.8
-2.0
-1.0
0.0
1.0
2.0
3.0
Canada
U.S.
U.K.
France
Italy
Germany
Japan
%
2008
-
11

2012
-
13


Similarly, recent OECD statistics rank Canada as a top performer among G
-
7
countries
in terms of GDP growth from
2008
-
11
and during the
2012
-
13
forecast
period.

Source: OECD Economic Outlook, No.
90, November
2011.






Other Forecasts also Highlight Canada’s


Relatively Strong Economy


OECD

Consensus Economics

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
.

Source: U.S. Bureau of
Labour

Statistics, OECD Economic Outlook,
No.90, November
2011

Employment Growth (%)
2000-2010
0.11
0.57
0.62
0.62
0.76
1.45
-0.28
Japan
U.S.
U.K.
Germany
France
Italy
Canada
7


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.


Starting with Budget 2010, Canada chose to run short deficits to stimulate its
economy without putting long
-
term prosperity at risk
.


As a percentage of GDP, the budgetary deficit is projected to decline from 2.1% in
2010
-
11 to 0.2% in 2015
-
16. The savings targeted by the deficit reduction plan,
which aims to produce at least $4 billion in ongoing annual budgetary savings by
2014
-
15 will allow the government to return to budgetary balance by 2015
-
16.

* Forecasts for both countries

Source Canada:
Update of Economic and Fiscal Projections
Finance Canada,
November 8,
2011

Source United States: United States Congressional Budget Office,
January 31, 2012.

Federal Government Budgetary Balance
(% of GDP)
-2.1
-1.8
-1.6
-0.9
-0.4
-0.2
0.0
-8.7
-7.0
-3.7
-2.1
-1.5
-1.6
-1.1
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
2010-11
2011-12*
2012-13*
2013-14*
2014-15*
2015-16*
2016-17*
Canada
U.S.

…a Sound Fiscal Advantage…

8

8



…Leading Most Other G
-
7 Countries…


Despite posting a deficit of 5.6% of its GDP in 2010, Canada will still be in a
better position than most G
-
7 countries during the 2011
-
2013 forecast
period with an overall deficit of 4.0% of GDP.

Source: OECD Economic Outlook,
No.90, November
2011

Total Government Budget Balance 2010-13
(% of GDP)
(National Accounts Basis)
-5.6
-4.5
-10.4
-4.3
-7.1
-10.7
-7.8
-4.0
-1.8
-8.5
-1.0
-4.4
-9.2
-9.1
-14.0
-12.0
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
Canada
Italy
U.K.
Germany
France
U.S.
Japan
2010

2011
-
13

9


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 1.7% compared to 2.2% for the U.S. and 1.7% for the G
-
7.

Inflation
(Year-Over-Year % Change)
2.2
2.0
2.1
2.4
0.3
1.8
3.4
3.2
2.9
3.8
-0.3
1.6
1.9
2.0
1.9
3.0
0.3
1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2005
2006
2007
2008
2009
2010
Canada
U.S.
G-7
Source: OECD Economic Outlook, No.
90, November 2011


…a Low Inflation Rate Regime…

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.

Source Canada: Government of Canada 10
-
Year Bond
: February 10, 2012

Source U.S.: U.S. Treasury, Constant Maturity 10
-
Year Bond
: February 10, 2012

Daily Yields (%)
1.6
1.8
2.0
2.2
2.4
2.6
7-Oct-11
21-Oct-11
4-Nov-11
18-Nov-11
2-Dec-11
16-Dec-11
30-Dec-11
13-Jan-12
27-Jan-12
10-Feb-12
Long-Term Bond Yields (%)
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Canada

U.S.

U.S.

Canada

11


…and Great Potential for Future Economic

Prosperity


According the Prosperity Potential Index*, Canada ranks 1
st

in the G
-
7 and 6
th

among 30 developed countries in terms of the likelihood for economic prosperity
in the year 2020.

Prosperity Potential Index - Ranking of Top Ten
Countries
10
th
9th
8
th
7th
6
th
5th
4
th
3rd
2
nd
1st
Sweden
Norway
Finland
Iceland
Switzerland
Canada
Denmark
Luxembourg
New Zealand
Netherlands
Rank
*
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

12

II

A Cost
-
Competitive Business Environment

13



Canada is Acclaimed for its Superior Business

Climate by the EIU…


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 G
-
7 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 (2012
-
16), down from fourth from the historical period (2007
-
2011).



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 2012-2016
10
th
9th
8
th
7th
6
th
5th
4
th
3rd
2
nd
1st
Singapore
Switzerland
Hong Kong
Australia
Canada
Sweden
New Zealand
Denmark
USA
Norway
Rank
Source: The Economist Intelligence Unit
, February 2012

14

14


… and More Recently by Forbes


Canada was ranked # 1in Forbes latest annual study on the Best Countries for
Business, up from 4
th

place last year


Canada ranked in the top ten in 7 of the 11 criteria used in the study, most notably
personal freedom (1
st
); degree of red tape involved in starting a business (3
rd
);
investor protection (5
th
) and low corruption (6
th
).

Top Ten Countries to Conduct Business in 2011
10
th
9th
8
th
7th
6
th
5th
4
th
3rd
2
nd
1st
Canada
New Zealand
Hong Kong
Ireland
Denmark
Singapore
Sweden
Norway
U.K.
U.S.A.
Rank
*Standing among 134 countries. Rankings based on the following eleven categories of quantitative and qualitative indicators:

tr
ade freedom, monetary
freedom, property rights, innovation, technology, red tape, investor protection, corruption, personal freedom tax burden and
mar
ket performance.


Source: Forbes Publishing, October 2011

15



Canada is Considered 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 1
st

in
the G
-
7 and 2
nd

among the 131 countries evaluated in the GRI study.

Highest Ranked Countries in Terms of the Global Risk
Indicator*
10
th
9th
8
th
7th
6
th
5th
4
th
3rd
2
nd
1st
Australia
Canada
Norway
Switzerland
Austria
Finland
France
Germany
Luxembourg
Netherlands
Rank

The Global Risk Indicator (GRI) assesses economic, commercial, external and political risk to provide risk ratings for 131 co
unt
ries worldwide.


Source: Dun & Bradstreet, August 2009

16


…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 G
-
7.


Canada ranks first among the G
-
7 and OECD countries for the lowest number of
procedures required to establish a new business.


Number of Procedures*
1
5
6
8
9
5.0
6
6
0
1
2
3
4
5
6
7
8
9
10
Canada
France
OECD
Average
U.S.
Italy
U.K.
Japan
Germany
Source: Doing Business in
2012
-

The World Bank Group,
2011
* 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 ele
ct
the directors and secretary of the company is not considered a procedure, as there are no outside parties involved.

17


…and Relatively Less Time


Canada ranks first among the G
-
7 for the fewest number of days required for
establishing a new business.

Duration (days)
5
6
6
7
13
13
15
23
0
5
10
15
20
25
Canada
U.S.
Italy
France
U.K.
OECD
Average
Germany
Japan
Source: Doing Business in
2012
-

The World Bank Group,
2011

18



Canada also has Low Business Costs…


For the eighth consecutive time, KPMG’s Competitive Alternatives study finds
Canada leads the G
-
7 with the lowest business costs.


Canada is the lowest
-
cost G
-
7 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.

Source: KPMG Competitive Alternatives 2010

Percentage Cost Advantage (Disadvantage) Relative to
the United States
5.0
1.8
1.7
0.0
0.0
-2.6
-7.6
-10
-8
-6
-4
-2
0
2
4
6
Canada
U.K.
France
Italy
U.S.
Germany
Japan
19


…and Offers an Overall Tax Advantage for

Firms to Expand..…

International Comparison of Statutory General Corporate Tax
Rates in 2012
39.2
37.9
34.4
30.2
27.5
26.0
25.0
10
15
20
25
30
35
40
45
U.S.
Japan
France
Germany
Italy
Canada
U.K.
%

As a result of corporate income tax reductions introduced by the Government since
2006
,
Canada
has the
second lowest statutory corporate tax rate in the G
-
7
as of
2012.


Canada’s overall
tax rate on new business
investment is substantially lower than all G
-
7
countries.

Source: Finance Canada,
January 2012

20



…with Quality R&D as its Major Benefit

Relative Generosity of
R&D Tax Incentives*
(Index: Canada = 100.0)
76.1
77.0
80.6
84.0
85.9
100.0
123.9
50
60
70
80
90
100
110
120
130
Germany
Italy
U.S.
U.K.
Japan
Canada
France

Canada offers one of the most
favorable tax treatments for
R&D among the G
-
7.


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.

Source:
Warda
,
Jacek
, Rating Measuring Canada's R&D Tax Incentives: May 22,
2009. Data unchanged as of January 2012.

Note: Relative generosity is determined by dividing the after tax cost of performing $1.00 of R&D by 1 less the corporate tax

ra
te.

Results are indexed to the relative generosity of Canada's system of tax
-
based support for R&D. The higher the ratio the more co
mpetitive the tax system.

* Calculations based on large firms

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 G
-
7.


Six of the 50 safest banks are in Canada, according to a recent study: Royal Bank of
Canada (11
th
), Toronto Dominion Bank (13
th
),
Scotiabank

(18
th
),
Caisse

Centrale

Desjardins (20
th
), Bank of Montreal (30
th
) and CIBC (31
st
).**

Soundness of Banks* World Rank
10
th
9th
8
th
7th
6
th
5th
4
th
3rd
2
nd
1st
Canada
South Africa
Panama
Australia
Singapore
Chile
New Zealand
Finland
Lebanon
Hong Kong
Rank
*Standing among 142 countries. Ranking based on the degree of soundness of financial institutions. Source: Global Competitive
nes
s Report, 2011
-
2012

** Standing among 500 world banks based on total assets and long
-
term credit ratings. Source: Global Finance Magazine, August 20
11

22


…and 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 1
st

in its Capital Access Index.

*Standing among 122 countries. Milken Institute, April 2010

Capital Access Index (Maximum = 10)
Top 10 Regions/Countries 2009
8.25
7.99
7.95
7.92
7.88
7.68
7.54
7.52
7.49
7.47
7
7.5
8
8.5
Canada
Hong Kong
U.K.
Singapore
U.S.
Switzerland
Sweden
Australia
Netherlands
Finland

23

Canada Offers Competitive and


Affordable Business Telephone Charges…


Canada’s business telephone charges are the lowest among G
-
7 countries.

Source: OECD Communications Outlook 2011

Monthly Business* Telephone Charges
(US$ PPP**)
134.4
118.4
106.2
87.4
62.3
55.9
49.3
0
20
40
60
80
100
120
140
Japan
U.K.
Italy
France
U.S.
Germany
Canada

* Business basket of telephone charges include fixed access and 260 calls broken down according to distance, destination (fi
xe
d, mobile and
international), time of day over a one
-
month period.


**PPP = Purchasing Power Parity (equalization of purchasing power of different countries in their home countries for a given
ba
sket of goods)


24



…and Low Residential Telephone Charges


Canada has the lowest residential telephone charges among the G
-
7 and
OECD countries.

Monthly Residential* Telephone Charges
(US$ PPP)
125.1
77.9
73.1
65.1
61.2
56.5
53.7
0
20
40
60
80
100
120
140
Japan
Italy
U.S.
U.K.
France
Germany
Canada
Source: OECD Communications Outlook 2011


* High usage basket of residential telephone charges include fixed access and 420 calls broken down according to distance, de
st
ination (fixed,
mobile and international), time of day over a one
-
month period.

** PPP = Purchasing Power Parity (equalization of purchasing power of different countries in their home countries for a given

ba
sket of goods)

25


Canada Stands Among Leaders in IT


Industry Competitiveness…


Canada ranks third behind the U.S. and the U.K. among the G
-
7 and seventh in a 66
-
country review of the countries best suited to provide an optimally competitive
environment for information technology (IT) firms.

*Standing among 66 countries. Index based on the following six categories of quantitative and qualitative indicators: overall

bu
siness
environment; IT infrastructure; human capital; legal environment; R&D environment; and support for IT industry development.


Source: Economist Intelligence Unit, September
2011

IT Industry Competitiveness Index* World Rank
10
th
9th
8
th
7th
6
th
5th
4
th
3rd
2
nd
1st
U.S.
Finland
Singapore
Sweden
U.K.
Denmark
Canada
Ireland
Australia
Netherlands
Rank
26


…and Consumer Internet Activity


Canada’s internet activity was ranked second in the G
-
7 and third globally in
2010 and is forecast to remain among the top to 2015.

Consumer Internet Traffic per Capita
Top 10 Countries (Gigabyte per month per person)
1.5
1.9
4.9
3.7
7.6
9.0
9.5
8.0
9.9
33.7
13.3
16.9
21.9
22.1
31.6
32.8
33.5
40.3
40.4
113.9
0
20
40
60
80
100
120
New Zealand
Australia
Japan
Italy
Germany
U.S.
Canada
U.K.
France
S.Korea
2010
2015
Source: CISCO Visual Networking Index IP Forecast, Cisco Systems Inc., June 2011

27

27

III

A Dynamic Workforce

28


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.


Four Canadian universities are ranked among the top 100 in the world
according to the UK
-
based
Quacquarelli

Symonds (QS)

World University
rankings for 2011: McGill University 17
th
;
University of Toronto 23
rd
; University
of British Columbia (UBC) 51
st
; and University of Alberta 100
th
.


Percentage of Individuals Aged 25-64 Having Attained Post-
Secondary Education - Top 10 OECD Countries
50.0
45.0
44.0
41.0
40.0
39.0
37.0
37.0
37.0
37.0
0
10
20
30
40
50
60
Canada
Israel
Japan
USA
New Zealand
S. Korea
Australia
Finland
Norway
UK
%
Source:
OECD, Education at a Glance
2011

29


…is a World Leader in Youth Academic



Performance…


Canadian schoolchildren ranked third among the 34 OECD countries and fifth
among all 65 countries surveyed in the OECD Program for International
Student Assessment (PISA).


The PISA survey is conducted annually among 470,000 school pupils across
65 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
539
536
524
521
520
515
508
506
503
501
493
450
500
550
South Korea
Finland
Canada
New Zealand
Japan
Australia
Netherlands
Belgium
Norway
Switzerland
OECD average
Source: OECD 2010

30


…and Manufacturing Sector Innovative

Performance


Canada ranked 3
rd

in the G
-
7 and 14
th

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 (15
th
), Israel (16
th
), Germany (19
th
), France (20
th
) and Australia
(22
nd
).

International Innovation Index* World Rank
38
th
20th
19
th
15th
14
th
9th
8
th
U.S.
Japan
Canada
U.K.
Germany
France
Italy
Index
*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 generate
d and employment growth.

Source: The Innovation Imperative in Manufacturing


How the United States Can Restore its Edge, Boston Consulting Group, March
2009

31



Canada has Superior Management Training…


Five Canadian schools of management are ranked among the top 100 in the world
according
to the
Financial Times

(UK) Global MBA rankings for 2011.
University of
Toronto (
Rotman
) 46
th
;
Western University (
Ivey) 47
th
; York University in Toronto
(
Schulich
) 51
st
; McGill University (
Desautels
) 57
th

and University of British Columbia
(Sauder) 80
th
.


In addition, Canada ranked second in the G
-
7 in a study measuring the extent to which
management education meets the needs of the business community. (see chart below)



Management Education Quality Index*
7.46
7.37
6.83
6.15
5.91
5.12
4.94
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
USA
Canada
Germany
France
U.K.
Italy
Japan
Index
Source: IMD, * Rank among 59 economies considered in the World Competitiveness Yearbook 2011.

32


…nearly the Highest Concentration of Entrepreneurs…


From a global standpoint, Canada has the 2
nd

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.


Source: Statistics Netherlands
2011

Number of Entrepreneurs as a Percentage of the
Working Population
12.1
12.0
11.6
11.4
11.1
9.8
9.7
8.9
8.8
8.7
7.0
5
10
15
Netherlands
Canada
Ireland
U.K.
Belgium
U.S.
Germany
Austria
Finland
Sweden
Denmark
33


…PC and Internet Users…


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

Source: IMD, World Competitiveness Yearbook 2011

Internet Users
Per 1,000 Inhabitants
831
827
820
797
769
734
731
700
750
800
850
Canada
Japan
U.S.
U.K.
Germany
France
Italy
Personal Computers
Per 1,000 Inhabitants
928
886
847
829
802
741
718
650
700
750
800
850
900
950
U.S.
Canada
U.K.
Germany
France
Japan
Italy
34


…and a Readily Available Army of Qualified

Engineers



Canada ranks first in the G
-
7 in terms of the availability of qualified engineers
in its
labour

market.

Source: IMD, * Rank among 59 economies considered in the World Competitiveness Yearbook 2011.

Qualified Engineers Availability Index*
7.98
7.87
7.81
7.62
7.12
6.95
6.41
6.0
6.5
7.0
7.5
8.0
Canada
Japan
U.S.
France
Italy
U.K.
Germany
Index
35

IV

A Solid Infrastructure

36


Canada’s Highly Globalized Infrastructure…


Due to its rapidly growing prominence as an outsourcing market of choice, Canada
ranked second in the G
-
7 and thirteenth among 208 countries profiled in the recent
KOF Index of Globalization* which measures the economic, social and political
dimensions of globalization.

KOF Globalization Index Rankings, 2011*
44
th
27th
23
rd
21st
16
th
13th
7
th
France
Canada
Germany
U.K.
Italy
U.S.
Japan
Rank
Source: KOF Swiss Economic Institute, Swiss Federal Institute of Technology, Zurich, 2011 * Standing based on 5 sub
-
indices: ac
tual
economic flows, economic restrictions, information flows, personal contact and cultural proximity under the economic, social
and

political
dimensions of globalization.

37


…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$562 billion in 2010, an almost 2
-
fold increase from
C$319
billion in 2000.


As for Canada’s outbound FDI, the expansion of Canadian direct investment abroad (CDIA)
has
been equally spectacular, rising from C$357 billion in 2000 to C$617 billion in 2010.

Canada's Inward and Outward FDI Stock ($Billion)
200
300
400
500
600
700
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
CDIA

FDI

Source: Statistics Canada, April 15, 2011

38


The United States is Canada’s Largest

Source of FDI…


In 2010, the U.S. share of foreign direct investment (FDI) in Canada stood
at 54.5%, demonstrating its confidence in Canada’s business climate.

Source: Statistics Canada, April 15, 2011

Geographic Distribution of Inward FDI Stock in Canada
2010
Netherlands
9.2%
United Kingdom 7.5%
Switzerland

3.6%
Japan 2.9%
France
3.4%
United States 54.5%
Others
18.9%
39


…and Companies from Other Countries are also
Increasing their Investments in Canada


From 2000
-
2010, EU countries increased their FDI in Canada by C$77 billion and other
non
-
EU countries together with the US increased their investment in Canada by C$165
billion, thus demonstrating their confidence as well in Canada.

Source:
Statistics Canada, April 15, 2011

0
100
200
300
400
500
600
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
Foreign direct investment in Canada

by geographic area of origin 1990
-
2010

Billion

$Cdn

EU

US

Others

40


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 mining and oil and gas extraction and in management of
companies and enterprises.

Average Annual Growth Rates of Foreign Direct
Investment by Industry (%) 2000-2010*
1.3
2.4
3.8
3.8
4.7
5.2
5.5
5.8
6.7
8.3
10.3
10.8
12.3
12.6
-4.7
10.6
-10
0
10
20
Real estate and rental and leasing
Agriculture, forestry, fishing and hunting
Manufacturing
Wholesale trade
Professional, scientific and technical services
Information and cultural industries
Accomodation and food services
Transportation and warehousing
OVERALL
Retail trade
Finance and insurance
Utilities
Construction
Management of companies and enterprises
Mining and oil and gas extraction
All other industries
Source: Statistics Canada, April 15, 2011


3.0

16.4


13.1


1.0


1.1


14.6


2.9

100.0


0.9


0.5


2.3


1.9


6.2


34.8


0.2


1.0

2010 Distribution (%)

* North American Industry Classification System (NAICS)

41

V

Easy Access to Markets

42


Canada Offers Efficient Flow of Goods

Across Borders…


Canada leads the G
-
7 and ranks 8
th

among 125 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 - Top 20 Countries
6.06
5.70
5.41
5.41
5.37
5.33
5.32
5.29
5.28
5.26
5.26
5.25
5.20
5.17
5.13
5.12
5.06
5.06
5.03
5.02
4.8
5.0
5.2
5.4
5.6
5.8
6.0
6.2
Singapore
Hong Kong
Denmark
Sweden
Switzerland
New Zealand
Norway
Canada
Luxembourg
Netherlands
Iceland
Finland
Germany
Austria
Australia
UAE
UK
Chile
USA
France
Index
Global Enabling Trade Report 2010, World Economic Forum.

43


…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)
0.0
5.0
10.0
15.0
20.0
25.0
1983
1987
1991
1995
1999
2003
2007
2011*
Millions
Source: Statistics Canada and Transport Canada, 2011 (* Preliminary data for 2011 .)

Truck

Air

10.5 million

22.0 million

44


…and Direct Access to the NAFTA Market


Canadian
-
based
businesses have
access to one
market of 456
million consumers
with a combined
GDP of about
US$17.2 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,
December
2011

Mexico City

1000 km

500 km

Los Angeles

Denver

Houston

Atlanta

Seattle

Miami

New York

Boston

Philadelphia

Washington

Baltimore

Detroit

Chicago

Cleveland

St. Louis

Pittsburgh

Milwaukee

San Francisco

St. John's

Calgary

Vancouver

Regina

Halifax

Toronto

Montréal

Winnipeg

Charlottetown

Edmonton

Victoria

Ottawa

Windsor

Québec

Fredericton

Saskatoon

45


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.

46

VI

An Excellent Place to Live

47


Canada Overall Quality of Life is One

of the World’s Best…


Canada ranks highest in the G
-
7 and second among the 34 OECD countries in
terms of overall living conditions and quality of life.

Source: Compendium of OECD Well
-
Being Indicators, OECD May 2011, * Index based on weighted average of 11 topics
(housing, income, jobs, community, education, environment, governance, health, life satisfaction, safety and work
-
life balance)

identified as essential by the OECD in the areas of material living conditions and quality of life.

Better Life Index*
Top 10 OECD Countries
8.10
8.09
8.01
7.90
7.82
7.73
7.55
7.53
7.45
7.45
7.0
7.5
8.0
8.5
Australia
Canada
Sweden
NewZealand
Norway
Denmark
U.S.
Switzerland
Finland
Netherlands
Index
48


…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.

Source: Mercer Human Resources Consulting:
November 2011

Overall Quality of Life Ranking (Top 25 Cities)
25th
24th
22th
22th
21th
20th
19th
18th
17th
16th
15th
14th
13th
12th
11th
9th
9th
8th
7
th
6th
5
th
4th
3
rd
2nd
1
st
Vienna
Zurich
Auckland
Munich
Vancouver
Dusseldorf
Frankfurt
Geneva
Bern
Copenhagen
Sydney
Amsterdam
Wellington
Ottawa
Toronto
Hamburg
Berlin
Melbourne
Luxembourg
Stockholm
Perth
Montreal
Brussels
Nurnberg
Singapore
Rank
49


…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 3
rd
.

Source: Mercer Human Resources Consulting: May 2010

* Includes the following criteria: Water availability, water portability, waste removal, sewage, air pollution and traffic
congestion.

Eco-City* Ranking (Top 25 Cities)

(Index: New York City = 100.0 )
145.7
145.1
139.9
139.9
138.9
137.8
137.5
137.4
135.6
135.6
135.6
135.3
133.6
133.6
133.6
133.6
133.6
133.6
133.5
133.5
133.3
132.4
131.6
131.6
131.5
110
115
120
125
130
135
140
145
150
Calgary
Honolulu
Ottawa
Helsinki
Wellington
Minneapolis
Adelaide
Copenhagen
Kobe, Japan
Oslo
Stockholm
Perth
Montreal
Vancouver
Nuremberg
Auckland
Bern
Pittsburgh
Zurich
Aberdeen, UK
Canberra
Singapore
Brisbane
Washington DC
Melbourne
50


…and the Best Overall Reputation on

the Global Stage


The
Reputation Institute ranks Canada as having the highest reputation ranking among
50 countries based on several indicators, including a good quality of life, a safe place to
live, an advanced economy, an effective government and an appealing environment.


Global Reputation* - Ranking of Top Ten Countries
10
th
9th
8
th
7th
6
th
5th
4
th
3rd
2
nd
1st
Canada
Sweden
Australia
Switzerland
New Zealand
Norway
Denmark
Finland
Austria
Netherlands
Rank
Ranking based on the Reputation
Institute's 2011 Country
RepTrak
(TM), an annual study measuring the public perceptions of 50 countries around the
world. The study measures the overall Trust, Esteem, Admiration and Good Feelings the public holds towards these countries, a
s w
ell as their
perceptions across 16 different attributes, including a good quality of life, a safe place to live and a strong attention to
the
ir
environment..


Source
:
Reputation Institute, New York, January 2012

51


Canada is a Leader in Human Development*…


In the latest United Nations Human Development Report, Canada ranked
second among the G
-
7 countries and sixth among 187 countries surveyed.

*Standing among
187
countries. Index based on achievements in terms of life expectancy, educational attainment, and adjusted real income.

Source: United Nations Human Development Report
2011,
November
2, 2011

Human Development Index* World Rank
28
th
24th
20
th
12th
9
th
6th
4
th
U.S.
Canada
Germany
Japan
France
Italy
U.K.
Index
52


…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 G
-
7 and eighth
among 153 countries surveyed.

*Standing among 153 countries. Index ranking countries based on peacefulness, both domestically and abroad using 23 indicator
s,
including
the number of soldiers killed overseas, the level of violent domestic crimes and relations with neighbouring countries.

Source: Economist Intelligence Unit, May 2011

Global Peace Index* World Rank
82
nd
45th
36
th
26th
15
th
8th
3
th
Japan
Canada
Germany
U.K.
France
Italy
U.S.
Index
53


Canada is also a Safe and Just Society…


Canada is a G
-
7 leader in terms of the safest place to live and conduct business
with the most fairly administered judicial system.

Source: IMD * Confidence that person and property is protected. Rank among 59 economies considered in the 2011 World Competi
tiv
eness Yearbook.

**Degree of fairness of the judicial system in Society. Rank among 59 economies considered in the 2011 World Competitiveness
Yea
rbook.

Security* — World Rank
9.0
8.8
8.6
8.2
7.8
7.5
6.4
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
Germany
Canada
Japan
U.S.
U.K.
France
Italy
Index
Justice** — World Rank
8.5
8.4
7.9
7.7
7.5
6.8
3.9
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Germany
Canada
U.K.
Japan
U.S.
France
Italy
Index
54


…a Land of Equal Opportunity…


Canada ranks first among the G
-
7 in providing equal opportunities for
individuals.

Source: IMD * Race, gender, family background does not pose a handicap for competitiveness.

Rank among 59 economies considered in the 2011 World Competitiveness Yearbook.

Equal Opportunity* — World Rank
7.6
6.7
6.4
6.4
6.1
6.0
5.0
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
Canada
U.S.
Japan
Germany
France
U.K.
Italy
Index
55


…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.

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

Top Ten Spoken Languages in Canada*
(% of Population)
0.7
0.9
0.9
1.2
1.2
1.5
1.5
3.3
22.1
57.8
0.8
0.7
0.7
0.9
1.0
1.5
1.7
2.9
22.9
59.1
0
10
20
30
40
50
60
Portugese
Tagalog
Arabic
Spanish
Punjabi
German
Italian
Chinese**
French
English
%
2006 Census
2001 Census
56

Canada


We Take Care of Business


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


One of the world’s best
-
educated
workforces


Technology savvy workers


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


Superb overall quality of life


A society rich in multiculturalism

57

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: investincanada@international.gc.ca



www.investincanada.gc.ca



Think Canada!

is prepared by
Arif

Mahmud,
Invest in Canada Bureau.