Costs are another big advantage for firms expanding in Canada. The Canadian dollar is currently around 68 cents on the U.S. greenback, and that gives Canadian sites a sizable cost advantage. Hourly manufacturing wages in Canada (US$16.55) are well below the comparable U.S. figure ($18.24). “And occupancy costs here are generally very competitive,” Amos says. Flamborough, Ontario-based EDAC (www.edac.ca) is involved in several projects that figure to boost Canada’s location stock even higher. Chief among those is a cross-border database initiative to facilitate comparison of U.S. and Canadian sites.
You’d expect the president of the Economic Developers Association of Canada (EDAC) to be an unabashed supporter of business investment into America’s neighbor and No. 1 trading partner — and an articulate voice explaining the country’s many location advantages. And David Amos is.
Amos, who is also director of economic development for the city of Brantford, Ontario, recently talked with Site Selection about Canada’s investment environment. He says there’s a lot to like about locating in Canada, and he makes a strong case.
First, Amos says, international companies would do well to check out Canada’s work-force assets.
“As far as education and work-force skills, Canada’s labor force is certainly known as one of the most highly trained and adaptable in the world,” Amos says. “I recently saw a stat that showed two-thirds of Canadians age 20-24 are enrolled in post-secondary education.” What’s more, he adds, Canada is consistently one of the world’s top countries in devoting a large share of GDP to funding education.
Besides quality, labor availability is another point in Canada’s favor. The Toronto area’s unemployment rate, for instance, is 6.9 percent. In Victoria, British Columbia, unemployment is 8.8 percent, and in Montreal, it’s 9.7 percent (see the Canada 2000 feature, polybagged with this issue, for a full report on Canada). By comparison, unemployment rates for many leading U.S. metro areas are less than 3 percent.
Furthermore, Canada has generally healthy labor relations. “We have low numbers as far as productivity lost due to strikes, walkouts and so on,” Amos says. “And we have low turnover and low absenteeism rates.”
ABOVE: “Canada’s labor force is one of the most highly trained and adaptable in the world,” says David Amos, president of the Economic Developers Association of Canada.
Money Talks
But even more telling is a January 1998 The Economist Intelligence Unit report that estimated Canada’s overall business costs to be only 57 percent of U.S. costs. One big advantage is Canada’s government-run health-care system. “Employers here pay about one-sixth as much as firms in the states for health coverage, so that’s a heck of a difference,” Amos emphasizes.
Research and development, critical for companies as they strive to incorporate the latest technological innovations, is another strength for Canada. “More dollars are being spent toward centers of excellence, research networks, and alliances between the private sector, government and universities,” Amos reports. “And Canada has one of the more generous R&D tax incentives among G-7 countries.”
Locating in Canada, of course, also gives companies direct access to the United States and Mexico as a result of the North American Free Trade Agreement. “Canada lives and dies on international trade networks,” Amos underscores. As a result, he says, Canadians’ business acumen is geared for international trade and marketing.
“But Canada is more than a good place to do business,” Amos emphasizes. “It’s also one of the best places in the world to live. It consistently comes in at or near the top in international comparative measures of quality of life.”
EDAC Initiatives
“We’ll continue our work on the joint database for site selection purposes,” Amos says. “It’s an ongoing process of developing an international database that’s recognized throughout North America, so you’re comparing apples to apples.” The project is a joint initiative of EDAC, the Council for Urban Economic Development (www.cued.org), the American Economic Development Council (www.aedc.org) and the Canadian federal government.
Other EDAC priorities include strengthening the organization’s ties with provincial economic development associations and continuing to work with other groups to extend recognition of its professional designation (e.g., the Ec.D.) throughout North America and internationally.
— by Tim Venable
