Contributed by Michael Darch, President of Consider Canada City Alliance
In late March, KPMG released its 2016 Competitiveness Alternatives report. Canada retained its position as having the lowest comparative business costs amongst the mature economies, with an overall cost index 14.6% below that of the United States, the baseline country.
The report rightly points out that cost is only one of the factors in a location decision. In a globalized economy looking increasingly to innovation and sustainable economic advantage, the availability of talent is becoming the principal cost driver in investment decisions (Area Development Magazine survey). Once again, Canada moves to the front, consistently leading the OECD countries in the percentage of its population having achieved tertiary level education.
For companies looking for global platforms for growth or to gain entry into the North American market, the KPMG study is clear. From a cost viewpoint, Canada is extremely competitive. In the critical global growth sectors of Digital Services and R&D Services, Canada has a cost advantage over the United States of 26.0% and 27.7% respectively.
As previously mentioned cost is important, but the new battleground for sustainable investment is talent. I recently had the privilege of speaking beside Stéfane Marion, the Chief Economist and Strategist at the National Bank of Canada, at an Invest in Canada/Consider Canada City Alliance investment conference in Brazil. Stéfane made some very good points about Canada’s talent base.
First, Canada has one of the most open immigration systems in the world, as evidenced by the share of the population born outside the country.
Second, the policy favours skilled immigration to respond to the needs of Canada’s growing knowledge-based economy.
Third, Canadian policy welcomes diversity creating the positive demographics for success as globalization increases.
As many of the mature economies begin to face an aging workforce and a decline in the availability of skilled labour, Canada continues to develop the policies that respond to maintaining a highly skilled workforce. Its primary, secondary, trade and university education systems are public, globally competitive and respond to changing workplace demand. With an immigration system that is open and favours skilled workers and entrepreneurs, it is responsive to demographic reality and continues to build a sustainable and competitive economy. Canada also has a newly elected Prime Minister and majority government that is committed to the continuing strengthening of the talent base. There is no discussion in Canada of building a wall to keep our neighbours to the South out as has been suggested by one current U.S. Presidential candidate. Quite the contrary, we continue to welcome all investors and skilled immigrants seeking stability, diversity and opportunity in a global economy.
A competitive cost structure and a proactive policy environment for developing, keeping and acquiring talent puts Canada at the top of the list for investment by companies in knowledge-based industries seeking global business platforms or looking to enter the near $20 trillion North American market.
About Consider Canada City Alliance (CCCA)
As a united front, Canada’s large cities – Vancouver, Calgary, Saskatoon, Winnipeg, London, Waterloo Region, Toronto, Ottawa, Greater Montréal, Québec City and Halifax – help international companies determine the best strategies for business expansion and continually improve Canada’s ability to attract new investment and trade opportunities. Together, Consider Canada’s eleven members represent approximately 52.3% of Canada's population, 56.2% of its GDP and 65% of GDP growth in Canada between 2009 and 2014.