Statement of Priorities and Accountabilities for Invest in Canada
September 18, 2020
Mr. Mitch Garber
Chair, Board of Directors
Invest in Canada
1802–160 Elgin Street
Ottawa ON K2P 2P7
Dear Mr. Garber:
I am pleased to provide you with the 2020 Statement of Priorities and Accountabilities (SPA) to guide Invest in Canada (IIC) in supporting the government’s foreign direct investment (FDI) attraction priorities and inform the development of IIC’s 2021-22 Departmental Plan.
First, I would like to recognize the various engagements and events IIC has either led or participated in since its creation on March 12, 2018, including 15 major global events. As IIC moves from start-up to scale-up, it will be important to continue engaging with prospective investors and to work with all partners to bring robust investments, adding good quality jobs to Canada’s economy.
Between 2017 and 2018, the FDI stock grew 5% in Canada to reach $877 billion. This growth was comparable to the average annual growth of the last 10 years (4.8% for 2009 to 2018). I commend IIC for growing the pipeline of investor companies by 96% in 2018 and 2019 and for referring 66 investment opportunities to partners, 36 of which have made specific investment decisions. IIC’s collaboration with the Trade Commissioner Service (TCS) and other federal, provincial, territorial and municipal partners to promote Canada as a top destination for global investments, as well as its development of marketing material and data-sharing platforms, is also noted.
In addition, I want to highlight the importance of all the governance work IIC accomplished this year by working with the Treasury Board Secretariat and Global Affairs Canada (GAC). Some highlights are IIC’s internal policies, its Departmental Results Framework, and its web initiatives to share information with its partners. These accomplishments may not be front and centre to investors, but play an integral part in supporting IIC’s activities.
I recognize that the COVID-19 pandemic has required fundamental changes in IIC’s plans for the current year as presented in its 2020-21 Departmental Plan, and for all FDI events and outreach for the foreseeable future. I commend IIC for its nimbleness in adapting its activities to ones better geared for the present and ongoing sensitive global economic situation. In particular, I want to thank IIC on supporting investors to navigate through various levels of government during these difficult times. It will be important for IIC to work with other departments to identify investment opportunities that will reinforce Canada’s efficiency in reacting to future pandemics.
For the upcoming year, and to be incorporated in the next Departmental Plan, I request IIC focuses on the following priorities:
Promote Canada as a Top Investment Destination
Initiatives implemented by the government, such as the Strategic Innovation Fund, the Global Skills Strategy, the Superclusters Initiative, the Artificial Intelligence and Intellectual Property Strategy, and the International Education Strategy, are valuable to domestic companies, but are also a clear advantage for global foreign investors. As regular global trade and relations are disrupted following the COVID-19 pandemic, our preferential market access to over 50 countries through 14 trade agreements will be a valuable advantage to foreign investors looking to grow and diversify their companies.
Furthermore, as outlined in the 2018 Fall Economic Statement, the government is committed to streamlining regulatory requirements and launched three important immediate changes to Canada’s tax system, which allow businesses to write off a larger share of their costs in the year an investment is made. As new programs and initiatives are introduced by the government, I ask IIC to develop promotion strategies with other government departments to ensure global foreign investors are aware of these additional advantages to investing in Canada. At the same time, I ask that IIC continues to watch and track global business fiscal support policies to ensure Canada is at the forefront of investment and business incentives.
I request that IIC leverages the potential of Canada’s Superclusters by creating, identifying and maximizing investment attraction opportunities, which complement the development of these Superclusters and align with the Economic Strategy Tables. I also ask it supports other
federal departments in promoting their programs with potential foreign investors, such as the Strategic Innovation Fund. Furthermore, IIC needs to ensure that foreign investments, including within the economy of intangibles, generate benefits to Canada.
Develop Canada’s Investment Attraction Strategy
With its launch in March 2018, IIC now occupies a central role within Canada’s FDI attraction ecosystem, responsible for coordinating Canada’s FDI efforts and for supporting foreign investors in their decision-making process. While one of IIC’s functions is to develop and establish a national FDI strategy, all other federal government departments and all levels of government will participate in delivering it.
As this is part of IIC’s enabling legislation, I am pleased IIC has begun work on this important deliverable to be completed by the end of 2020. I expect IIC to collaborate with the TCS; Innovation, Science and Economic Development Canada; Agriculture and Agri-Food Canada; Natural Resources Canada; and the Privy Council Office, as well as provincial, territorial and municipal partners, to develop and finalize a detailed national FDI promotion strategy. This strategy will guide the coordination of FDI attraction activities of all partners within the national
FDI ecosystem who will leverage the Canadian brand to attract and support investment into Canada.
The strategy needs to address the role FDI attraction can play in the recovery of the Canadian economy in light of the COVID-19 pandemic. While it is important for IIC to target strong foreign investments that will grow Canada’s economy and provide good-paying jobs, it is also important the strategy has a certain focus on attracting foreign investments that will strengthen our domestic supply chains. Through its consultations with all level of governments and industry partners, I ask that IIC identifies existing domestic supply chains gaps and develops an approach to identify and target the right foreign companies to fill those gaps. I also ask that it anticipates and fills gaps and opportunities that will be presented to Canada by the effects of the pandemic and its new economy.
Social distancing measures, likely to remain for the foreseeable future, have increased the use of online tools to shop, work and stay informed. Moving forward, digitalization of firms will be fundamental for keeping operations running. Since the digital economy will play a more important role than ever before, I specifically request that the strategy proposes how to identify and target foreign companies that can play a role in supporting and growing Canada’s innovation ecosystem. In that respect, I also request that the strategy include a framework to assess the benefits to Canadians stemming from these innovation and the intangible economy opportunities as these will differ from benefits gained from other sectors.
The strategy must also ensure that potential opportunities for FDI are seized while also protecting our existing FDI stocks. It is crucial to identify investment opportunities that can help save Canadian jobs and keep the economy on the road to recovery, while addressing national and economic security threats.
The strategy should be an evergreen document and fully updated every two to five years to reflect the economical opportunities and challenges of the time.
Support the Government’s Trade Diversification Strategy
As outlined in the 2018 Fall Economic Statement, the government launched a Trade Diversification Strategy to help more Canadian businesses take advantage of commercial opportunities abroad, particularly in markets made more accessible by Canada’s free trade agreements. Foreign direct investment plays an integral role in the government’s strategy to support strong economic growth and prosperity for all Canadians. This aligns with my priority to work across the TCS, Export Development Canada, the Business Development Bank of Canada and the Canadian Commercial Corporation to ensure that all resources are maximizing our trade promotion capabilities, which in turn highlights the advantages for foreign investors to expand in or come to Canada.
While the current business environment is not ideal for promoting FDI due to the unprecedented degree of uncertainty and upheaval in the global economy, made even more challenging by widespread travel restrictions, it remains important to maintain close relationships with existing investors and leads, and to continue looking for new opportunities—I am well aware IIC has been active in this regard, along with the TCS. Furthermore, as we transition from the current situation to one that is more favourable for economic investment, it will be important to quickly identify those markets most favourable for FDI into Canada.
As IIC promotes Canada to new markets in the spirit of diversifying investments sources, I request that IIC aligns their measured strategy for each of its key markets with the TCS corresponding FDI strategies. These strategies will serve to define risks and benefits of investments from these countries, as well as describe a particular value proposition for each market, taking into consideration how sectors in this region align with the government’s priorities for growing Canada’s economy and broadening the middle-class.
I understand your Departmental Results Framework was approved in January and includes indicators tracking the general increase of FDI stock in Canada as well as measures of FDI from key target markets and specific sectors. In addition to these indicators, I would like IIC to track the quantity of successful investments facilitated, jobs created, the dollar value of those investments and the impacts they have on Canada’s innovation ecosystem. These could be reported to IIC Board members and to the department on a quarterly basis. This will be especially important in order to demonstrate the contribution FDI will make to the recovery of Canada’s economy.
Grow Canada’s Economy
It is my job to promote Canada as a great place to invest in, while helping Canadian business owners and entrepreneurs grow into the global marketplace, creating good jobs for hardworking Canadians. Once the limitations put into place to fight the pandemic are lifted and our economy can be restarted, it will be more important than ever to highlight and promote how our united government efforts, our strong financial position, our thriving innovation sector, our stable business environment and our highly-skilled, well-educated and diverse workforce carried us through this crisis to a stronger place than other similar countries.
When evaluating FDI opportunities, I ask that IIC takes into account how these opportunities fit into the Canadian economy and to consider how they will contribute to growing our small to medium‑sized enterprises (SMEs) and create good-paying jobs, which could in turn create more SMEs. I also ask that IIC carefully assess how these opportunities will contribute to our knowledge-based economy, ensuring that the intellectual property developed continues to benefit Canadians in the future.
Although FDI is essential in ensuring that Canadian businesses are able to invest in innovation and to compete in the global economy, I ask that IIC pays special attention to ensure any new investment does not introduce new risks to Canada’s economy or national security, including risks to the health and safety of Canadians and to our knowledge-based ecosystem. This will be done by working closely with Innovation, Science and Economic Development and with GAC to adhere to the Investment Canada Act.
Since sovereign wealth funds will likely be looking for acquisitions in strong economies like Canada once the economy restarts, particular attention should be given to this type of investment because it may be motivated by non-commercial imperatives that could harm Canada’s economic or national security interests, a risk that is amplified in the current COVID-19 pandemic context. As the economy continues to grow, I request that IIC pays special attention to knowledge-based sectors, as the intangible economy continues to grow and offer different dynamic.
Cooperate with the TCS and Other Government Departments
IIC and the TCS play distinct, but complementary roles in attracting foreign direct investment to Canada. Both parties must work toward seamless service delivery to potential investors and look to manage their relationships as a strategic partnership. Within the current evolving situation, this will be even more important since opportunities will quickly change and decisions will need to be made swiftly but accurately.
I am pleased with the progress made by both organizations over the past year to streamline information sharing, such as their collaboration on improving comparative data, sharing information on potential investors, client referral between both organizations, and coordination of marketing and outreach. Whether IIC works with TCS officers abroad or with GAC (headquarters), it is important to continue exchanging information on potential investors, market opportunities and strategic plans.
Investment projects often necessitate the involvement of other government departments as well as various levels of government and private sector partners. Therefore, I ask that IIC collaborates closely with other federal departments, especially with the TCS, to coordinate its efforts and to support the work of others. Where possible, I also encourage IIC to co-locate with TCS regional offices across Canada to facilitate closer collaboration and reduce overlap.
In addition, to ensure referrals between all partners are efficiently managed and responsive to the needs of prospective investors, I expect IIC to collaborate with other federal departments to establish and maintain a target priority list of key investment projects. This will serve as a roadmap for all of government to advance together and ensure projects are aligned with the government’s economic growth policy priorities, including the recommendations from the Economic Strategy Tables. As the economy continues to reopen and the government’s priorities adjust to better fit future needs, I request IIC works in conjunction with other departments in the FDI Governance Committees to ensure a good line of sight is kept on new opportunities as well as the possible loss of current FDI.
I encourage IIC to draw from the expertise of other federal departments to support the attraction of foreign investment across Canada’s value chain and to further develop strong relationships with these departments through improved sharing of investment data and market information. I also ask IIC create and deliver impactful messaging and an advocacy approach that promotes Canada’s advantage to foreign investors while highlighting to foreign investors the current status of specific sectors.
Enter into an Memorandum of Understanding (MOU) with GAC
Recognizing the existing collaboration between both organizations, but at the same time, the need for a more structured joint approach, a clear roadmap between GAC and IIC is required to further leverage resources of both parties in attracting investments to Canada and to outline how participants will work together.
I understand IIC and GAC are developing a MOU. Building on existing governance mechanisms, this MOU will outline collaboration in the areas of information sharing, referrals, coordination of activities and events, reciprocal training activities and maintaining relationships with other investment attraction partners in Canada. As both organizations’ planned activities for the current year must by necessity be significantly altered, I expect both organizations to make frequent revisions to this MOU that adjust expectations for your collaboration to the realities of the economic environment.
I encourage both organizations to finalize standard practices in regard to identifying the type of investment each organization will lead on and a referral protocol amongst all partners. This will ensure not only that each partner is clear on its role, responsibilities and expectations at each step of the investment decision, but will also make it clearer for other partners to understand their own interactions with both organizations.
Strengthen the Canada Brand
As part of its mandate, IIC must develop and deliver a strong national investment brand focused on an international audience. Although the brand is delivered by IIC through marketing products and initiatives, including signature events, social media, and an interactive website offering a portal for site selectors and Canadian investment promotion organizations, the TCS also plays a large and active role in disseminating and leveraging the brand.
I recognize that the COVID-19 pandemic has hindered how IIC was planning on promoting a strengthened Canada brand and commend it for rapidly adjusting its messaging to a tone more appropriate for the current situation. However, the world will get through this, the economy will start up again, and foreign investors will continue to look for locations in which to invest and diversify. Therefore, I ask that IIC continues to strengthen and share the Canada brand with all levels of government to build on the momentum created since IIC’s inception, while respecting the evolving environment. It should do so while applying a sustainability lens to promotional items and its broader operations. Furthermore, I request that gifts and promotional items be sourced in Canada.
I am aware some events have moved to a virtual platform. Now that travel restrictions limit in‑person opportunities to engage potential foreign investors, I request that IIC evaluates the feasibility and results from participating in virtual events. I also ask that it develops a new marketing strategy to ensure the Canada brand reaches prospective investors.
I expect that in addition to playing a leading role in actively marketing Canada internationally, IIC coordinates this marketing with all partners. Additionally, because the TCS network abroad plays a vital role in providing information on Canada to potential foreign investors within their market, I also ask that IIC continues to develop and maintain relevant material for the TCS to use when promoting Canada and its important sectors.
Promote the Tourism Sector to Foreign Investors
As outlined in the letter of April 30, 2019, of the Honourable Jim Carr, then Minister of International Trade, to Mr. Ian McKay, growth of the tourism sector in Canada could be accelerated by increasing the amount of private investment. Canada cannot achieve the critical mass of attractions, accommodations and other enablers it needs to compete internationally without additional investments.
Taking into consideration the current travel and tourism limitations, I recognize an adjustment may be required to these activities. I encourage IIC to work closely with the TCS when identifying and pursuing foreign investment opportunities in the tourism sector. I would also ask that IIC joins the regional Tourism Investment Groups that are to be established under the federal tourism strategy. Through these groups, Destination Canada, the Regional Economic Development Agencies as well as other federal, provincial, territorial and municipal partners will align their tourism investments, identify mutual investment opportunities and attract private investment.
Establish Open Communication
As Minister of Small Business, Export Promotion and International Trade, I am responsible for the Invest in Canada Act and request that you continue keeping me apprised of your activities and parliamentary responsibilities by working closely with officials of my department and through a semi-annual report.
The Honourable Mary Ng, P.C., M.P.