Robust economic growth, an increasingly competitive corporate tax structure and a constant supply of graduates of top-notch engineering schools are the three engines driving Ontario's acceleration into the fast lane. "There's no question that Ontario has a world-class university infrastructure and that there's a talent pool to draw on," says IBM Canada spokesman Mike Quinn, commenting on why the parent company chose the province as the location in which to build its Software Solutions Lab.

Canada's most populated province is seeing its most impressive growth since the 1980's, according to the Ontario Ministry of Economic Development and Trade (MEDT). The first quarter of 2000 saw solid economic performance, with real GDP up 1.2 percent (4.9 percent annualized).

Although the province's CPI inflation rate was 3.2 percent in June 2000, up from 2.5 percent in May, the increase is being attributed to higher energy prices (excluding this, the MEDT reports, the rate would have been just 1.6 percent). In 1999, housing starts climbed 25 percent to a decade high of 67,235 units, reports John Mitsopulos, manager, U.S. investment sales at the MEDT.

All indicators confirm that there has never been a better time to be in Ontario for business. The MEDT reports that for the first five months of 2000 (compared to the same period in 1999), Ontario manufacturing shipments rose 9.3 percent, international exports increased 7.8 percent, and wholesale trade sales were up 10 percent.

Industry Canada's ICT Statistical Review reports that the information and communications technology sector is growing three times faster than the rest of the economy. And KPMG's 1999 The Competitive Alternatives cited Canada as being the best location in the G-7 for advanced-manufacturing and telecom-equipment production, a homegrown specialty dating from Bell's experiments in Brantford, Ont.

Over the past five years, more than 1,100 licenses, permits and reports have been eliminated. Many pro-business steps have been put in place, including elimination of the annual corporate filing fee; revision of the Building Code; reduction in development fees; a simplification of land-use planning and approvals; and a reduction in workplace safety insurance premiums (by 20 percent from 1996-99) to name a few.

One of the most important developments this year for Ontario and all of Canada is the drastic reduction in the corporate income tax (CIT) rate. Over the next five years, cuts to both federal and provincial rates will leave Ontario with one of the lowest corporate tax burdens in North America. The federal CIT will drop from 28 percent to 21 percent. In its May 2000 Budget, the Ontario government reduced its tax rate by 1 percent, effective immediately (now at 14.5 percent), and it announced plans to continue the decline until 2005, when it's expected to be just 8 percent. These changes, says Mitsopulos, will give Ontario the lowest general CIT rate in Canada; by 2005, the combined federal-provincial rate would fall to approximately 30 percent.

The Conference Board of Canada forecasts the Ontario GDP will rise by 4.6 percent and 3.0 percent respectively for 2000 and 2001. Mitsopulos reports that this year Ontario will likely outperform most of its counterparts in the Great Lakes states, all of them next year, and most other Canadian provinces as well. "According to Statistic Canada's latest Private and Public Investment Intentions Survey, total Ontario investment is expected to increase 7.5 percent in 2000, led by high-technology and housing," he relates.