Ministers Baird, Flaherty and Fast highlight Canada’s strong economic fundamentals and competitiveness at World Economic Forum
January 27, 2012 - The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, together with Foreign Affairs Minister John Baird and the Honourable Jim Flaherty, Minister of Finance, met with key investors and business leaders at the World Economic Forum (WEF) in Switzerland to highlight Canada’s strong economic fundamentals and pro-trade plan as part of the government’s plan to create jobs and growth at home.
Each year, more than 1,000 business leaders, from some of the world’s leading companies, participate in the WEF.
“With one in ten Canadian jobs linked to foreign investment, our government understands that attracting new investment creates jobs and prosperity for Canadian businesses, workers and families,” said Minister Fast. “Foreign investment brings innovation and new technologies and increases our competitiveness. With our strong banks, stable economy, business-friendly policies and strong commitment to free and open trade, our government continues to position Canada as an attractive destination for global investors.”
Canada’s stock of foreign direct investment (in and out) in 2010 was equivalent to 72.5 percent of its gross domestic product—the third-highest proportion in the G-7. Foreign-owned companies in Canada account for almost half of merchandise exports, one third of research and development (R & D) spending and over one quarter of Canadian profits, revenues and capital investment. Foreign direct investment stocks has steadily increased over the years. In 2010 alone, the stock of inward investment increased by $14 billion over 2009 levels.
“As a trading nation, Canada considers that foreign investment is critical to creating jobs for Canadians and growing the Canadian economy,” said Minister Baird. “Our government is working hard to create the conditions to attract investment, and in my travels I make sure to let other countries know the many reasons Forbes Magazine recently named Canada the best country in which to do business.”
“The Government of Canada has built a Canadian advantage by lowering taxes, promoting free trade and innovation and keeping government finances sustainable,” said Minister Flaherty. “Our bold action is positioning Canada as a low-tax investment destination. Canada’s Economic Action Plan, sound economic fundamentals and solid banking system helped Canada recover from the global economic crisis ahead of most industrialized countries.”
One company at Davos that already knows Canada’s strong business fundamentals first-hand is LANXESS, the world’s second-largest producer of butyl rubber. It employs more than 500 highly skilled personnel in Canada.
“LANXESS chose to invest in Canada because of its highly qualified and talented workforce, its innovative R & D centres and commitment to producing next-generation products,” said Axel Heitmann, Chairman of LANXESS’s board of management. “At our new R & D centre at the University of Western Ontario, we have produced the first quantities of bio-based rubber, which will enable us to decouple our resources from petroleum dependency. We look forward to growing our relationship with Canada even further.”
A number of Canada’s other key foreign investors are attending the WEF. They include Siemens, Shell, Rio Tinto, Google and AMEC PLC.
In 2011, the Harper government’s investment promotion efforts helped attract 95 new foreign businesses and expansion projects worth more than $16 billion to Canada. More than 5,300 new jobs were created as a result.
For additional details on Canada’s presence at the WEF, please consult Minister Fast at World Economic Forum.
To find multilingual, comprehensive information on Canada’s many investment and business advantages, please consult Invest in Canada.
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A backgrounder follows.
For further information, media representatives may contact:
Office of the Honourable Ed Fast
Minister of International Trade and Minister for the Asia-Pacific Gateway
Mary Ann Dewey-Plante
Office of the Minister of Finance
Trade Media Relations Office
Foreign Affairs and International Trade Canada
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Department of Finance Canada
Canada welcomes foreign investment that contributes to its economic growth, jobs, innovation, competitiveness and long-term prosperity. Between 2001 and 2010, Canada was the world’s eighth-largest destination for inbound foreign direct investment.
Canada’s strong economic fundamentals and world-leading competitive advantages make Canada an investment destination of choice for global investors. These advantages include:
Strong economic growth: Throughout the global economic downturn, Canada proved to be a top-performing economy offering businesses opportunities to grow, innovate and succeed. The International Monetary Fund predicts that Canada will be among the fastest growing economies of the G-7 in 2012. Canada has also recorded the fastest employment growth in the G-7 since mid-2009, fully recovering all the jobs lost during the recession.
Fiscal strength: Canada entered the global recession with a strong record of balanced budgets and low debt. Canada has the strongest fiscal position in the G-7 and among the best fiscal prospects in the G‑20. Canada is set to return to budgetary balance over the medium term. The federal debt-to-GDP ratio stood at 33.9 percent in 2010-11, and it is projected to decline to 31.7 percent by 2015-16.
Financial stability: Canada’s strength is underpinned by the world’s most stable financial sector, as affirmed by the WEF. At a time when financial institutions around the world were collapsing, no Canadian bank or insurer failed, and none required bailouts. Global Finance magazine has affirmed that six of the top 10 safest banks in North America are Canadian.
Lower business costs and taxes: Canada offers a low-cost, low-tax environment. Canada’s overall tax rate on new business investment is substantially lower than that of other G-7 countries. Canada has a combined federal-provincial statutory general corporate income tax rate of 26 percent, below the level of most other G-7 countries and about 13 percentage points lower than that of the United States. Canada is the first among G-20 members to make itself a tariff-free zone for manufacturers by eliminating tariffs on manufacturing inputs, machinery and equipment.
An excellent place for research and innovation: Canada offers a winning environment for research and innovation, including world-leading R & D infrastructure, innovation incentives and scientific talent. Canada has the G-7’s highest expenditures on research and development done in institutions of higher education, when measured as a share of GDP. Canada offers one of the most generous R & D tax incentives in the industrialized world. Combined federal and provincial credits can save foreign investors, on average, up to 30 percent of investment in R & D in Canada.
A competitive workforce: Canada is home to a highly educated, flexible and multicultural workforce that is well suited for today’s knowledge-based economy. Canada has one of the world’s best-educated workforces with the second-highest proportion of post-secondary graduates in the Organisation for Economic Co-operation and Development (OECD). Canada ranks second in the G-7 and fourth in the world for the quality of its management schools, according to the World Economic Forum.
A great place to live, study or work: Canada’s high quality of life provides a great backdrop for the success of individuals, families and globally engaged companies. According to the OECD’s Better Life Index, Canada has the highest quality of life in the G-7 and second-highest in the OECD. The Economist Intelligence Unit ranks Vancouver, Toronto and Calgary among the world’s top five cities for liveability.
A gateway to the world: With the shortest sailing time between Asia and North America, Canada offers businesses assured access to a lucrative North American market of nearly 450 million consumers. Canada has major international shipping ports on both the Atlantic and Pacific coasts (Halifax, Vancouver and Prince Rupert) and along the Great Lakes/St. Lawrence Seaway (Montreal). Seventeen of Canada’s 20 largest cities are located within a 90-minute drive of the Canada-U.S. border.
Find out more at Invest in Canada.