By Michael Darch
After I get back from a major overseas investment mission, I like to spend a little time reviewing the key things that I learned. From this trip, three things stand out:
- Canada is getting it right from a policy perspective;
- Canadian modesty is getting in the way of our success, and
- Canada is considered an emerging nation.
The financial downturn of 2008 hit many economies hard and particularly in the developed world. Not so Canada. Despite pressures late last century to liberalize our banking system and to continue to run deficits, we did not. The result is a banking system that continues to be the envy of the world and the lowest debt-to-GDP ratio among the G-8 economies.
As countries in Europe and the United States tightened immigration policies, Canada rationalized. An increasing emphasis was placed on economic immigration, encouraging skilled workers, students and entrepreneurs. We continue to attract the best and the brightest to increase the quality and diversity of our labour force to meet the demands of a truly global economy.
We continue to be open to global trade and investment. The North American Free Trade Agreement was a start not an end. We now have several small bilateral agreements and have recently agreed in principal to the Comprehensive Economic and Trade Agreement (CETA) with the European Union. Together, these two agreements open up a sophisticated consumer market of nearly one billion people with a GDP exceeding $35 trillion. CETA is setting a new standard in bilateral agreements as the global economy shifts toward Asia. And Canada is part of the Trans Pacific Partnership.
Canada recently announced the Global Markets Action Plan (GMAP). It sets out both geographic and sector priorities for trade and investment and stresses economic diplomacy, urging our diplomats to take off their tweed jackets, buy business suits, and help build our economy. Canada punches above its weight in the global economy and to continue to do so, must ensure that its limited trade resources are best utilized.
Canada has also revised the criteria for examining foreign investments. It must walk the line between meeting our voracious appetite for investment and not introducing rules that will affect our future ability to adjust our economy. Very few foreign investments will be under scrutiny by these rules – large investments by state owned enterprises and investments that affect national security are the ones most affected.
In a recent discussion with a staff member in the office of the Minster of International Trade, Ed Fast, I learned that the government’s key objective is to remove the barriers to growth for industry. This trip to Europe certainly demonstrated that the barriers are indeed being removed through CETA, and now it was up to us to take advantage.
And that brings me to my second point, modesty. This was bluntly raised in Amsterdam during a roundtable with high-end investors after we asked what we could do better. There was no discussion about lower taxes, better incentives or the pace of our economy. Just the simple statement “Don’t be so modest”.
The ensuing discussion was revealing. To a large degree these were representatives of companies who had already invested in Canada and many were working on further investments. They had found that Canada was a great place to invest and we did not have to reinforce that. They knew that Canada was the easiest and safest place to invest in North America.
Our modesty was also shown in the afternoon seminar. In an interactive session with a panel of Dutch businessmen, an audience member asked “If investing in Canada is so great, why isn’t there more investment”. Two of the panelists attempted to answer but only gave positives and the moderator moved on. I believe that the answer was “You are too modest and need to do a little more chest thumping”. There are things that we can learn from our neighbours to the south.
I must admit that I never thought of Canada as an emerging nation. The statistics being thrown around definitely indicate that Canada is entering a super cycle of development. The $800 billion of Canadian energy, mining and municipal infrastructure projects over the next 10 years are well documented with many already underway. This does not include the multi-million-dollar innovation sector investments that are happening in Ottawa, Waterloo, Montreal and Saskatoon to name a few cities.
While cities in Europe struggle to survive, Canada is looking to find the investment and labour to meet growth-related demand. We are not looking at a lost generation of youth, we are trying to convince our retirees to stay in the labour force and increasing our intake of skilled immigrants. We are an emerging country with an economy, infrastructure and labour force built to take advantage of the twenty-first century.
From this investment mission, I came home a proud Canadian.
Michael Darch is the founding President of the Consider Canada City Alliance Inc.