Canada Think Dynamic Think Competitive Think Bottom Line Think Canada!

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  • CanadaThink DynamicThinkCompetitiveThinkBottom LineThinkCanada!

  • CanadaCanada: a Dynamic, Competitive Economy Open for Global BusinessCanada's economic fundamentals andrelative cost advantages provide afirst-rate business environment. Canada provides:Report Card

  • Excellent economic fundamentalsEasy access to marketsA cost-competitive business environmentAn excellent place to live and workCanada Provides:

  • Canadas strong fiscal situationCCanada's fiscal situation has turned around dramatically:

    In 1994, Canadas deficit (as a percentage of GDP) was 6.7%, the third highest in the G-7.

    However, by 1997, Canada became the first G-7 country to post a surplus in the 1990s, and is the only G-7 nation expected by the OECD to post two straight financial surpluses from 2002 to 2003.

    Federal government spending (as a % of GDP) reached a 50-year low in the 2000-01 fiscal year, the key source of the Canadian fiscal turnaround.* Includes federal, provincial/state and local ** ProjectionsSource: OECD Economic Outlook, June 2002Total Government Surplus*Federal Budgetary BalancePublic Accounts BasisCanada Federal Program SpendingPublic Accounts Basis1993-941994-951995-961996-971997-981998-891999-002000-012001-022002-032003-04 10121416% of GDPProjected199419951996199719981999200020012002**2003** 0246810-2-4-6-8% of GDP

  • A Strong Fiscal SurplusCanada had the highest general government surplus as a percentage of GDP in the G-7 in 2001. The OECD expects Canada to be the only G-7 country with fiscal surpluses in 2002 and 2003. Total G-7 Government Fiscal Balance (% of GDP)2001-2003Source: OECD Economic Outlook, June 2002 200220012003CanadaFranceGermanyItalyJapanU.K.U.S.024-2-4-6-8-10

  • Low Inflation and Low Interest RatesCanadas targeted inflation rate is locked between 1% to 3%.

    Over the past five years, Canadian inflation averaged 1.9%Sources: Statistics Canada and the Federal Reserve Bank of St. Louis Inflation Long-Term Interest Rates19941995199619971998199920002001 01234Year-Over-Year % ChangeCanada's excellent fiscal situation and low inflation are reflected in low domestic interest rates.Source: Bank of Canada, Government long-term bond. U.S. Treasury, Constant Maturity long-term bond.Last data points plotted: Canada August 2, 2002; U.S. August 12, 200219941995199619971998199920002001200235810%

  • A Growing Domestic EconomyCanadas GDP grew at an annual rate of 6.0% in the first quarter, similar to U.S. growth but much stronger than growth in other G-7 countries.

    The OECD and IMF both forecast Canada to lead the G-7 in economic growth in 2002 and 2003.Real GDP Growth Projections 2002-2003 (%) 200320022.51.42.02.31.40.9-1.03.63.02.83.42.92.70.8U.S.CanadaFranceItalyGermanyU.K.Japan 024200320023.21.41.92.51.50.7-0.74.03.02.83.52.82.50.3U.S.CanadaFranceItalyGermanyU.K.Japan 024Source: International Monetary Fund, May 2002Source: OECD Economic Outlook, June 2002

  • Easy access to marketsCanada Provides:A cost-competitive business environmentAn excellent place to liveExcellent economic fundamentalsExcellent economic fundamentals

  • Streamlined Border FlowsSince the enactment of the North American Free Trade Agreement (NAFTA) in 1994, Canada provides long-term assured access to the North American market nearly 400 million people with a combined GDP of over $9.4 trillion ($U.S.).

    In addition to eliminating tariffs, NAFTA provides procedures for:

    border facilitation;movement of personnel;investment and intellectual property protection; andproduct certification.

    The North American market is serviced through a well integrated transportation system which is among worlds best.

    - Automated permit ports, transponder identification systems and joint processing centres are being tested and deployed.

    Source: Transport Canada and Statistics Canada, 2001Annual Transborder Crossings -Total Number of Trucks and Canada-US Air Passengers Entering CanadaTruckAir80828486889092949698200005101520

  • Smarter BordersEfficient border crossing was restored within a week of the tragic events of Sept 11thtoday, border wait times average less than 10 minutes

    In December, Canada and the USA signed a declaration to build a Smart Border for the 21st Century to accommodate the growth in trade and commerceinitiatives focus on improving existing border processes through the use of new technologies and infrastructure

    The December Budget also allocated $1.6 billion over the next five years for border initiatives

  • and Short Distances to MarketsAlmost half of the U.S. population lives within a 10 hour drive of Toronto, and over 60 percent within a two hour flight.Business travel between Canada and the U.S. has increased considerably since the inception of the Open Skies* Agreement (February, 1995)Direct air service between major cities in Canada and the U.S. has nearly doubled in 6 years.*Under Open Skies Canadian Air Carriers gained unlimited rights to establish routes from any point in Canada to any point in the United States. Similarly, U.S. carriers also gained unlimited access to the Canadian market (with a phase in period for up to three years)

  • 1995199619971998199920000100200300400500600700800$ BillionsCanada - U.S. Trade$700 BillionSource: Statistics CanadaCanada Is by Far the Largest U.S. Trading PartnerCanada and the U.S. have the worlds largest trade partnership, with two-way trade amounting to $700 billion in 2000. In fact, this averages to more than $1.3 million dollars a minute in trade.

    Between 1995 and 2000, trade between Canada and the U.S. grew at a compound average annual rate of 10.4%.

    The U.S. trades more with Canada than with any other country - the U.S. trades more with Canada than with all of the countries of the E.U. combined!Canada20.3%Mexico12.4%Japan10.6%China5.8%Germany4.4%All Others46.5%Distribution of U.S. Trade* 2000* Merchandise tradeSource: World Trade Atlas

  • Canada Welcomes Foreign Investment Source: Statistics Canada2001Foreign direct investment in Canada has more than doubled since 1990.

    Increasingly more investment goes to knowledge-based industries in high-tech manufacturing and services sectors.

    The U.S. is the dominant source of foreign capital.

    - In 2001, the U.S. share of foreign direct investment (FDI) in Canada was 67%.Machinery & Transportation$321 BillionDistribution of Foreign Direct Investmentby Industry1990$131 BillionDistribution of Foreign Direct Investmentby Region/CountrySource: Statistics Canada2001

  • 19901991199219931994199519961997199819992000050100150200250300350$ BillionsCanada - U.S. Direct Investment StockUnited States57.4%U.K.7.5%France5.5%Netherlands3.5%Barbados3.3%Japan2.4%All Others20.4%Source: Statistics CanadaSource: Statistics CanadaDistribution of Canadian Total Direct Investment StockCanada and the U.S. have one of the worlds largest direct investment partnerships, with the stock of investment between the two countries totaling $340 billion in 2000.

    Between 1990 and 2000, U.S. foreign direct investment in Canada grew at an average annual rate of 6.9%.

    Over this period, Canadian direct investment abroad grew at an average annual rate of 8.2%.The United States is Canadas Largest Source of FDI

  • A cost-competitive business environmentCanada Provides:Easy access to marketsAn excellent place to live and workExcellent economic fundamentalsExcellent economic fundamentals

  • Superior Quality WorkforceThe overall skill level of Canada's workforce ranks high among competing countries.

    According to the World Competitiveness Yearbook, Canada has the highest percentage of individuals achieving at least college or university education. * Percentage of the population that has attained at least tertiary education among 49 countries considered in the World Competitiveness Yearbook, 2002.

  • An Excellent Post Secondary System1998 U.S. Gourman report scored 10 Canadian electrical engineering programs in the top 22, and 18 in the top 40Canadas 67 universities and colleges produce more than 25,000 graduates per year in math, engineering and pure and applied sciences

    Institution Score U.S. Cdn. Rank RankM.I.T.4.92 1Stanford4.91 2Berkeley4.88 3Illinois4.86 4Toronto4.86 1UCLA4.82 5McGill4.82 2Cornell4.81 6U.B.C.4.81 3McMaster4.80 4Purdue4.79 7Southern California4.77 8Princeton4.76 9Michigan4.7510Carnegie Mellon4.7411Polytechnic-Brooklyn4.7312Queens4.72 5Alberta4.72 6Calgary4.71 7Polytechnique, Mtl.4.70 8Saskatchewan4.70 9Manitoba4.70 10RANKING OF ELECTRICAL ENGINEERINGUNIVERSITY PROGRAMS

  • Skilled ManagementManagement Education* World RankU.S.FranceCanadaU.KGermanyJapanItalyIndex1st2nd4th6th21st31st49thCanada ranks third among the G-7 and fourth overall in a 75-country study of locally available Management education in first-class business schools.

    - Eight Canadian business schools are ranked among the top 100 Management Schools in the world according to a January 2001 survey by the Financial Times (UK).

  • Low Labour CostsOccupational Wages Knowledge Workers, 1999* Canadian data have been converted to full-year assuming a 52-week work year. ** Purchasing power parity for 1999*** date for computer programmers based on average for 1997, 1998, 1999Source: IC calculations based on Statistics Canada Labour Force Survey and U.S. Bureau of Labour Statistics Occupational Employment and Wage EstimatesAccording to the U.S. Bureau of Labor Statistics, labour costs in Canadian manufacturing (wage and non-wage) are the lowest in the G-7.

    Occupational wages are also lower in Canada for knowledge workers.* Figures are for 1999. Source: U.S. Bureau of Labor Statistic