Wayne Robson, Senior Trade Commissioner Consulate General of Canada in Chicago investincanada.com investiraucanada.com Canada and Japan Trade ▪ $26.5 billion in bilateral trade (2016) ▪ Canada → Japan ▪ $10.7 billion (copper, canola, coal, lumber, pork) ▪ Japan → Canada ▪ $15.8 billion (autos and auto parts, machinery, medical and scientific instruments) 2 Japanese Investment In Canada ▪ Largest source of investment from Asia/Oceania countries ▪ Increased from $5.2 billion in 1990 to $29.1 billion in 2016 ▪ 450 Japanese subsidiaries and affiliate companies in Canada ▪ According to JETRO’s 2016 survey of Japanese companies in Canada: ▪ Over 40% plan to expand their business in the next 1-2 years ▪ 28.2% increased local employment in 2016 and 28.4% have plans to increase local employment in the future ▪ Anticipated growth areas: clean tech, renewables, life sciences, electric vehicles and related technologies, ICT A relationship that matters ! 3 Canada has a first-rate business climate Canada has a compelling story for …and they are responding investors… positively to our business climate ▪ Best place in the G-7 to do business over the next five years (2015-2019) “We are very bullish on Canada … it has a very strong - Economist Intelligence Unit appetite for innovative mobile and networking solutions and it’s a great place to work at the forefront of ▪ World’s soundest banking system technological development.” - World Economic Forum - Stephanie Buscemi, VP Marketing, SAP ▪ G-7’s lowest net debt-to-GDP ratio by a wide margin “Congrats to all of the great Canadian businessmen & ▪ G-7’s lowest business costs women here today. Canada has figured it out.” - KPMG - Jack Welch, former CEO of General Electric ▪ One of the lowest corporate tax rates in the G-7 “When you want to serve a highly-complex global ▪ Highly educated and diverse workforce industry like aerospace, you need critical mass, a highly- skilled and diverse workforce and willing government ▪ A desirable place to live, work and locate partners. We found all of that in Canada.” - Robert Cremin, Chairman, Esterline Technologies 4 WHY INVEST IN CANADA? I Excellent Economic Fundamentals II A Highly Competitive Business Environment III A Dynamic Workforce IV A Promising Venue for Innovation & Investment V Easy Access to Markets VI Initiatives and Programs 5 I EXCELLENT ECONOMIC FUNDAMENTALS Canada’s 2017 economic growth estimate tops G7 – IMF (3%), OECD (3.2%) Real GDP Growth and Projections (%) ▪ Canada’s real 2013-2016 2017-2018 GDP growth is forecasted to be 3.0 2.6 the highest in the G7 in 2017-2018 2.3 2.2 2.1 2.0 (OECD). 2.0 1.9 1.3 1.4 1.4 1.2 ▪ Oct 10 update: 1.1 OECD raised 1.0 0.9 0.9 forecast to 3.2% (%) Percent and IMF raised to 0.0 3% - highest in 0.0 G7. -1.0 Canada U.S. U.K. France Italy Germany Japan Source: OECD Economic Outlook, No. 101, June 2017. 7 Leads G7 countries in long-term GDP growth Real GDP Growth in G7 Countries (%) ▪ Long-term real GDP 2007-2016 growth place Canada 2.0 at the top of the G7 over the last decade 1.5 1.5 1.3 (OECD). 1.2 1.1 ▪ Canada’s real GDP 1.0 growth is also well 0.7 above the EU 0.6 0.5 average. 0.5 Percent (%) Percent 0.0 -0.5 -0.6 -1.0 Source: OECD Economic Outlook, No.101, June 2017. 8 Strong employment growth Employment Growth (%) ▪ Second highest 2007-2016 employment performance in the Germany 1.25 G7 since 2007 ▪ 1.8 million more Canada 0.99 Canadians are working today than U.K. 0.86 when the recession ended in June 2009. U.S. 0.49 France 0.33 Japan 0.12 Italy 0.02 Sources: OECD Economic Outlook, No.101, June 2017 and Statistics Canada, CANSIM tables 282-0087 and 282-0089, September 8, 2017. 9 II A HIGHLY COMPETITIVE BUSINESS ENVIRONMENT Best country in the G7 and G20 to do business – rank by EIU Business Environment of the G7 Countries ▪ Canada is the best Rank for Forecast Period 2017-2021 country in both the st G7 and the G20, 1 and third overall, for 2nd doing business over 3rd the next five years 4th (Economist Intelligence Unit). 5th 6th ▪ Canada ranks well Rank for its infrastructure, 7th market opportunities, foreign trade and exchange and low tax rates. Canada U.S. Germany U.K. France Japan Italy Source: The Economist Intelligence Unit, September 2017 11 …and by Forbes. Top 10 Countries in the G20 for Business ▪ Canada ranked 2017* second in the G20 in Forbes’ latest 1st study, The Best 2nd Countries for 3rd Business. 4th 5th ▪ Canada ranks well 6th on degree of 7th personal freedom Rank 8th (first overall) and 9th red tape involved in 10th starting a business (second overall). *Chart based on analysis of country rankings. Country rankings are based on the following eleven categories of quantitative and qualitative indicators: trade freedom, monetary freedom, property rights, innovation, technology, red tape, investor protection, corruption, personal freedom, tax burden and market performance. 12 Source: Forbes Publishing, December 2016. Canada has the lowest business costs among G7 countries… Percentage Cost Advantage Relative to the ▪ Canada has the United States, G7 Countries lowest business 20 costs among G7 countries (KPMG). ▪ Canada’s cost 14.6 advantage is 14.6% 15 lower than the United States. 10.7 10 9.5 9.1 Percent (%) Percent 7.7 7.3 5 baseline 0 Canada Italy France U.K. Germany Japan U.S. Source: KPMG Competitive Alternatives 2016 13 Lowest total effective tax rate in the G7… Total Effective Tax Rate* (% of commercial ▪ Canada ranks first profit) 2017 in the G7 and 70 second in the G20 for the lowest total 62.8 62.0 effective taxes 60 borne by 48.9 48.9 companies (PWC). 50 44.0 40 30.9 30 Total Tax Rate % Rate Tax Total 21.0 20 10 France Italy Japan Germany U.S. U.K. Canada * calculated as sum of profit (corporate) taxes, labour taxes and other taxes as a percentage of commercial profit (profit excluding all taxes paid) Source: PriceWaterhouseCoopers. Paying Taxes 2017 14 …including relatively low corporate income tax rates... Statutory General Corporate Income Tax Rates in the G7, 2017 ▪ Canada has the second-lowest statutory corporate 45 income tax rate in 40 38.9 the G7 in 2017. 34.4 35 30.2 30.0 30 27.8 26.7 25 20 19.0 Percent (%) Percent 15 10 Source: OECD Tax Database, April 2017 15 …making Canada the most tax-competitive country in the G7. ▪ Canada’s total tax Total Tax Index* index is 52.4%, lowest 160 in the G7 (KPMG). 136.6 140 120 108.2 110.5 97.9 100.0 100 80 64.5 60 52.4 40 20 0 Canada U.K. Germany U.S. Japan Italy France * A measure of the total taxes paid by corporations in a particular location expressed as a percentage of total taxes paid by corporations in the US. Source: KPMG Competitive Alternatives 2016: Focus on Tax 16 III A DYNAMIC WORKFORCE World’s most highly-educated talent pools Percentage of Individuals Aged 25-64 Having ▪ Canada's talent pool is Attained Tertiary Level Education Top OECD Countries the most highly educated among 60 55.2 OECD member 49.5 48.8 50 countries, with over half 45.5 44.6 43.5 of its population aged 42.9 42.8 42.7 42.7 41.7 25-64 having attained 40 tertiary-level 30 educations. Percent (%) Percent ▪ Four Canadian 20 universities among the top 100 in the world. 10 0 Source: OECD, Education at a Glance, September 2017 18 Stable labour force ▪ Target of 300,000 new permanent residents admitted in 2016 (up from 255,000 average in the last 10 years) ▪ Federal Initiative - Global Skills Strategy ▪ Two-week processing time for high-skilled workers ▪ Gives employers a faster and more predictable process for attracting top talent and new skills to Canada 19 Society rich in multiculturalism Language Distribution in Canada* ▪ Canada has one of English French Other 2016 Census 2011 Census the world’s most multilingual societies with over 200 languages identified 22.9% as the mother 21.3% tongue. ▪ Diversity is our strength. % OF POPULATION 58.6% 58.1% 22.0% 21.4% *Based on mother tongue Source: Statistics Canada, 2011 and 2016 Census , Released August 2, 2017. 20 IV DESTINATION FOR INNOVATION & INVESTMENT High level of R&D investment in higher education R&D Investment in the Higher Education Sector ▪ Canada is a world 2015 leader in post- secondary research, 0.8 outpacing other G7 0.7 countries on higher 0.65 education 0.6 investment. 0.50 0.5 0.45 0.44 0.40 0.4 0.38 0.37 0.3 Percent of GDP (%) GDP of Percent 0.2 0.1 0.0 Canada Germany France U.K. Japan Italy U.S. (2016) (2016) Source: OECD Main Science and Technology Indicators, 2017, Volume 1, August 2017. 22 Solid investor protection Ease of Investor Protection* ▪ Canada is ranked G7 Ranking second in the G7 80 78.3 and seventh out of 76.7 127 countries, by the Global Innovation Index for 70 the ease of investor 65.0 64.7 protection. 63.3 60.0 60.0 Index 60 50 40 U.K. Canada France U.S. Italy Japan Germany * Standing based on three dimensions of investor protection: transparency of related party transactions, liability for self dealing, and shareholders’ ability to sue officers and directors for misconduct.