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We chose this link because Stefan Aarino brings up a good point about the canadian economy in which he states in his video about canadian real estate that the mortgage rate has gone down drastically. he went on to say how when something is down for a while it tends to take a long while to bring back up to pace. The example he used was when you rely on something for longer it takes longer to revert, go back, or undo what has been done.

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Canadian Real Estate Market Forecast 2018

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Have a basic understanding of how investing in the economy could help stimulate a more efficient economy. Places that save and invest back into the economy have a better chance to see rapid growth. Rapid growth cause more of demand which then in return would rise the interest rates.

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In 2008 canada had a higher effective tax rate on new investment compared to the US, and UK. As we go further down the line canada's effective tax rate on new investment now only goes down drastically but is comparatively lower than the US or UK.

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This Graph shows the investment in non residential structures this is important because it shows that the fall in oil prices has drastically lowered business investment, thus staggering the growth of the economy as a whole.

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We chose this article because This article talks about how canadian investment from abroad grows the economy at a much faster rate than how long it would take the economy to grow soles on canadian investment. What i found useful from this site is how international investment helps our economy grow as a whole.

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John Manley has remarked that success on the federal deficit has allowed Canada to make choices that will allow it to become a "œ"˜northern tiger' " a preferred des- tination for knowledge workers, trade and investment, and a center of excellence in innovation, science, research and education." At the same time, Industry Canada has com- missioned two University of British Columbia professors to convene a conference and prepare a subsequent volume that will focus on Canada's ability to attract the following "œinternationally mobile factors": foreign direct investment (FDI), R&D, and human capital. The data on at least two of these fronts, FDI and R&D, is disappointing.

Whereas in 1970 Canada's inward FDI stock was four times its outward, today, outward FDI exceeds inward. As a result, although Canada has been able to maintain its share of the rap- idly growing stocks of world outward FDI, its share of world inward FDI stocks has been falling (Figure 1, page 33). These patterns are especially of concern given the US economy has been maintaining its inward share of world FDI and decreasing its outward share (Figure 2, page 33). That is, the propensity (rel- ative to global trends) for US multinational enterprises (MNEs) to locate abroad has fallen, whereas that for Canadian MNEs to locate abroad has not. On the other side, the propensity for foreign firms to locate in Canada has fallen, whereas the propensity foreign MNEs to locate in the US has not.

In addition, Canada's R&D performance has been chroni- cally weak, ranking far behind those of most of our trading part- ners. This poor R&D performance has been linked to both our productivity gap with the US economy and, until recently, the depreciating value of the Canadian dollar. But this is not a new development. Since the 1980s, Canada has been hobbled by the lowest R&D levels of any G7 country in terms of its gross expen- diture on research and development (GERD). A single company, Nortel Networks, has for many years been responsible for about one-fourth of all the private sector R&D in Canada.

Although there seems to be a con- sensus that policy makers must address the comparatively poor productivity and R&D performance of the Canadian economy, there is less of a consensus regarding both the cause and the effects of Canada's changing FDI patterns. As a result, informed policy recommendations are not avail- able. This article discusses these pat- terns, both at the aggregate and industry levels, and argues that although Canada's reduced attractive- ness to foreign investors should be of some concern, the surge in Canada's outward FDI is a positive development for the Canadian economy.

The importance of FDI to the economy must be understood before policy recommendations can be for- mulated to address the changing FDI trends noted above. There is a rich dis- cussion of the costs and benefits of both inward and outward FDI to home and host countries.

First, both international trade and FDI are important channels of R&D diffusion. It is well established that a majority of the world's formal R&D efforts are located in the OECD coun- tries, with about one-half in the United States. The immediate ques- tion that arises is, are the benefits of R&D as concentrated as the expendi- tures? The answer is clearly no. But how are R&D efforts in one country disseminated to other countries? In their seminal 1995 work, David Coe and Elhanan Helpman establish that international trade is an important channel through which R&D under- taken in one country is diffused to other countries. When a country imports goods and services from another country, it is also importing the embedded technology. The more a country imports from countries that undertake a lot of R&D, the more R&D will be embedded in the imports. By modeling international trade as the channel by which R&D in one country is transmitted to other countries, they establish that the R&D efforts of any domestic economy improves domestic productivity as well as the productivity of trading partners. In many instances, and especially for smaller economies, the impact of trading part- ners' R&D efforts on domestic produc- tivity are larger than the domestic countries own R&D efforts on its own domestic productivity. That is, for these smaller economies, access to the R&D undertaken in other countries is often more important for domestic productivity growth than is the coun- try's own R&D efforts.

In subsequent work, Walid Hejazi and A. Edward Safarian extend the Coe and Helpman framework of analy- sis to allow FDI in addition to interna- tional trade to be a channel by which R&D is diffused internationally. Using data for OECD countries, they show that FDI is the dominant channel of R&D diffusion " roughly two-thirds of R&D spillovers occur through FDI, and one-third through trade. My 2001 article in Policy Options confirms these results for Canada.

Second, the international business literature argues that multinational enterprises (MNEs) must be more pro- ductive than domestic firms in order to be able to overcome the costs of doing business in a foreign economy. The empirical evidence supports this notion " several Statistics Canada studies as well as Daniel Trefler's 1999 Policy Options paper document the superior productivity performance of foreign firms operating in Canada. These higher productivity firms have positive effects on the local economy vis-à-vis R&D spillovers, as well as on many other dimensions.

Third, there is a great deal of evi- dence to indicate that inward FDI con- tributes to domestic capital formation. However, the impact of both Canadian outward and inward FDI on domestic capital formation depends on the source of the FDI. For example, FDI into Canada from the United States has a smaller impact on Canadian cap- ital formation than does FDI from out- side North America. The reasons for this relate to the role of intrafirm trade " American MNEs supply much of their Canadian affiliates with interme- diate inputs produced in the United States, hence relying less on Canadian suppliers. In contrast, MNEs from out- side of North America rely more heav- ily on local Canadian suppliers. As a result, there is a larger impact on Canadian production and hence capi- tal formation when the inward FDI is coming form outside North America.

The impact of Canadian outward FDI on the Canadian economy also depends on the role of intrafirm trade within Canadian MNEs. If a Canadian affiliate locates in the United States, there will be a larger reliance on inter- mediate inputs produced in Canada in comparison to a Canadian affiliate locating outside of North America. The data on intrafirm trade by Canadian MNEs clearly shows this to be the case. Therefore, Canadian FDI into the United States actually stimulates production and hence capital formation in Canada, whereas Canadian FDI into developing countries and Europe do not. In fact the evidence indicates that Canadian FDI locating in developing countries actually reduces Canadian capital formation. It latter result that may be of concern to policy makers, a point to which I return below.

Finally, there is an emerging con- sensus in the international economics and business literatures that there is a complementary relationship between international trade and FDI. That is, when Canadian FDI to any given country increases, Canada's trade to that same country also increases. Having a multinational presence abroad often stimulates trade. It has been shown, for example, that FDI abroad has a beachhead effect in pro- moting subsequent domestic exports. Reasons for this include FDI abroad markets home products and home- made inputs, and MNE retailers are more likely to sell home products.

This complementary relationship between trade and FDI is consistent with estimates produced by the United Nations Conference on Trade and Development (UNCTAD), which indi- cate that the top 500 MNEs account for 90 percent of the world's stock of FDI and well over one half of world trade. In other words, Canada's trade and hence our linkages to the global economy are very much linked to the role of MNEs.

This discussion clearly indicates therefore that FDI is very important in many dimensions of the Canadian economy. As a result, the FDI trends that have emerged over the past two decades must be of concern to Canadian policy makers as well as the private sector. These changing FDI patterns have had significant impacts on the Canadian economy, and their effects may persist.

In my last Policy Options article (2001), I argued that Canada relies too heavily on acquired R&D and too little on its own efforts. I argued that such an approach is detrimental to the Canadian economy. These arguments are consis- tent with those of the Roger Martin, dean of the University of Toronto's Rotman School of Management, who has argued eloquently that Canadian firms depend too much on replication strategies and not enough on being innovative. The industry minister, Allan Rock, has acknowledged that the federal government has done a poor job of pro- moting the use of homegrown technolo- gies within our own borders.

Clearly, Canada's relatively poor productivity performance has reduced Canada's attractiveness to foreign firms as a location to invest, and at the same time, less investment by foreign firms, which are more productive on average than domestic firms, has also reduced the growth in Canada's productivity. In other words, the FDI trends described above are both a cause and a reflection of Canada's R&D and productivity per- formance. Improving Canada's produc- tivity performance will go a long way in improving Canada's attractiveness as a location to invest. At the same time, improving Canada's attractiveness to foreign firms will improve Canada's productivity performance.

The natural question that arises from these FDI trends is, why are Canadian MNEs increasingly locating abroad and foreign MNEs locat- ing in Canada less often? These trends are reflected in Figure 1 above. Together with my col- league A. Edward Safarian at the Rotman School, I answer this question using separate models for trade and FDI " and doing the analysis simultaneously.

The comprehensive analysis takes account for traditional determinants of trade and FDI, such a GDP, GDP per capita, exchange rates, distance between countries, language and cultural similarities, and regional trade agreements. In addition, the analysis accounts for factor endowment differ- ences, R&D expenditures, financial mar- ket liquidity, government policies toward trade and investment, as well as measures of the quality of institutions. The period of coverage for this study is 1970 to 1998, and it covers Canada's bilateral relations with 29 countries.

The results that are especially of interest include the following:

The NAFTA has reduced the attractiveness of Canada as a destina- tion for foreign MNEs. Many non- North American firms now locate in the United States or Mexico, and have access to the entire North American market. This effect is very strong.

Countries that have high levels of R&D spending invest heavily in Canada. It is unclear, however, what effect Canada's R&D has had on its outward FDI. What is clear, however, is that Canada's outward FDI, on the margin, steered away from countries with high R&D intensities.

Canada's outward FDI is increas- ingly being attracted to low wage locations.

The effects of the Foreign Investment Review Agency (FIRA), which was phased out in the mid- 1980s, have been significant and reduced Canada's ability to attract FDI. The reputation effects of such policies persist for a long time.

In addition to changes in Canada's FDI patterns as presented in Figure 1, there are also important changes in the distribution of Canada's FDI bilaterally. Although the United States remains Canada's dominant FDI partner, its importance has fallen dramatically on the outward side but less so on the inward side (Figure 3). In the mid-1980s, over 60 percent of Canada's out- ward FDI was destined for the US. This has fallen to roughly 50 percent. On the inward side, there has been a steady though less dramatic decline in Canada's share of FDI coming from the United States. In short, however, coun- tries outside North America and Europe are playing an increasingly important role in Canada's FDI patterns.

Beneath the FDI trends discussed above are significant changes in its industrial distribution, especially on a bilateral basis. If we consider Table 1 (page 36). Panels A and B provide the distribution of Canada's outward and inward FDI by industry for 1983 and 1995, respectively. Panel C provides the change in the distribution by invest- ment partner. We will focus our discus- sion here on Panel C. Over the period 1983 to 1995, the share of Canada's outward FDI in the United States in Services increased by 19.2 percent, whereas the shares in natural resources and manufacturing fell by 11.1 percent and 8.1 percent, respectively. On the inward side, the share of inward FDI from the United States going to natural resources fell by 14.8 percent, whereas the shares going to manufacturing and services increased by 10.3 percent and 4.5 percent, respectively.

Canadian inward FDI is motivated by market access (services and nonser- vices), access to natural resources, and perhaps factor price differences, given the weak performance of the Canadian dollar over the period in question. It is clear from these data that natural resources are playing a decreasing role in attracting FDI into Canada. Given free trade between Canada and the United States, market access is becom- ing less important as a driver for American FDI in Canada, except of course in non tradeables (services), but even this did not grow rapidly over the 1983-95 period. In contrast, market access should play a major role in non- US FDI, although such MNEs can locate in the United States and export to Canada.

As indicated in Table 1, the share of inward FDI going to Canadian man- ufacturing has increased from all desti- nations considered, whereas the share in services is up only slightly. This may indicate that foreign MNEs are increas- ingly locating in Canada to produce manufactured goods, which in turn are used to supply both the Canadian and US markets. We also know the fol- lowing: foreign-controlled firms in Canada have twice the export orienta- tion as domestically controlled firms; foreign-controlled firms have higher productivity levels than domestic firms; and inward FDI complements capital formation regardless of the source of the inward FDI. Taken together, these data indicate that the positive impact manufacturing FDI is having on Canadian capital forma- tion, driven until recently by the low Canadian dollar and Canada's revealed comparative advantage in some manu- facturing industries, has outweighed the negative effect on capital forma- tion that is the result of a reduced importance of natural resources.

On the outward side, the impact on Canadian capital formation is very much a function of the underlying motivation. Specifically, outward FDI to the United States results in an increase in Canadian capital formation, as much of the production in the United States by Canadian MNEs use Canadian inter- mediate inputs. On the other hand, Canadian production in developing countries has resulted in a reduction in Canadian capital formation. Canadian MNEs are moving much of their low- value-added production to countries in East Asia and Latin America.

A significant productivity gap has emerged between Canada and the United States. This gap can be attrib- uted to two "œproduct innovating" industries: computers and machinery. In contrast, Canada has done well in "œprocess-innovating" low-end manu- facturing industries. That is, Canadian industries have been able to cut costs more effectively than US manufactur- ing industries. Furthermore, these are exactly the industries that experienced the largest tariff reductions in the Canada-US Free Trade Agreement. It appears from these data, therefore, that Canadian firms are expanding their manufacturing facilities in developing countries to exploit their pro- ductivity advantages in such low- value-added industries.

These manufacturing investments by Canadian MNEs in developing countries are significant. Consider the following observations. First, Canada's outward FDI is growing rapidly. Second, the share going to developing countries is increasing. Third, the share in manufacturing is up slightly (Table 1, Panel C). Therefore, these invest- ments represent a significant portion of Canadian outward investments. I argue, however, that these investments are good for the Canadian economy, despite their negative impact on Canada's levels of capital formation.

As these low-value-added activities move to developing countries, resources in Canada are allowed to move to higher-value-added activities. Therefore, in the long run, incomes, productivity and hence Canadian liv- ing standards will increase as a result. Of course, higher R&D spending and domestic productivity are important factors in ensuring that as these resources move from low- to high- value-added activities; they in fact move into the most productive activi- ties, that is, ensuring that the new jobs that are created are good jobs. This fur- ther underscores the importance of improving Canada's R&D and produc- tivity performance.

This leaves several issues of con- cern. First, why are Canadian firms gaining a productivity advantage in these low-end "œprocess-innovating" industries rather than in the high-end "œproduct-innovating" industries? Second, why are foreign firms, both US and international, increasingly locat- ing in the United States rather than in Canada? These are two trends that pose a particularly difficult challenge for Canadian policy makers.

I have argued that in order to draw policy implications from an analysis of Canada's changing FDI trends, we must first understand what impact these changing FDI patterns have had on the Canadian economy. To the extent increased Canadian investments abroad have a "œpositive" effect on the Canadian economy, then such invest- ments should be encouraged. On the other hand, to the extent the effects of such investments are negative, the underlying cause of the increased out- ward FDI must be understood in order to direct policy formulation.

Consider the following examples on the outward side. If Canadian MNEs are increasingly locating abroad for efficiency reasons such as access to unskilled labour, then such invest- ments should be seen as beneficial to the Canadian economy in the long run: domestic resources will move to higher-value-added industries as these low-value-added activities move abroad. On the other hand, to the extent Canadian MNEs are being driv- en to locate abroad " say due to a lack of skilled labour, high taxes, or a poor R&D environment in Canada " policy changes may be forthcoming to reme- dy such deficiencies.

On the inward side, Canada's reduced attractiveness to foreign MNEs as a location to undertake production should be of concern. Given the signifi- cant benefits that are derived from such investments " including capital forma- tion, job creation, and more important- ly, R&D spillovers " policy makers need to consider ways to improve Canada's attractiveness. It must be stressed that improving Canada's R&D performance will improve its attractive- ness to foreign investors. At the same time, increased foreign investments in Canada will improve its productivity. The potential benefits of improving Canada's attractiveness to foreign investors are tremendous, as have been the costs of our reduced attractiveness over the past decade.

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Increased Canadian Investment Abroad is Good for the Canadian Economy - Policy Options

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John Manley has remarked that success on the federal deficit has allowed Canada to make choices that will allow it to become a "œ"˜northern tiger' "" a preferred des- tination for knowledge workers, trade and investment, and a center of excellence in innovation, science, research and education." At the same time, Industry Canada has com- ...

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Troubling Times Ahead For The Canadian Economy! - What You Need To Know

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Troubling Times Ahead For The Canadian Economy! - What You Need To Know

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In this video a Youtube Blogger known as press for truth interviews an "Economic expert" on canada's economy and its current condition. at one point in this interview they talk about how one of the biggest issues in canada as a whole is how financially illiterate canadians are about the current state of the economy. This brings up a good point because people need to make educated decisions not for someone else but for themselves. "you do not know what you think you know" - Tom Bilyeu

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Troubling Times Ahead For The Canadian Economy! - What You Need To Know

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Capital Spending in From 2008 to 2015 in Canada

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Capital Spending in From 2008 to 2015 in Canada

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This chart shows how much has actually gone back into the canadian economy through the public and private sectors. The chart shows the importance of how private spending, and public spending differ when it comes to how much is put back into the system.

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The author of this article Pierre Cléroux starts off by saying how canada's economy has grown 3.1% from 2017, and will continue to grow. He goes on to say how even though there will be a lot of positive growth, inflation should be expected. Furthermore, even though NAFTA is being re-negotiated canada and america would still keep their alliance. Lastly now that the new trade agreement known as CETA has been established it should be known that imports and exports to and from Europe to Canada will be much easier, allowing more economic growth potential.

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Europe, the driver of global trade growth

As an open economy, Canada's performance has been and will continue to be synchronised with the rest of the global economy. In step with stronger business and consumer confidence, global trade and investment growth have finally picked up from the recent lows. Global trade is expected to reach 3.6% this year--a big jump from 1.3% in 2016, and it is forecast to touch 3.2% in 2018, according to the World Trade Organization.

Europe has been the driver of global trade growth. In fact, the contribution of European imports to global trade growth equalled that of the U.S. and China combined. Europe's economic growth is expected to reach 2.4% in 2017 and 2.1% in 2018, according to the International Monetary Fund. This is great news for Canadian exporters as they prepare to take advantage of the recently enacted Canada-European Union Comprehensive Economic Trade Agreement (CETA). CETA opens up a market of over 510 million people and that accounts for 22% of global GDP.

Now it's the right time for business owners to make the necessary investments to be more productive and more competitive.

The other two most important global economies - the United States and China - have expanded this year as well. In the U.S., households have contributed the most, while in China the transition to consumer-led growth continues to evolve. The U.S. is expected to continue its expansion next year with 2.5% GDP growth. China's economy will decelerate a little, growing 6.4% in 2018.

Higher interest rates on the horizon

A couple of uncertainties confront Canada in this rosy picture.

First, the U.S. Federal Reserve will likely raise its key policy interest rate three times in 2018, up to 2.25% by year-end, while the Bank of Canada may raise its policy rate only twice over the next 18 months, up to 1.5%. This differential means the Canadian dollar would likely lose some ground to the greenback. A falling loonie though is good for exporters to the U.S., and for the tourism industry in Canada.

But higher interest rates in the U.S. mean than borrowing globally will become more expensive, and this will have an impact on Canadian businesses. The anticipated rate hikes by the Bank of Canada will also contribute to higher borrowing costs.

NAFTA could sideswipe the loonie

The second concern is the NAFTA renegotiation. With about two-thirds of Canada's goods and services exports destined to the U.S., this is a very important market for Canadian exporters. If the NAFTA renegotiation falls apart, though, tariffs would likely return to the rates under the rules of the World Trade Organization, which are not significantly different on average for the vast majority of our trade to the United States. But because of the rather lopsided relationship, that is, Canada depends on trade with the U.S. more than the other way around, the loonie could depreciate against the dollar, by as much as 5%. Of course, this would help compensate for the higher export prices.

Oil prices are expected to range between US $50 and $65 per barrel over the course of the year, and will likely stay within this band in 2018. Increased economic activity has been positive for oil prices. The oil supply reduction agreement by OPEC and other oil producing nations, notably Russia, has drawn down inventories and helped to stabilize prices. The agreement's extension throughout 2018 will keep prices relatively stable next year. This will attract more investment to the sector, helping to spur growth in Western and Atlantic Canada.

What it means for entrepreneurs

The world economy is expanding and this offers incredible opportunities for Canadian entrepreneurs to position themselves for growth and take advantage of the global momentum. There are headwinds, but a lower dollar will continue to be advantageous for Canadian exporters. With interest rates still low, now it's the right time for business owners to make the necessary investments to grow, be more productive and more competitive.

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2018 Economic outlook for the Canadian economy

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As an open economy, Canada's performance has been and will continue to be synchronised with the rest of the global economy. In step with stronger business and consumer confidence, global trade and investment growth have finally picked up from the recent lows.

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In this video Amanda Lang talks about how back in the 90s more of canada's infrastructure was privately owned by canadian, but nowadays most if not all of our infrastructure is owned by the government. Amanda went on to say how "this type of system does not give canadians a chance".

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What I love about this article is how much detail to goes into describing where canada stands alongside other countries. It has charts, and graphs for the global infrastructure, inflation, GDP, Real GDP, Government budget, annual employment, and corporate tax. I bring this up because this website does a great job in illustrating where canada's economy lands next to the other countries, showing how it ranks comparatively high.

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Investment Strategy and Analysis Division, Office of the Chief Economist
Global Affairs Canada
1. EXCELLENT ECONOMIC FUNDAMENTALS

Despite the global slowdown, Canada's economic prospects are strong, based on a consensus of forecasts.

According to Consensus Economics, Canada has been a strong performer among G7 countries in GDP growth during the 2013-16 period and is expected to continue this trend through 2017-19.
Figure 1-2
Source: OECD Economic Outlook, No. 102, November 2017.

Other forecasts also highlight Canada's strong economy...

Similarly, according to the OECD, Canada's real GDP growth from 2013-2016 ranked high among G7 countries and is forecast to be the highest in the G7 in 2017-2019.

Canada also has strong employment growth...

Canada's employment performance since 2007 has been a strong second in the G7.

Canada has recovered more than all of the jobs lost during the 2008-2009 recession.

Almost 1,898,400 more Canadians are working today than when the recession ended in June 2009 and employment is about 1,471,900 above the pre-recession peak recorded in October 2008. Over 80% of the positions created since June 2009 have been full-time with over 80% in the private sector.
Figure 1-5
*Total government budget includes federal, provincial/state and municipal budgets.

Source: OECD Economic Outlook, No.102, November 2017.

Text Alternative Figure 1-5

...strong fiscal performance...

Despite posting a deficit of 1.9% of its GDP in 2016, Canada's fiscal position is still forecast to be better than most G7 countries during 2017-2018, with an overall deficit of 1.5% of GDP.
Figure 1-6
Source: IMF World Economic Outlook, October 2017.

...the lowest net debt in the G7...

In 2016, Canada had the lowest net debt-to-GDP ratio in the G7 and the 2 nd lowest in the G20 in 2016. It will continue to hold this standing during the 2017-2018 forecast period.
Figure 1-8
* The Legatum Prosperity Index ranks countries based on 104 variables grouped into 9 sub-indexes which are averaged using equal weights. The sub-indexes are: economic quality; business environment; governance; education; health; safety & security: personal freedom, social capital and natural environment. Source: Legatum Institute, London, November 2017

...an overall environment of prosperity...

According to the Legatum Prosperity Index*, Canada ranks first in the G7, first in the G20 and eighth among 149 countries in terms of overall prosperity, based on material wealth and personal wellbeing.

...and a high degree of social progress.

Canada ranks first in the G7, first in the G20 and sixth overall in a 128-country study of social progress - defined as a society's capacity to meet the basic human needs of its citizens, establish the foundations that allow citizens and communities to enhance and sustain the quality of their lives, and create the conditions for all individuals to reach their full potential.

2. A Highly Competitive Business Environment
Figure 2-1
Source: The Economist Intelligence Unit, March 2018

Canada is acclaimed by the EIU for its superior business climate...

Canada understands the importance of its business community and has created an environment to encourage its success.

Canada is the 3 rd best country in both the G7 and the G20 for doing business over the next five years, according to the Economist Intelligence Unit (EIU).

Canada ranks eighth among 82 countries in the Economist Intelligence Unit's global business rankings for the forecast period (2018-2022).

The country ranks well for its infrastructure, market opportunities, foreign trade and exchange and low tax rates.

...and by Forbes.

Canada ranked second in the G20 and stood fifth overall in Forbes' latest 153-country annual study, The Best Countries for Business.

Canada ranks particularly well on several study elements, including degree of personal freedom (first overall) and red tape involved in starting a business (second overall).

Canada has high potential for investment and growth in infrastructure.

Canada ranks first in the G7 and fourth overall in a recent study measuring a country's potential for investment and growth in its economic infrastructure.*

...and takes relatively less time.

In Canada, it takes fewer days to establish a new business than it does in any other G7 country.
Figure 2-6
Source: Finance Canada, January 2018

Text Alternative Figure 2-6

Canada has relatively low corporate income tax rates.

Canada has the third-lowest statutory corporate income tax rate in the G7 in 2018.
Figure 2-7
Source: KPMG Competitive Alternatives 2016

Text Alternative Figure 2-7
Percentage Cost Advantage (Disadvantage) Relative to the United States

Canada has the lowest business costs in the digital and research & development sectors.

Canada is the lowest cost G7 country in the Digital and Research & Development sectors.

Of the two industries in the Digital sector, Canada is the lowest-cost G7 country in both the Digital Entertainment and Software Design industries.

Among the industries comprising the Research & Development sector, Canada is the lowest-cost G7 country in all three: the Biotechnology, Product Testing and Clinical Trials industries.
Figure 2-8
Source: KPMG Competitive Alternatives 2016

Text Alternative Figure 2-8
Percentage Cost Advantage (Disadvantage) Relative to the United States

Canada is also highly cost-competitive among the G7 in the manufacturing and corporate-services sectors.

Canada is the lowest-cost G7 country in the manufacturing sector and the corporate-services sector.

Canada is the lowest-cost G7 country in all 12 manufacturing-sector industries: aerospace, agri-food, automotive, chemicals, electronics, green energy, medical devices, metal components, pharmaceuticals, plastics, precision manufacturing and telecommunications.

Canada is the lowest-cost G7 country in both corporate-services sector industries: professional services and support services.

...and has sound financial institutions.

Investors can take comfort in the fact that Canada's banking system is ranked 2nd in the world and is soundest in the G7.

Five of the world's 50 safest banks are in Canada, according to a recent study**: Toronto Dominion Bank (19 th), Royal Bank of Canada (23 th), Caisse Centrale Desjardins (34 th), Scotiabank (48 th), Bank of Montreal (50 th)

3. A Dynamic Workforce
Figure 3-1
Source: OECD, Education at a Glance, September 2017

Text Alternative Figure 3-1
Percentage of Individuals Aged 25-64 Having Attained Tertiary Level Education
Top OECD Countries

Canada has one of the world's best-educated talent pools and some of the best universities...

Canada's talent pool is the most highly educated among OECD member countries, with over half of its population aged 25-64 having attained tertiary-level educations.

The 2017-2018 edition of the U.K.-based Quacquarelli Symonds (QS) rankings places four Canadian universities among the top 100 in the world: University of Toronto 31 st; McGill University 32 nd; University of British Columbia 51 st and the University of Alberta 90 th.

...superior management training...

Canada stands second in the G7 in a study measuring the extent to which management education meets the needs of the business community (see chart).

In addition, three Canadian schools of management rank among the top 100 in the world according to the Financial Times (UK) Global MBA rankings for 2017: University of Toronto (Rotman) 65 th, Western University (Ivey) 94 th, Queen's University (Smith) 100 th

...and a readily available army of qualified engineers.

The availability of qualified engineers in the labour force in Canada is greater than in any other G7 country except France, according to a Institute for Management Development (IMD) survey.
Figure 3-4 PISA Score (Points - Standing Among G7 Countries)
Source: OECD: Program for International Student Assessment (PISA) 2015 - Released December 6, 2016

Canada is also a world leader in academic performance among youth...

Among the three subject areas (reading, science and mathematics) surveyed in the OECD Program for International Student Assessment (PISA), Canadian schoolchildren rank first in the G7 in reading and second in each of science and mathematics.

Among the 72 countries and economies that participated in PISA 2015, Canadian schoolchildren ranked 3 rd in reading, 9 th in science and 10 th in mathematics. The rankings compare to 9 th, 10 th and 13 th, respectively, in 2012.

The annual PISA survey involves a total of over 540,000 pupils in 72 countries and evaluates the capacity of 15-year olds to understand and solve academic problems.
Figure 3-5
*The Global Entrepreneurship Index ranks countries based on 3 sub-indices: entrepreneurial attitudes, entrepreneurial abilities and entrepreneurial aspirations standing on 14 pillars: opportunity perception, start-up skills, risk acceptance, networking, cultural support, opportunity start-up, technology absorption, human capital, competition, product innovation, process innovation, high growth, internationalization and risk capital.

Source: Global Entrepreneurship Index 2018 - The Global Entrepreneurship and Development Institute, November 29, 2017

...and has one of the world's best business climates for entrepreneurs.

According to the Global Entrepreneurship Index*-a measure of the health of a country's entrepreneurship ecosystem-Canada ranks second in the G7 and third among 137 countries.

Canadian policymakers are better equipped than those in most economies to implement policies that support entrepreneurship innovation, productivity and job creation.
Figure 3-6
Source: IMD, * Rank among 63 economies considered in the World Competitiveness Yearbook 2017.

Text Alternative Figure 3-6

Canada is a leader in computer ownership and Internet use.

Canada has a technology-savvy population and workforce. It ranks third in the G7 for the number of Internet users per-capita and third in the G7 for the number of personal computers per capita.

4. A PROMISING VENUE FOR INNOVATION & INVESTMENT

Canada has a high level of R&D investment in higher education...

Canada is a world leader in post-secondary research, outpacing other G7 countries on higher education investment.

...with solid investor protection...

Canada is ranked second in the G7 and seventh out of 127 countries, by the Global Innovation Index for the ease of investor protection.

...creating a business recognized investment environment.

Canada demonstrates strong FDI attraction performance as measured by FDI stock as a share of GDP.
Figure 4-4
* At book value, $CAD

Source: Statistics Canada, CANSIM table 376-0051, April 25, 2017

Canada's globalized economy is driven by a dynamic two-way investment process...

Over the past decade, Canada has witnessed substantial growth in both inward and outward FDI, reflecting its strong connection to global supply chains.

Canada's inward FDI stock increased from C$512 billion in 2007 to C$826 billion in 2016.

Canadian direct investment abroad (CDIA) increased from C$515 billion in 2007 to C$1,050 billion in 2016.
Figure 4-5

Text Alternative Figure 4-5

SHARE OF TOP 10 SOURCES OF FDI STOCK IN CANADA - 2016 (%)

United States: 47.5

Netherlands: 11.3

Luxembourg: 7.1

Switzerland: 6.7

United Kingdom: 5.1

Japan: 3.5

Brazil: 2.8

China: 2.6

Germany: 1.9

Hong Kong 1.5

All others: 10.1

SHARE OF TOP 10 DESTINATIONS OF FDI STOCK FROM CANADA - 2016 (%)

United States: 45.2

United Kingdom: 9.3

Barbados: 6.5

Luxembourg: 5.7

Cayman Is.: 4.6

Bermuda: 3.8

Netherlands: 2.6

Australia: 2.5

Bahamas: 1.9

Mexico: 1.6

Other: 16.3

Source: Statistics Canada, CANSIM table 376-0051, April 25, 2017
Figure 4-6
Source: Statistics Canada, CANSIM table 376-0052, April 25, 2017, * North American Industry Classification System (NAICS)

Text Alternative Figure 4-6

...and overall FDI geared toward industries with strong competitive advantages.

Almost 80% of foreign investment in Canada is in four main industries: manufacturing, mining and oil and gas extraction, management of companies and enterprises, and finance and insurance.

...making Canada a leader in FDI attraction.

Since the financial crisis and ensuing global downturn, Canada has outperformed major global economies in attracting FDI: From 2012-2016, Canada was the largest recipient of per capita inflows among G-7 countries and the second largest in the G-20 following Australia.

5. EASY ACCESS TO MARKETS
Figure 5-1
Source: Statistics Canada and Transport Canada, 2017

Canada has a streamlined trans-border transportation system...

The North American market is served by a well-integrated transportation system, which is among the world's best.

Automated permit ports, transponder-identification systems and joint processing centres are being tested and deployed for easy movement of goods.

Bottom line: the border system is one of the world's most efficient.

Figure 5-2
* Source: IMF World Economic Outlook, October 2017.
Figure 5-3
Source: IMF World Economic Outlook, October 2017.

...excellent global market access for businesses...

With the Canadian-European Union Comprehensive Economic and Trade Agreement (CETA) provisionally in force, firms operating in Canada have preferred market access to 45 foreign countries.

Canada's preferred market access represents over 1.2 billion consumers and over US$41.4 trillion or 55% of global GDP.

Ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will expand Canada's preferred market to over 1.5 billion consumers and over US$48.6 trillion or almost two-thirds of global GDP.

Canada's market access is supported by a reliable and efficient transportation system, providing for effective Canadian business participation in global supply chains.

...facilitated by efficient transport linkages tying North America
to Asia and Europe.

Canada's Gateways offer an integrated and efficient transport network that spans from coast to coast, reaching deep into North America's economic heartland. The Gateways' strategic locations offer the most direct routes to and from Asia and Europe.

Sailing times from Canada's Atlantic and Pacific deep-water ports are up to two days shorter than from other North American ports.

6. An Excellent Place to Live

Canada's overall quality of life is one of the world's best.

Canada ranks first in the G7 and fifth among the 35 OECD countries in terms of overall living conditions and quality of life.

Canada has one of the highest standards of living among G7 countries...

Canada has one of the world's highest standards of living, ranking second in the G7 and third in the G20, as measured by Gross Domestic Product (GDP) per capita.
Figure 6-3
Source: Mercer Human Resources Consulting: March 2018

...an exceptional quality of life in its cities...

In a recent annual ranking of the quality-of-life in 231 cities, four Canadian cities are among the top 25.

...and an impressive overall reputation on the global stage.

The Reputation Institute ranked Canada first among 55 countries, based on its good quality of life, a safe place to live, an advanced economy, an effective government and an appealing environment.

Canada ranks high among model nations of peace...

According to the Global Peace Index, a recently released measure by the Economist Intelligence Unit, Canada stands first in both the G7 and the G20 and eighth among 163 countries surveyed.

...and vibrant democracies.

According to the Economist Intelligence Unit's Democracy Index, Canada stands first in both the G7 and G20, and sixth among 167 countries surveyed.
Figure 6-7
Source: IMD

*Confidence that person and property is protected. Rank among 63 economies considered in the 2017 World Competitiveness Yearbook.

**Degree of fairness of the judicial system in Society. Rank among 63 economies considered in the 2017 World Competitiveness Yearbook

Text Alternative Figure 6-7

Canada is also a safe and just society...

Canada is a G7 leader in terms of safe places to live and to conduct business under a fairly administered
judicial system.

...a land of equal opportunity...

Canada ranks first among G7 countries in providing equal opportunities to individuals.
Figure 6-9
*Based on mother tongue
Source: Statistics Canada, 2011 and 2016 Census , Released August 2, 2017.

Canada: Solid Reasons to Invest

Canada's economic fundamentals and relative cost advantages provide a first-rate business environment.

Canada offers:

Excellent Economic Fundamentals

Low inflation and low interest rates

One of the strongest economies in the G7

A Highly Competitive Business Environment

Ease in establishing and conducting a new business

Competitive business costs

Competitive tax system

Strong financial and technological environment

A Dynamic Workforce

One of the world's best-educated internationally-oriented workforces

Quality management training

Technology-savvy workers

A Promising Venue for Innovation and Investment

World leader in post-secondary research

Easy Access to Markets

Geography and NAFTA provide easy access to the world's most prosperous markets

Highly efficient transportation linkages with Asia and Europe

An Excellent Place to Live

Superb overall quality of life

A society rich in multiculturalism

Invest in Canada

Through Canadian diplomatic missions around the world, and with direct access to investment contacts at national, provincial and municipal levels within Canada, the Investment & Innovation Bureau of Global Affairs Canada is well positioned to assist you with your investment in Canada. We invite you to start exploring all that Canada has to offer at: www.investincanada.com

For further information, please contact our investment specialists at your local Canadian Embassy, High commission or consulate:
www.tradecommissioner.gc.ca

Or write to us at:
investincanada@international.gc.ca

Think Canada! is prepared by Arif Mahmud, Investment Strategy and Analysis Division, Office of the Chief Economist, Global Affairs Canada

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Investment Strategy and Analysis Division, Office of the Chief Economist Global Affairs Canada According to Consensus Economics, Canada has been a strong performer among G7 countries in GDP growth during the 2013-16 period and is expected to continue this trend through 2017-19. Figure 1-2 Source: OECD Economic Outlook, No.