CANADA – STRONG; STABLE; SUSTAINABLE Canada Market Overview November 2010 Alireza Rafiee Director, Market Development Austrade Toronto
CANADA – STRONG, STABLE, SUSTAINABLE OVERVIEW • WHY CANADA! • MINING, OIL & GAS OPPORTUNITIES • AUSTRADE PROJECTS AND EVENTS • HOW WE CAN HELP YOU
Yet both nations have a lot of strengths • Both survived the GFC relatively well • Both have well regulated financial services sectors • Both have excellent universities • Both have active research programmes • Both are resources rich • Both have growing services sectors
WHY CANADA Solid fundamentals: Canada has a lot to offer as a business partner: • Open economy – receptive to new ideas/approaches • an open and attractive free enterprise environment, ranked by the Economist Intelligence Unit as the best place to do business in the G-7 this year and over the next four years; • the strongest fiscal position in the G-7; • low corporate taxes, with the lowest overall tax rate on new business in the G-7; • among the fastest rates of economic growth in the G-7 in 2010 and 2011, according to the International Monetary Fund; • a skilled workforce, • a high quality of life; • Strong import culture • Relatively short supply chains; • a vibrant environment for innovation, with one of the most advantageous research and development tax incentive programs in the industrialized world; and • a strong commitment to good governance and the rule of law.
Positive Business Climate Business Environment of Top Ten Countries, Rank for Forecast Period 2008-2012 1st 2nd 3rd 4th 5th Rank 6th 7th 8th 9th 10th Denmark Finland Switzerland Netherlands Australia Singapore Canada Hong Kong U.S.A. Sweden
The Economist Intelligence Unit's Business Environment Rankings The Economist business rankings model measures the quality and attractiveness of the business environment in the 82 countries It examines ten separate criteria or categories: political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labor market and infrastructure. Source: The Economist Intelligence Unit, April 2008
The Economist Intelligence Unit's Business Environment Rankings - Canada Positive Business Climate Business environment ranks and scores 2008 – 12 2003 - 07 Change Denmark 1 2 1 Finland 2 3 1 Singapore 3 1 -2 Canada 4 5 1 Switzerland 5 7 -2 Hong Kong 6 6 0 Netherlands 7 8 1 Australia 8 12 4 USA 9 4 -5 Sweden 10 11 1
Ease in Establishing a Business • Canada ranks first among the G-7 for the fewest number of days required for establishing a new business. Duration (days) 25 23 20 18 14.9 15 13 13 10 7 6 5 3 0 Canada U.S. France U.K. Italy OECD Germany Japan Average
Canada’s over heavy reliance on the US • 73% of Canada’s mercantile export trade is with the US and 62% of imports – ($270 billion vs $186 b) • Services trade is similar: 52% and 56% • Growth in bilateral trade between Canada and the U.S. has averaged almost 6.0% annually over the last decade • US alone was responsible for 82% of decline in Canada’s exports and 62% imports during the GFC • The United States is also the largest foreign investor in Canada and the most popular destination for Canadian investment • The reasons are obvious: – Of Canada’s 20 largest cities, 17 are within a two hour drive to the US border – Canadian production hubs closer to U.S. markets than many American production sites – US Canada (and Mexico) FTA – Open, integrated economy (esp in autos and food) – Disproportionate size of US cf Canadian companies
And on European Union, but less with Asia • 10% of Canada’s mercantile export trade is with the EU and 12% of imports • Services trade is : 9% and 10% • But a limited trade with Asia: – Canada’s exports to rest of the world were 19% and imports 26% – And services, 29% and 27% – ($11 billion exports to China; $39 bn imports) – ($2 bn each way to India) • Canada is aware of the need to diversify its trade markets to Asia: “Canada cannot afford to waste one minute in turning those numbers around,”. “Despite massive fiscal and monetary stimulus, the West is still struggling with slow growth, high government and consumer debt, and stubborn unemployment levels. Meanwhile, the emerging economies of Asia are now resuming their pre- recession growth and employment levels. That’s why helping Canadian companies to take advantage of opportunities in Asia is critical.” Export Development Canada
Canada – Australia – a natural fit! More like Home than Away! • Similar population size and GDP per capita ($46,500) • Similar culture and business practices • Similar government structure and policies • Same legal system • Similar sized businesses • Relationship based business • Largely urban-based population, spread thinly along US border. • Large empty interior • Strong mineral and agricultural base to economy • Strong import culture; generally open markets • Multi-cultural society • As small countries with a population of only 22 and 32 million we have to make our way in the world and that will be best achieved by building a competitive business environment through cooperation and investment in each others markets
Austrade Canada • 1 Canada team 78+ years of Austrade experience in marketing team 3 marketing teams (cover all Canada) • Energy, Mining, Environment Team • Education and Financial Services Team • Agriculture, Food & Wine 1 Consular team (covers all Canada) • 9 Marketing + 4 Consular + 1 Office Manager • 3 locations (Vancouver, Toronto & DM in Montreal)
Canada – Australia Connection 2-way ay trade is $C4.2+ billion • Approx. 2,000 Australian companies export to Canada • Each ranks in the other’s Top 20 trading partners • Major imports from Australia – alumina, wine, medical products, nickel ores education services and business services • Major exports to Australia – telecom equipment, pork, iron ore, aircraft parts, professional and business services 2-way ay investm tment nt is around d $C40 billion ($30 Aus; $10 Can) • Over 80 Australian companies have established offices in Canada • Canada is Australia’s 3rd largest investment destination with mining, infrastructure, retail, finance, and technology leading the way • Major Canadian investors in Australia, both for our domestic market and as a base for Asia/Pacific
Leading Investors Canadian ans in A Austral alia Austral alian ans in C Canada Barrick Nortel Amcor Rio Tinto Brookfield Asset Mitel Orica BHP Management RIM Ansell Macquarie Group CAE Enerflex Brambles Plenary Group Bombardier Apotex Bradken Worley Parsons CHC Helicopters BRP (Bombardier Pharmaxis Ausenco Hatch Recreational Products) NAB/Presima Transfield Golder Teck Cominco Stirling United Group SNC Cameco Products Computershare Gemcom Billabon g Uranium One ALS Labs ATCO Power Lend Lease ATCO Structures Ivanhoe Flight Centre McCain Foods Lululemon Sentient Bakers Delight Trans Alta Bioniche Caroma Packer Casinos RBC Capital Markets Institutional Investors GHD Charles Sturt Viterra (CPP, Ontario Teachers, University Nupress CGI Caisse, etc.) Navitas Silver Thomas Pratt & Whitney Canada Hanley Swann sinos Architects 17
Austrade’s priority sectors in Canada • Education and University R & D collaboration and commercialisation • Clean Tech – Renewable Energy • Mining and Oil & Gas technology and services • Financial Services • Wine
Mining sector – Canada Snapshot • Canada is the fifth largest energy producer in the world • Canada is the world’s 3rd largest natural gas producer • Canada is the world’s 8th largest crude oil producer • Canada is the largest supplier of energy to the United States • Canada, with 179 billion barrels in oil sands reserves, ranks 2nd only to Saudi Arabia in global oil reserves • Canada rank among the top five countries in the production of 14 major minerals and metals
Mining sector – Canada Snapshot • Mining in all provinces • Mining industry contributed $42billion to Canada’s GDP in 2007 – $10 billion in mineral extraction – $32 billion in mineral processing and manufacturing • The industry employs 363,000 Canadians • The industry accounts for 19% of annual Canadian goods exports
Inflation Comparison - Canada / Australia / USA Annual Inflation 7.0 6.0 5.0 Inflation Rate (%) 4.0 3.0 2.0 1.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 Canada USA Australia
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