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Address by Minister Fast at the Financial Times Global Investment Series: Focus on Canada Event
March 13, 2013 - New York City, New York
Check Against Delivery
Ladies and gentlemen, on behalf of the Government of Canada, I welcome you to the Focus on Canada event, which we are holding in partnership with the Financial Times.
As some of the top U.S. business leaders and influencers, many of you are no doubt exploring strategic investments in innovative, growing economies that will bring you solid returns and investment security.
I encourage you to look no further than Canada, with its many competitive advantages and rock-solid economic fundamentals.
To begin with, Canada the United States are each other’s closest allies, best partners and most reliable customers. Indeed, there is no stronger or most trusted trade relationship than that between us.
As you know, this past January 2 marked the 25th anniversary of the signing of the Canada-U.S. Free Trade Agreement [FTA]. The Agreement positioned our two countries as the vanguard of trade liberalization. It stood as a shining example to the world of just what can be achieved when barriers to trade are reduced and eliminated.
But as any good student of North American economic history can tell you, the Canada-U.S. FTA was only the beginning.
Its successor, NAFTA, was destined to become the single most successful economic arrangement the world has ever known.
Canada and the United States now share the largest bilateral flow of goods, services, people and capital between any two countries in the world.
In 2012, our two-way trade in goods and services exceeded [US]$742 billion. That’s nearly $2 billion a day, or almost $1.4 million every single minute.
And these numbers aren’t simply sterile statistics. They represent jobs—2.4 million of them in Canada and 8 million in the United States.
Much more recently, Prime Minister Stephen Harper and President Barack Obama committed to intensifying the Canada-U.S. partnership through the Beyond the Border Action Plan. That Plan is a template that begins to move a significant component of our respective security structures to the perimeter of our two countries in order to thin out our common border and facilitate freer, more efficient trade between us.
By making it easier for firms in both countries to do business, we are laying the foundation for more jobs and growth in Canada and the United States.
Naturally, given the deep integration of our respective supply chains, U.S. companies strongly influence how companies in Canada manufacture their goods; we not only sell things to one another, we make things together, which is why there is such potential for enhanced relationships in the future.
Global leaders such as IBM [Corp.], Siemens [AG], and Praxair [Inc.] are taking advantage of this North American production platform. The CEO of Cisco [Systems, Inc.] recently praised Canada as “the easiest place in the world to do business.”
So what’s our secret? A combination of key factors that will appeal to any business mind:
- A strong, stable financial environment;
- Our support for research and innovation; and
- Our abundant energy resources.
Let’s begin with Canada’s economic fundamentals. Our economy is widely recognized as one of the world’s strongest. In fact, for the fifth consecutive year, the World Economic Forum has declared our banking system to be the soundest in the world. According to the International Monetary Fund, we enjoy the lowest net debt-to-GDP ratio in the G-7.
We also have a combined federal-provincial corporate income tax rate of just 26 percent—that’s below the level of most G-7 countries (and about 14 percentage points lower than that of the United States).
Overall, Canada is recognized as having the second-lowest business operating costs in the G-7—a full five percentage points lower than in the United States, I would note.
In the realm of research and innovation, Canada offers a winning environment, including world-leading R & D infrastructure, innovation incentives and scientific talent.
We have one of the most generous R & D tax incentive programs in the industrialized world—programs that can currently save firms up to 30 cents on a dollar invested in R & D in Canada.
What’s more, our colleges and universities are very responsive to business.
Companies regularly benefit from an open dialogue with academic institutions—institutions that make every effort to ensure they deliver quality, relevant educational programs to train workersfor what business needs today and will need in the future.
Of course, Canada also has a significant natural resource advantage.
As I often remind my own compatriots when I’m at home, Canada is perhaps the most richly endowed country in the world when it comes to natural resources. There’s gold, silver, potash, coal, uranium, lumber, rare earths and a most abundant source of fresh water. Did I mention we’re now the third-largest producer of diamonds in the world? Admittedly, these are riches that nature has bestowed upon us, and we recognize our obligation to steward them wisely and share them with the rest of the world.
Of course, our country also has an abundance of stable traditional and renewable energy resources. Companies doing business in Canada benefit from excellent energy rates and a level of energy security that few other nations can offer.
Indeed, Canada is the United States’ number one supplier of energy for everything from oil and natural gas to electricity and nuclear fuel.
But, as in the United States, the most important of all of Canada’s natural resources are our people:
- Of the OECD [Organisation for Economic Co-operation and Development] countries, Canada’s workforce is the most highly educated, with half of our working-age population having a tertiary level education.
- The availability of qualified engineers in Canada is the highest in the G-7 according to the International Institute for Management Development.
- According to the World Economic Forum, Canada ranks second in the G-7 for the quality of its management schools.
- And over 200 languages are spoken in Canada. Indeed, it is the depth and diversity of our workforce that drives the success of so many of our industries.
Friends, with advantages ranging from our strong, stable financial system to a low-tax, business-friendly environment, from the blessing of our natural resources to our innovative, well-educated workforce, we believe that U.S. businesses can find a lot to like in the Canadian economy.
It’s not without good reason that Forbes magazine has opined that Canada is the best country to do business in the G-20.
So yes, Canada is very much “open for business.” Of course, there’s still much more we can do. We would still like to improve our competitiveness by becoming, among other things, more effective in commercializing our innovation. We will also continue to work with the United States, our most important trading partner, to improve trade facilitation and continue our work to thin out our common border.
Finally, recognizing the deep integration of our two economies, we continue to look for a way forward to eliminate the application of policies like Buy American at the sub-national level when it comes to government procurement between our two countries.
Friends, I often compare trade and investment to a great adventure. It isn’t for the timid or the faint of heart. It certainly isn’t for the naysayer or ideologue. Trade and investment take great courage and vision. It’s for those who see an opportunity, seize the moment and achieve great things for those they serve.
Canada and the United States embarked on that great adventure many years ago, and we have been blessed to walk that journey together, shoulder to shoulder, as partners.
I thank you all for joining me here today and look forward to welcoming your investment to Canada.
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