What is Canada's absolute advantage?

Answer 1

Canada welcomes foreign investment that contributes to its economic growth, jobs, innovation, competitiveness and long-term prosperity. Between 2001 and 2010, Canada was the world's eighth-largest destination for inbound foreign direct investment.

Canada's strong economic fundamentals and world-leading competitive advantages make Canada an investment destination of choice for global investors. These advantages include:

Strong economic growth: Throughout the global economic downturn, Canada proved to be a top-performing economy offering businesses opportunities to grow, innovate and succeed. The International Monetary Fund predicts that, after the United States, Canada will have the fastest economic growth in the G-7 in 2012. Canada has also recorded the fastest employment growth in the G-7 since mid-2009, fully recovering all the jobs lost during the recession.

Fiscal strength: Canada entered the global recession with a strong record of balanced budgets and low debt. Canada has the strongest fiscal position in the G-7 and among the best fiscal prospects in the G-20. Canada is set to return to budgetary balance over the medium term. The federal debt-to-GDP ratio stood at 33.9 percent in 2010-11, and it is projected to decline to 31.7 percent by 2015-16.

Financial stability: Canada's strength is underpinned by the world's most stable financial sector, as affirmed by the WEF. At a time when financial institutions around the world were collapsing, no Canadian bank or insurer failed, and none required bailouts. Global Finance magazine has affirmed that six of the top 10 safest banks in North America are Canadian.

Lower business costs and taxes: Canada offers a low-cost, low-tax environment. Canada's overall tax rate on new business investment is substantially lower than that of other G-7 countries. Canada has a combined federal-provincial statutory general corporate income tax rate of 26 percent, below the level of most other G-7 countries and about 13 percentage points lower than that of the United States. Canada is the first among G-20 members to make itself a tariff-free zone for manufacturers by eliminating tariffs on manufacturing inputs, machinery and equipment.

An excellent place for research and innovation: Canada offers a winning environment for research and innovation, including world-leading R & D infrastructure, innovation incentives and scientific talent. Canada has the G-7's highest expenditures on research and development done in institutions of higher education, when measured as a share of GDP. Canada offers one of the most generous R & D tax incentives in the industrialized world. Combined federal and provincial credits can save foreign investors, on average, up to 30 percent of investment in R & D in Canada.

A competitive workforce: Canada is home to a highly educated, flexible and multicultural workforce that is well suited for today's knowledge-based economy. Canada has one of the world's best-educated workforces with the second-highest proportion of post-secondary graduates in the Organisation for Economic Co-operation and Development (OECD). Canada ranks second in the G-7 and fourth in the world for the quality of its management schools, according to the World Economic Forum.

A great place to live, study or work: Canada's high quality of life provides a great backdrop for the success of individuals, families and globally engaged companies. According to the OECD's Better Life Index, Canada has the highest quality of life in the G-7 and second-highest in the OECD. The Economist Intelligence Unit ranks Vancouver, Toronto and Calgary among the world's top five cities for liveability.

A gateway to the world: With the shortest sailing time between Asia and North America, Canada offers businesses assured access to a lucrative North American market of nearly 450 million consumers. Canada has major International Shipping ports on both the Atlantic and Pacific coasts (Halifax, Vancouver and Prince Rupert) and along the Great Lakes/St. Lawrence Seaway (Montreal). Seventeen of Canada's 20 largest cities are located within a 90-minute drive of the Canada-U.S. border.

http://www.fin.gc.ca/n12/data/12-009_1-eng.asp