Investing in Canada
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Investing In Canada
Investing In Canada – Factors that are attractive for direct investment in
Canada.
Canada is the second largest country in the world, occupying close to 10 million
square kilometres of land bounded by the Atlantic, Pacific and Arctic oceans.
Canada shares a 6,000 kilometre border and the five largest freshwater lakes in
the world with the United States. Known as the Great Lakes, they provide a route
to the Atlantic via the St.- Lawrence Seaway, permitting direct access to
international markets.
More international companies are investing in Canada. The stock of foreign
direct investment (FDI) in Canada has increased steadily over the past five
years to reach over $130 billion last year. Investor confidence is high.
International companies are discovering what firms in the United States have
known for decades: it pays to invest in Canada. There is a government commitment to attract foreign direct investment. Canadas government provides a competitive, welcoming climate for international business. It is committed to fiscal responsibility, deficit reduction and job creation.
The following are some essential points all of which prove Canada is a favorable
choice: Domestic market; wage competitiveness; work force quality; International business skills; raw materials; energy costs; infrastructure; business services and legal environment.
Domestic Market
Canadas per capita purchasing power is second only to that of the United States,
among the G-7 countries, and the OECD expects Canada to lead the industrialized
countries in near-term economic growth. Inflation is below two per cent and
forecast to remain low. Cost of money is lower than it has been for decades.
Exports are at record high, having increased by 14 per cent in 1993 over 1992.
Under free trade, Canadian-based companies have increased their market share of
the Canada-U.S. market. Further, the Canada-U.S. Free Trade Agreement (FTA),
together with the North American Free Trade Agreement (NAFTA) which came into
force on January 1, 1994, gives Canadian-based companies an unparalleled access
to 365 million people, forming an economy larger than that of the European
Community. The combined 1993 GDP value of the Canada-Mexico-U.S. market was in
excess of $8.5 trillion.
Competitive Wages and Benefit Rates:
Many international corporations find the Canadian work force to be highly cost-
effective. On average, wages in Canadas business centers are lower than those
in nearly all major business centers around the world. Hourly wages of Canadian
production workers have risen only 5.4 percent since 1990. Canadian
manufacturing wage rates showed the second slowest growth among G-7 countries in
1992, averaging 2.6 percent. In contrast, hourly increases in Britain and
Germany have been 12.4 and 14.3 percent, respectively.
Educated and Skilled Work Force
The cost-effectiveness of the Canadian work force becomes especially apparent in the high level of skills and education of the workers. Canada leads the G-7
countries in advanced education, with about two-thirds of its 20 to 24-year-olds
enrolled in post-secondary education.
Canadas 67 universities and colleges produce more than 25,000 graduates
annually in engineering, the applied sciences, the physical sciences and
mathematics, while its technical institutes provide 11,000 graduates annually in
areas relating to electronics and telecommunications.
Canadian operations enjoy low turnover and absenteeism rates, and the days lost
to work stoppages have been cut by more than one-half in the past two years.
Major international firms have also won many productivity improvements in their
Canadian operations through work place initiatives in labor-management relations.
International Business Skills
Canada is a land of immigrants. Employers will find pools of experienced
workers who also offer fluency in foreign languages, knowledge of international
cultures and business practices, and networks of business contacts in the key
Asian, European and American markets. Canada is an effective bridge between
North America and Europe. Canadian business practices and laws are a blend of
American and European cultures. Canadas metric system of measurement means that
Canadian manufacturers can readily meet requirements for European standards and
measures. In addition, new government initiatives, such as the Skill Investment
Program, are further enhancing Canadas ability to train and retrain workers for
tomorrows growth industries.
Abundant Raw Materials
Canadas rich mineral reserves and natural resources,