Site Selection Managing Editor Mark Arend recently met with Canada’s new consul general in Atlanta, Astrid Pregel, who takes charge of her nation’s economic interests in an increasingly important U.S. region to Canada. The southeastern United States is in the geographic center of what may soon be a free trade zone covering all of the Americas. With energy and skilled labor in ready supply and a falling corporate tax rate, Canada is poised to benefit handsomely from economic expansion activity in the present and that which is likely to be spurred by new trade agreements. Following are her thoughts on why and how Canada is ready for business.
Site Selection: Congratulations on your assignment as Canada’s Consul General in Atlanta. What do you hope to accomplish during your time in this post?
Astrid Pregel: These are exciting times to be consul general for Canada in the Southeastern U.S. The traditional focus for Canada with respect to the United States is shifting from the border region, where Canadian policy with respect to trade development has been focused, to a larger framework, particularly in the six years since NAFTA brought about the importance of a focus on three countries, not just two. As Canada has looked at its economic interests in the United States, we can see that as American attention is turning to the south, the border issues that are related to Mexico are being brought into the dialogue with Canada.
Ninety percent of the Canadian population lives with 100 miles of the U.S. border, and trade with U.S. areas along that border is intense. People on both sides of the border are much more aware of each other. Further away from that region, there is less familiarity — on both sides. For our part, we know we must focus on the parts of the United States that are not contiguous to our borders. Interest in the U.S. southeast from the Canadian perspective is growing. Our priority is to enhance as many of the trade and economic ties to the region as possible. You can see this in [Georgia] Gov. Roy Barnes’ December 2000 trade mission to Canada, which heightened awareness of areas such as Ottawa as a high tech region, as well as what Georgia’s economy has to offer.
Another focus is the education area, and relations with higher levels of education are a key part of out portfolio. And we are involved in some cultural programs to the extent resources allow us. It’s an exciting time to be in Atlanta.
SS: What factors related to Canada’s business climate should potential foreign direct investors be aware of at this time?
AP: Much of this would depend on the specific project or industry, but in general terms, there is an extremely sound fiscal framework in Canada — we were the first G7 country to eliminate chronic budget deficits. And Canada has had the strongest GNP growth per capita of the G7 countries for the past couple years. Studies indicate that the costs of doing business tend to be lower than those in the U.S. Atlanta business people I know whose companies have a presence in Canada rave about the dedication and lack of absenteeism of Canadian employees. Canada also has the highest number of university graduates per capita of any country in the world. The post secondary education system is very well regarded. Eight of the top 20 electrical engineering colleges in North America are in Canada — that’s nearly half from a small country in terms of population. That’s an incredible foundation from which to provide highly skilled workers. Technology clusters are developing thanks to the presence of so many world class research facilities and close working relationships with government and business. This brings about real synergy in the technology arenas that are so important in the new economy.
We still have all the natural resources, but that sector is now 30 percent of our exports, a decreasing proportion. That’s still important to us, but it’s not what’s driving the real growth.
SS: How will the tax reform program now in place in Canada benefit the business community?
AP: It’s projected that by 2005 our corporate taxes will be lower than those in the United States will be. Of course, it’s important to look at that issue industry by industry. If a company plans to hire a lot of people, than it’s more important still. But we are very optimistic about what the tax regime means, such as a generally more favorable treatment of capital gains than is the case in the United States.
We have a big education challenge on the tax front. The sense that Canadian taxes are higher than in the U.S. is very strong, such that the facts are almost irrelevant. So it’s that much more important to inform people of the changes that are taking place.
I also want to mention that the research and development environment in Canada from a tax perspective is the most favorable of any G7 country. There are federal and provincial incentives for R&D — the government is very focused on enhancing the amount of R&D that takes place.
SS: What misperceptions about Canada might non-Canadians have about doing business in Canada?
AP: There are a number of myths. One is that the Canadian economy is based on mining and timber. People may not realize that we have the third largest aerospace industry in the world and that Montreal, after Seattle and Toulouse, France, has more aerospace jobs than any other city in the world. Another concerns health care. I’m always amazed at how much misinformation is out there about the Canadian health care system. Businesses that really look at the issue realize that the fact that the costs are shared across the population is a real cost benefit. In fact, health care is part of the fabric of Canada and a reason for which most Canadians elect to stay in Canada. Another myth concerns labor-management relations, which aren’t really much different than in other areas.
SS: Energy availability and cost are foremost on the minds of many site seekers lately. What should they know about energy deregulation in Canada?
AP: In general terms, energy is available, and it’s cheaper. It depends of course on the source and the industry. Different provinces are at different stages of deregulation; a lot of careful study of the issue is going on at the moment. But I don’t see anything on the horizon that would cause a businessperson to be concerned.
SS: Does a new Administration in Washington, D.C., present any new cross-border opportunities of interest to the business community?
AP: We have watched closely to gauge what the new Administration’s policy direction will be in a number of international areas. The trade policy area, especially with respect to obtaining fast-track
