Magna-tizing the Bottom Line     Various prognosticators are calling for 2002 growth in the overall Canadian economy of anywhere from 2 percent to 2.7 percent, most of their figures have been revised downward because of slow-to-dissipate inventories and declining exports and shipments. Yet while the auto sector bears the brunt of the slowdown, certain key performers -- like Celestica in the similarly slowed ITC realm -- continue to excel. In Ontario's case, that means Magna, an automotive systems firm that employs 19,000 Canadians.     Magna defies the trends. The company reported a rise in sales of 5 percent for the first six months of the year, to $5.7 billion, despite the fact that production was slumping all around them. Profits for the period were up 13 percent, with the amount of $356 million nearly doubling that of second-place Johnson Controls. In Espansion Mode     Like one of Austrian founder Frank Stronach's prized thoroughbreds, his company has all the right lines from all the right continents, including a rapid expansion in Europe. And consistent with Stronach's predilection for owning the tracks as well as the horses, so too, has Magna enabled itself to be a parts maker that has the actual wherewithal to make the entire vehicle. Its latest IPO spin-off project is interior maker Intier Inc. And its latest new facility is a 450,000-sq.-ft. (41,800-sq.-m.), $96 million hydroforming plant in Milton, Ontario, for frame-maker subsidiary Modatek Systems. Meanwhile, Magna's all set to merge with fellow Canadian firm Tesma (of which it's already the controlling shareholder), which is just fine with Tesma's leadership.     "Our team has built a strong foundation in the powertrain modules and systems sector, and we are excited about the proposed combination with Magna Steyr, as it will enhance our engineering and technological capabilities, expand our customer base and further relationships in established and emerging markets," said Manfred Gingl, Tesma's president and CEO, in May. The company operates 13 facilities in Canada.

    The increasingly pro-business atmosphere has significantly boosted Ontario's economy. MEDT's John Davidson, manager of U.S. Investment Sales, explains: "Our strategy is working. More than 837,000 jobs have been created in Ontario since our government took office in 1995, and 88,000 jobs in the past year."
      Though taxes are being cut, the province has eliminated its deficit and in fact has posted two consecutive surpluses for the provincial government -- the first time since 1942-43. The estimated 2001 surplus is $2 billion while 2000 posted a $427 million surplus.
      The province's real gross domestic product (GDP) is expected to outgrow the U.S. although the two markets are closely tied. In 2000, real GDP growth in Ontario outstripped expectations, reaching 5.5 percent -- the provincial budget forecast was set at 4.6 percent. Between 2001 and 2002, Ontario is expected to average growth of about 3 percent, beating out Canada at 2.7 percent and other G-7 countries. The U.S. is No. 2 of the G-7 countries with an expected 2.3 percent growth.
      "This shows that although Ontario is heavily involved with the U.S. economy, the private sector forecasters are still anticipating growth in Ontario to exceed growth over the next two years of jurisdictions with which we might compete," says Ministry of Finance's Manager of Fiscal Framework Chris Monahan. "Ontario's fundamentals are very healthy. The economy has grown faster than projected, and Ontario's industries are competitive. Interest rates and inflation are low, and tax cuts have been made and continue to be made, which are boosting growth."
      Ontario, too, continues to attract investments from a wide array of industries. Looking at major investments made this year (see chart), automotive, information technology and call centers have been quite active in the province.
      Much of Ontario's investment comes from outside Canada. The U.S. provides most of Ontario's foreign direct investment (60 percent), followed by the U.K. (7.7 percent) and Japan (4.1 percent). "Investment leads are mostly from the automotive industry [30 percent], call centers [16 percent] and life sciences [22 percent]," says Davidson. "Machinery is also there with 16 percent."
      The auto industry is a prime example of Ontario's strength despite its ties to the U.S. "There has been a negative in the auto industry, we have certainly been effected with the Big 3," says Davidson. "We have plants with Daimler, Ford and GM, but we also have plants with Toyota and Honda. And where the Big 3 have been feeling pressures due to overproduction, Toyota and Honda have been doing extremely well. Those two companies are where we have some real opportunities for people coming in."
      As noted by the FDI numbers, other industries are equally as strong. Here's a look at some of Ontario's fastest growing industries.