Low taxes, world-leading Economic Action Plan, and skilled workforce solidify Canada as an investment destination of choice, Minister says
June 21, 2012 - The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, today highlighted Canada’s strong economic fundamentals and world-leading investment advantages by welcoming investments in Canada by two prominent German companies. Mercedes-Benz Canada, Inc., a subsidiary of Daimler AG, today officially opened the world’s first automotive facility dedicated to the production and production technology development of fuel-cell stacks. Earlier this week, K+S marked the official groundbreaking of its new potash mine, the Legacy Project, near Moose Jaw, Saskatchewan.
“I congratulate Mercedes and K+S for choosing to invest in Canada and creating more than 1,000 new jobs for hard-working Canadians,” said Minister Fast. “These investments represent significant milestones in two important and growing sectors of Canada’s economy. They are also testimony to the strong trade and investment ties between Germany and Canada. With Canada’s solid economic fundamentals, skilled workforce and pro-trade, low-tax environment, our government’s economic policies have made Canada an investment destination of choice, which is creating jobs, growth and long-term prosperity for Canadian workers and their families.”
“We are proud to locate our new fuel-cell stack production and production technology development facility in Canada,” said Tim A. Reuss, President and CEO of Mercedes-Benz Canada. “Considering the concentration of fuel-cell stack activities and the availability of highly skilled knowledge workers, there is no better place in the world to bring together the development and production of fuel-cell stacks as we work toward the commercialization of this advanced zero local emission technology.”
Canada’s hydrogen and fuel-cell sector is a global centre of expertise and is recognized internationally for its capabilities in research, development and early-stage commercialization. According to the Canadian Hydrogen and Fuel Cell Sector Profile 2012, revenue in the sector more than doubled from $97 million in 2001 to $211 million in 2011; employment increased by 14 percent from 1,772 jobs in 2001 to 2,025 in 2011, showing continued job growth in this sector. The Government of Canada provides strong support to the sector through the Natural Sciences and Engineering Research Council of Canada and Western Economic Diversification Canada, as well as the world-class research infrastructure provided by the National Research Council of Canada.
“With one in 10 Canadian jobs generated by foreign investment, our government understands that attracting new investment contributes to Canada’s competitive advantage, enhances productivity and promotes innovation,” said Minister Fast. “I will continue to encourage foreign direct investment to our country and let global investors know the many reasons Forbes magazine ranked Canada as the best country in the world to do business.”
“We believe the Legacy Project is an investment in the future of our company, an investment in the people of Saskatchewan and an investment in a sustainable future,” said Norbert Steiner, Chairman of the Board of Executive Directors of K+S, whose company is building the first new potash mine in Saskatchewan in nearly 40 years. “The Legacy Project will mean new job opportunities for Saskatchewan workers and new business opportunities for Canadian companies supplying goods and services to this major economic development. With the growing global demand for potash, we recognize the value of investing in a country with a business-friendly environment and stable economy.”
Canada is the largest producer of potash in the world; more than 4,000 people are employed in the sector. In 2011, potash was once again Canada's top-ranked mineral commodity by value of production, with shipments totalling $8 billion. Production volumes reached a new historical record in 2011, up 13.5 percent over 2010, as a result of growing global demand for potash (data from Natural Resources Canada’s Mineral Production Information Bulletin, March 2012).
In 2011, the Harper government’s investment promotion efforts helped attract 155 foreign businesses and expansion projects worth more than $20 billion to the Canadian economy. More than 7,500 new jobs were created as a result.
Canada’s trade commissioner service (TCS) assisted both German corporations throughout the development of these two investments. The TCS is located in more than 150 cities worldwide and in regional offices across 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
Trade Media Relations Office
Foreign Affairs and International Trade Canada
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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 it an investment destination of choice for global investors. These advantages include:
Strong economic growth: 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 of the jobs lost during the global 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 a balanced budget 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 30.1 percent by 2015-16.
Financial stability: Canada’s strength is underpinned by what the World Economic Forum (WEF) affirmed as the world’s most stable financial sector, four years in a row. 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 6 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, which is 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 become a tariff-free zone for manufacturers by eliminating tariffs on manufacturing inputs, machinery and equipment.
Excellence in 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 R & D 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 return to foreign investors, on average, up to 30 percent of their 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 highest proportion of post-secondary graduates among members of the Organisation for Economic Co-operation and Development (OECD). Canada ranks second among G-7 members and fourth in the world for the quality of its management schools, according to the WEF. According to the Swiss-based Institute for Management Development, Canada has the highest number of qualified engineers in the G-7.
Exceptional quality of life: 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 sixth-highest among OECD members. 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 ready access to a lucrative North American market of nearly 460 million consumers. Canada has major international shipping ports on both the Atlantic and Pacific coasts (Halifax, Vancouver and Prince Rupert) and along the St. Lawrence Seaway (Montréal). 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.