Presentation byClaudio RamirezConsul and Trade CommissionerConsulate General in Miami

How governments support the private sector in the area of trade promotion

The Case of Canada

Florida International UniversityMBA Class

November 14, 2009

• 33 million people in 10 provinces and three territories

• Stable parliamentary democracy

• Officially bilingual but with more than 200 languages active

• One in six Canadians is an immigrant reflecting true diversity of culture and language found in the world

• Among the top 3 in the United Nations quality of life Index for seven years in a row

Mexico City

1000 km

500 km

Los Angeles

Denver

Houston

Atlanta

Seattle

Miami

New York

Boston

Philadelphia

WashingtonBaltimore

DetroitChicago Cleveland

St. LouisPittsburgh

Milwaukee

San Francisco

St. John's

Calgary

Vancouver

ReginaHalifax

Toronto

MontréalWinnipeg

Charlottetown

Edmonton

VictoriaOttawa

Windsor

Québec

Fredericton

Saskatoon

Investment = Influence

All Politics is Local

WATCH YOUTUBE VIDEO AThttp://www.youtube.com/watch?v=yEHXMoKPzvI

Department of Foreign Affairs and International Trade Canada (DFAIT)

Canada has diplomatic and consular offices in over 270 locations in 180 countries.Canada has diplomatic and consular offices in over 270 locations in 180 countries.

DFAIT’s four key functions

• Coordinating international policy-making• Promoting Canadian interests, values and

expertise abroad• Assisting Canadians by providing global

commerce, consular and passport services • Supplying a physical platform outside Canada

Shift Happens, innovation becomes an imperative

WATCH YOUTUBE VIDEO AThttp://www.youtube.com/watch?v=jpEnFwiqdx8

BRIC + Emerging Markets

GVCs

Government Policy Framework

Canada’s Pacific Gateway Initiative

Canada’s Footprint in North America

21

Source: The Federal Budget, Finance Canada, January 27, 2009 and the OECD Tax Database. * METR takes into account federal and provincial statutory corporate income tax rates, deductions and credits available in the corporate tax system and other taxes paid by corporations, including provincial capital taxes and retail sales taxes on business inputs.

International Comparison of Marginal Effective Tax Rates (METR) on Business Investment in 2012

39,5 39,3

34,431,4 30,2

28 27,2

10

15

20

25

30

35

40

45

Japan U.S. France Italy Germany U.K. Canada

%

The overall impact of the business tax system can be measured by the marginal effective tax rate (METR)*.

By 2012, Canada’s METR will be the lowest in the G-7 as a result of corporate tax reductions introduced by the Government since 2006.

22

• Canada offers one of the most favorable tax treatments for R&D among the G-7.

– Canada provides a system of tax credits and accelerated tax deductions for a wide-variety of R&D expenditures.

– Eligible costs include: salaries, overhead, capital equipment, and materials.

• These tax-based incentives permit firms to significantly reduce R&D costs through direct investment or sub-contracting in Canada.

Relative Generosity of

R&D Tax Incentives*(Index: Canada = 100.0)

79,7

80,3

87,9

90,8

93,1

100,0

101,2

50 60 70 80 90 100 110

Germany

Italy

U.S.

U.K.

Japan

Canada

France

23

• With the world in the midst of the current financial crisis, investors can take comfort in the fact that Canadian banks are generally healthy with solid balance sheets and least likely to require a government bailout in the event of a major economic downturn.

*Standing among 134 countries. Ranking based on the degree of soundness of financial institutions. Source: Global Competitiveness Report, 2008-2009

Soundness of Banks* World Rank

10th9th

8th7th

6th5th

4th3rd

2nd1st

Ran

k

24

• The overall skill level of Canada’s workforce ranks high among competing countries.

• Canada has one of the highest percentage of individuals achieving at least college or university education, among OECD member countries.

Higher Education Achievement

56,755,0 54,0 53,0

51,250,0

44,042,0 42,0 42,0 41,0 41,0 40,5

30

35

40

45

50

55

60

%

Source: IMD, World Competitiveness Yearbook 2009

25

• Regulations pertaining to the creation of new businesses are considerably more flexible in Canada than those in the rest of the G-7.

• Canada ranks first among the G-7 and OECD countries for the lowest number of procedures required to establish a new business.

Number of Procedures*

1

5

6

8

9

5,8 66

0123456789

10

Canada France OECDAverage

U.S. U.K. Italy Japan Germany

26

• Canada understands the importance of its business community and has created an environment to encourage its success.

• Canada’ business climate ranked first in the G-7 and third out of 82 countries in the Economist Intelligence Unit’s global business rankings for the forecast period (2009-13), up from fourth and still first in the G-7 out of the full 82 countries from the historical period (2004-2008).

• The country ranks well for its infrastructure, market opportunities, taxes, and foreign trade and exchange controls.

Business Environment of Top Ten Countries, Rank for Forecast Period 2009-2013

10th

9th8th

7th6th

5th4th

3rd2nd

1st

Ran

k

Source: The Economist Intelligence Unit, April 2009

27

• From a global standpoint, Canada has the highest concentration of entrepreneurs within its working population.

• Businesses, including start-ups, develop new products and services and get them to market and conceive new types of organization and production and put them into practice.

• New companies also serve to remind existing firms of the need to adapt and continue innovating.

Source: Statistics Netherlands 2008

Number of Entrepreneurs as a Percentage of the Working Population

15,9

11,5 11,2 11,1 11,110,1 9,7

8,6 8,56,9

0

5

10

15

20

28

• Canada has the best overall quality of life among the G-7.

Source: IMD, * Rank among 55 economies considered in the World Competitiveness Yearbook 2008.

Quality of Life Index*

9,27

8,89

8,53

8,17

7,166,90 6,86

6,0

6,5

7,0

7,5

8,0

8,5

9,0

9,5

10,0

Canada Germany U.S. France U.K. Japan Italy

Inde

x

Ascribed to DFAIT

Over 150 offices at home and abroad

Some 800 Trade Commissioners

7 employees in Miami

Structure – International Trade

International Trade consists of four integrated strategic functions:

• Trade Policy and Negotiations • Exports• Investment• Innovation

Building Canada’s economy

The TCS promotes Canada’s economic interests in the global marketplace.

The TCS promotes Canada’s economic interests in the global marketplace.

• Foreign-market access• Trade leads• Exports• Business contacts • Events

• Technology transfer• Licensing agreements•Joint-venture development• Investment in Canada• Research and development (R&D) partnerships

The TCS facilitates

Our clients• are small, medium and large companies;• are established in Canada; • do business abroad; and • have researched their market(s).

Delivering value to businesses

We help Canadian companies succeed globally and lower their costs of doing business through four key services:

1. Preparation for international

markets

2. Market-potential assessment

3. Qualified contacts

4. Problem solving

1. Preparation for international

markets

2. Market-potential assessment

3. Qualified contacts

4. Problem solving

Leveraging partnerships The TCS• has an unparalleled network of contacts around the world. And that network starts at

home. • connects partners to clients through its regional offices across Canada. Partners include:

• Export Development Canada (EDC)• Canadian Commercial Corporation (CCC)• Business Development Bank of Canada (BDC)• Provincial economic development organizations• Business and industry associations

The Virtual Trade Commissioner (VTC)

Markets are constantly changing. The VTC allows clients to receive the latest insights, including

• access to current market reports, country information, business opportunities, sector-specific news, trade events and more.

• assistance from VTC partners: – Agriculture and Agri-Food Canada, Canadian

Heritage, EDC and the CCC.

VTC: Sneak peak

Register atinfoexport.gc.ca

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