Ministry of Economic Development, Job Creation and Trade

OntarioWHERE INVESTMENT MEETS OPPORTUNITY

Presentation to Canada Eurasia Russia Business Association (July 2020)

A STRONG ECONOMY AND STRATEGIC LOCATION

Ontario is Strategically Located for Business GrowthOntario is Strategically Located for Business Growth

Located in the heart of North America

• 14 million people and over 200 languages spoken.

• Connected to at least 175 international destinations.

Canada’s economic powerhouse

• 7th largest subnational economy in North America by GDP.

• 39% of the country’s population and GDP.

• 46% of Canada’s goods produced in Ontario.

• 63% of foreign enterprises in Canada are present in Ontario

Access to markets

• Free trade deals with 51 countries

• Daily two-way trade between Ontario and the U.S. was over $1 billion in CAD (2018).

• 41.8% of Canada’s global goods exports from Ontario.

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1229

978

684587 580 541 498 474 425 408 362 350 339 325 320 303 268

Ontario’s GDP Tops Many OECD Countries

Ontario’s GDP stands strong globally, compared to countries such as Switzerland, Belgium, Norway and Finland.

GDP for Ontario & Select Organization For Economic Co-operation And Development (OECD) Countries, 2018

($ billion in USD)

Ontario’s GDP Tops Many OECD Countries

Note: GDP at Purchasing Power Parity (PPP) for all countries. Ontario’s GDP at PPP was estimated as a percentage of Canada’s.

Source: OECD, and MEDJCT calculations using data from Statistics Canada and OECD.

Top Destination for Global BusinessTop Destination for Global Business in North America

Ontario is ranked 1st in North America as the Top Destination Region for number of jobs created in 2018.

Toronto is ranked 1st in North Americaas the Top Destination metropolitan area for number of jobs created in 2018.

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4.6

4.8

5.2

5.3

5.4

5.7

6.1

6.3

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10.1

0 2 4 6 8 10 12

Michigan

Indiana

Virginia

Texas

Ohio

Georgia

Illinois

Tennessee

Alabama

Ontario

By Jobs Created in 2018 (in '000 jobs)

1.2

1.4

1.6

2.2

2.5

2.8

3.1

3.7

4.2

4.9

0 1 2 3 4 5 6

Charlotte

Ottawa

Boston

Atlanta

Montreal

Dallas

New York

Detroit

Chicago

Toronto

By Jobs Created in 2018 (in '000 jobs)

Source: IBM Global Location Trends Report, 2019

Global Investors Come to OntarioGlobal Investors Come to Ontario

In 2018, Ontario was the top Canadian province attracting 153 greenfield foreign direct investment projects involving international investment of over $8 billion in CAD ($6 billion in USD) from across the globe.

Greenfield Foreign Direct Capital Investment into Ontario in 2018 by Source Country (%)

Source: fDi Intelligence Ontario Report, 2019.Other” includes Ireland, Denmark, South Korea, Australia, Singapore, Jordan, Belgium, United Arab Emirates, Spain, Italy, Norway and Hong Kong.

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United States, 48.4%

Germany, 10.5%

United Kingdom7.8%

France, 5.9%

Switzerland, 3.9%

Japan, 3.9%

India, 2.6%

South Africa, 2.0%

Sweden, 2.0%

China, 2.0%

Other, 11.1%

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Global Investment made in Many Sectors of Ontario

Greenfield FDI Capital Expenditures in OntarioDistribution by Top Sectors (%) in 2018

Software & IT services, 27.5%

Automotive OEM, 20.4%

Semiconductors, 9.3%Transportation, 7.8%

Food & tobacco, 7.5%

Pharmaceuticals, 7.3%

Consumer products, 6.6%

Hotels & tourism, 2.8%

Communications, 2.4%

Business services, 1.7% Other, 6.7%

Source: fDi Intelligence, 2019 commissioned report (with MEDJCT calculations), Exchange Rate as of October 10, 2019 – 1USD = 1.33 CAD“Other” includes the following sectors: Financial Services, Industrial Equipment, Aerospace, Automotive Components, Chemicals, Biotechnology, Renewable Energy, Medical Devices, Real Estate, Space and Defence.

In 2018, the Software and IT services sector received the highest amount of FDI, $2.2 billion in CAD ($1.67 billion in USD), followed by the automotive OEM sector, $1.63 billion in CAD ($1.23 billion in USD).

Easy Access to the U.S. MarketEasy Access to the U.S. Market

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• Companies in Ontario have access to 143 million consumers within a day’s drive.

• The daily two-way goods trade between Ontario and U.S. in 2018 was valued at over $1 billion in CAD.

Sources: Trade Data Online, with data from Statistics Canada and U.S. Census Bureau; Statistics Canada, Population estimates on July 1st, by age and sex; US Census Bureau, Counties Population Estimates, July 1, 2017 data.

A Ready Gateway to Global MarketsA Ready Gateway to Global MarketsCanada’s 14 trade agreements with 51 countries offer Ontario companies privileged access to global markets, totaling a combined GDP of $67 trillion in CAD ($52 trillion in USD). These opportunities support global sales expansion and supply chain development for Ontario companies.

Note: FTA coverage does not include WTO Agreements. Source: Global Affairs Canada, and MEDJCT

Countries with CompletedFree Trade Agreements

Countries with Free Trade Agreements Being Negotiated

Countries with Free TradeAgreements in ExploratoryDiscussions

All other countries without Free Trade Agreements withCanada

Countries with completed but not yet ratified FTAs

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A SKILLED AND GROWING WORKFORCE

The Best Talent Available for Your BusinessThe Best Talent Available for Your Business

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Ready Labour Market and Highly Educated Workforce

• 68% of Ontario adults have post-secondary education.

• 5 Globally renowned universities in Ontario (Top 300).

High-Quality Tech Talent

• Over 42,000 STEM1 graduates produced annually.

• Toronto is the 3rd top-ranked tech talent market in North America after the San Francisco Bay Area and Seattle.2

Access to Global Talent through Immigration

• 10 business days work permit processing for highly skilled talent.

1STEM: Science, Technology, Engineering and Mathematics.2Source: CBRE, 2019.

Faster Access to Global TalentFaster Access to Global Talent

Recruit temporary foreign workers:

• The Global Skills Strategy (GSS) provides faster access to top global talent for companies bringing new skills to Canada and creating more Canadian jobs.

• Ontario is a Referral Partner for the GSS

• Employers get access to the dedicated service channelfor specific company needs.

• Through the Global Talent Stream, employers receive Labour Market Impact Assessments in ten (10) business days and work permits in ten (10) business days1.

Retain long-term foreign talent:

• The Ontario Immigrant Nominee Program (OINP) allows Ontario employers to recruit foreign nationals while giving them a pathway to permanent resident status in Canada.

1 Immigration, Refugees and Citizenship Canada, 2017

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COMPETITIVE BUSINESS ADVANTAGE

A Stable and Competitive Business EnvironmentA Stable and Competitive Business Environment

Stable Business Landscape

• Canada has the world’s second soundest banking system.1

• 2nd most politically stable country in the world after Norway, Finland and Sweden (tied for 1st).2

Lower Business Costs

• Competitive combined federal and provincial manufacturing corporate income tax rate at 25%.

• Competitive combined federal and provincial corporate income tax rate at 26.5%.

• Significant Research & Development cost savings.

Quality of Life

• Toronto and Ottawa rank among the top 20 cities in the world for great quality of life.3

1 Source: World Economic Forum, Global Competitiveness Report 2018.2 Source: Freedom House, 2018; ranking includes political rights and civil liberties.3 Mercer Quality of Life Index, 2019

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Combined Federal and State/Provincial Corporate Income Tax Rate in Manufacturing (%, Great Lakes states & Ontario)

Source: Ernst and Young, 2018 MEDJCT Commissioned Study (with updates from MEDJCT)

21.0%

25.0% 25.4% 25.7% 26.1% 26.5% 27.2% 28.7% 28.9%

Competitive Corporate Taxes for Manufacturing

Ontario’s combined manufacturing tax rate remains lower than many competing U.S. states such as Michigan, New York and Pennsylvania.

Research and Development SavingsResearch and Development Savings

After-Tax Cost of $100 Research & Development (R&D) ExpenditureSmall & Medium-sized Manufacturers

Note: based on information as of June 1, 2018.Source: Ernst & Young, 2018; Commissioned by Ministry of Economic Development, Job Creation and Trade.

R&D savings make it easier for companies to reinvest in their business growth and productivity and create more jobs in Ontario.

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Type of

Expenditure

R&D

Expenditure

(in-house)

R&D

Expenditure

(outsourced)

R&D

Expenditure

(at eligible Ontario

research institutes)

Gross expenditure $100.00 $100.00 $100.00

Actual

after-tax expenditure$47.50 $60.28 $50.44

ONTARIO’S SECTOR HIGHLIGHTS

Ontario offers Opportunities in Diverse SectorsOntario offers Opportunities in Diverse Sectors

ENVIRONMENTAL TECHNOLOGIES

GDP: $19.8 billion in CAD130,000 Jobs

Key Opportunity: The province is a leader in this emerging sector, with a global economic growth opportunity as high as $2.5 trillion by 2022. Ontario is home to 35% of Canada’s innovative environmental technologies companies.

FINANCIAL SERVICES

GDP: $65 billion in CAD370,000+ Jobs

Key Opportunity: Leading financial services centre –Ontario is home to North America’s 2nd largest financial hub and 64% of Canada’s financial services information and technology-related workers (Fintech) are located in the province.

CHEMICALS

Revenue: $18.1 billion in CAD29,000 Jobs

Key Opportunity: Ontario’s chemical sector ecosystem includes investment-ready infrastructure, training partnerships with post-secondary institutions and ready access to key raw materials inputs. Ontario is home to Canada’s largest and most highly integrated chemical manufacturing cluster in Sarnia-Lambton.

INFORMATION AND COMMUNICATIONS TECHNOLOGY

GDP: $35.3 billion in CAD296,000 Jobs

Key Opportunity: Top jurisdiction for information and communication technology job creation – since 2010, more information technology jobs have been added to Ontario cities than New York and Massachusetts combined.

AUTOMOTIVE

GDP: $13.9 billion in CAD 106,000+ Jobs

Key Opportunity: A well-established automotive ecosystem including 5 global automakers, innovative suppliers and a vibrant network of universities and research centres – Ontario is an excellent location to develop and build the connected, autonomous and safe vehicles of tomorrow.

LIFE SCIENCES

Revenue: $48.1 billion in CAD62,000 Jobs

Key Opportunity: Largest life sciences jurisdiction in Canada with over 1,800 firms engaged in developing, manufacturing and selling medicines and medical devices. High-quality R&D capabilities in oncology, regenerative medicine and advanced therapeutics, neuroscience and diagnostic imaging, as well as world-class clinical trials infrastructure.

AEROSPACE AND DEFENSE

Revenue: $8.6 billion in CAD32,300 Jobs

Key Opportunity: Ontario aerospace manufacturers are part of the global supply chain for virtually every passenger aircraft in the world and the industry works closely with academia to develop and commercialize new products and processes. Ontario’s defence industry is the largest in Canada, with capabilities in aerospace, naval, land vehicles, electronics and information and communication technology.

STEEL

GDP: $3.0 billion in CAD16,000 Jobs

Key Opportunity: Ontario is home to over 70% of

Canada’s steel-making capacity, mainly concentrated in regional clusters in Sault Ste. Marie and Hamilton, featuring close proximity to key customers (such as automotive), highly integrated supply chains and leading educational and research institutions.

GDP: Gross Domestic Product.

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AGRICULTURE AND FOOD

• The Golden Horseshoe Region is a rich farming area in Ontario producing a vast array of agricultural products and is one of the top three economic clusters in North America for the food and beverage industry.

• Home to in excess of 6,000 farms with almost a million acres of farmland producing over 200 commodities for local and international markets.

• 65% of the products grown on Ontario Farms are processed by Ontario’s Food Processors

• Accounts for roughly 65% of the total agri-food jobs in the province of Ontario.

Ontario MEDG Powerpoint Presentation – 2018

The region’s 32,000 square kilometres includes

some of Canada’s most productive farmland, as well as world-renowned natural features, like the Niagara Escarpment, the Greenbelt, and the Oak

Ridges Moraine.

The Golden Horseshoe Region of Ontario

Source: The Golden Horseshoe Farming Alliance – Asset Mapping In the Greater Golden Horseshoe 2016 Report

TECHNOLOGY

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ONTARIO’S ICT ECOSYSTEM

61%

18%

7%

Kitchener-Waterloo • ~613 ICT firms

• ~14,700 employees

• Strengths in software development, satellite technology, e-Learning, cybersecurity, digital display, robotics, digital media and games, health informatics, imaging, cloud computing, and mobile applications

GTA• ~15,617 ICT firms

• ~177,500 employees

• Strengths in enterprise software development, cybersecurity, robotics, telecommunications, technology manufacturing, mobile applications, digital media, social media, cloud computing, and supercomputing

Ottawa• ~3,040 ICT firms

• ~42,100 employees

• Strengths in digital media, cybersecurity, wireless technology, telecommunications, photonics, optics, defense and security, data analytics and software development

Proportion of Total Ontario ICT Employment

21%

80%

100%

18%

5%

Ottawa

Toronto

Other

Kitchener - Waterloo

60%

14%

2017

Current Trends:

• Ontario is comprised of over 300+ AI firms and institutions, creating a hub of AI-based innovation.

• To support continued growth, Ontario is investing $50 million in the Vector Institute, which will also be supported by the federal government.

Applications of AI in Ontario:

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ARTIFICIAL INTELLIGENCE IN ONTARIO

Retail: Integrate AI is building an AI-powered platform for B2C enterprises to make customer interactions more natural and valuable.

Health: Deep Genomics is aiming to become the world's first AI-based medicine company.

Law: Blue J Legal is using artificial intelligence to make the law more transparent and accessible.

Cybersecurity: Mindbridge provides an advanced fraud detection solution for enterprises based on AI, machine learning and big data.

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CONSTRUCTION

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• Ontario is home to more than 200 consulting engineering firms, 1,600 architectural firms and hundreds of construction companies that work with clients in more than 100 countries.

• It is feasible for Ontario firms to collaborate with foreign governments, communities and organizations to develop cost effective and project solutions locally and worldwide.

• Leading firms include: EllisDon, Golder Associates, MMM Group, Morrison Hershfield and RWDI (Rowan Williams Davies & Irwin).

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One Of The Drivers For Growth For The Construction Industry – The Greater Toronto Area And Its Growing Population

• The Greater Toronto Area (GTA) will experience the fastest growth in the province; 6.6 million in 2015 to almost 9.5 million in 2041. • Toronto’s population is expected grow by

32.4% (from 2.83 million to 3.74 million in 2041).

• Eastern Ontario is also projected to grow with a rate of 24% over the 25 years, from 1.80 million to 2.23 million in 2041. • Ottawa will grow the fastest at 37.7% (from

957,000 to 1.32 million in 2041).

HOW WE CAN HELP

Ontario is Open For BusinessOntario is Open for Business

We make it easier, faster and cheaper for businesses to start, grow and operate in Ontario

Timely Customized Business Intelligence to inform investment

decisions – including data on key business costs in comparison to competing jurisdictions, duties and relief programs for imports and exports, available talent pools and more.

Easy access to local professional services to meet an investor’s

corporate and commercial needs – legal expertise, commercial real estate brokerage, banking and financing, tax and financial planning, marketing, public relations and more.

Tailored insight on business immigration pathways, employee settlement services, talent partnerships with colleges and universities and more.

Early investment-specific assessment and facilitation of

federal, provincial and municipal incentives available to offset expected business costs.

Ready partnerships within the larger government community to understand

relevant local policies and programs and certifications or compliance checks. This includes site permitting and approvals navigation.

Customized Ontario tours for

investors including informational briefings and tours showcasing Ontario regions, suitable sites, available skilled labour, academic institutions and local business partners.

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Contact Us

Giovanni Gonzalez

Senior Business Development Specialist (Europe and India Markets)

Investment Outreach Unit, Trade and Investment Division, Ministry of Economic Development, Job Creation and Trade

Email: giovanni.gonzalez2@ontario.ca

Website: InvestInOntario.com

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