1. Overall Lower Costs
Based on a 2016 study by KPMG, the excellent price of operations in Canada—taking into consideration the cost at work, facilities, transportation, utilities, taxes and regulations—is 14.6 % under a similar operation in america. This provides Canada an aggressive edge on not just the united states, but additionally other industrialized nations like the United kingdom, Australia, Germany and Japan.
The KPMG report discovered that Canada’s finest comparative advantage is incorporated in the inexpensive of development and research. The Research and Experimental Development Tax Credit provides Canadian companies using more than $4 billion in tax incentives yearly, pushing the price of Canadian R&D 27 percent below those of similar research in america.
2. Trade Contracts
Like a global buying and selling partner, Canada is opening its economy around the world. The federal government’s Global Markets Plan Of Action, adopted in 2007, laid the research for negotiating free trade contracts (FTAs) within the third world. The program has led to agreements throughout South and Guatemala, in addition to contracts presently under settlement with Caribbean nations and also the parties towards the TransPacific Partnership.
Canada may soon enjoy free trade over the planet. The Canada-Columbia FTA has eliminated most tariffs between these nations, and also the Comprehensive Economic and Trade Agreement awaits ratification by European parliaments to spread out the eurozone to Canadian goods. Ongoing negotiations with Japan would complete the country’s tariff-free accessibility world’s largest consumer markets.
3. Workforce Development
The Planet Economic Forum’s comprehensive way of measuring human capital ranks the Canadian workforce because the world’s second-best educated and also the tenth best overall (outranking the united states, which arrived 16th). The Canadian workforce can also be probably the most flexible within the planet,1 because it lacks most of the limitations and labor protections which will make on-demand staffing impossible within the eurozone.
The Canadian population enjoys similar amounts of educational attainment to individuals based in the US, with 64 percent of adults holding a postsecondary degree. The country’s science, technology, engineering and math (STEM) students now take into account 18.6 % of graduates, for as many as a couple of.two million workers with technical levels. Over fifty percent of Canadian doctoral levels are awarded in STEM fields.
4. Stable Banking System and Competitive Currency
Canada has in the past been, but still is, a really stable and efficient banking system, with home-grown Canadian banks dominating the landscape and operating across the country. Banking details are exchanged between your domestic banks multiple occasions during the day, which creates numerous efficiencies unavailable in america, for example no float being assigned on deposits (i.e., whenever you deposit a cheque, you instantly receive value for that deposit). Banking in Canada continues to be greatly paper based, so while electronic payments take presctiption the rise— based on the 2016 AFP Electronic Payments Survey, 70 % of companies plan to convert many of their payments from check to electronic over the following three years—checks remain the most popular mode of payment, with lots of companies benefiting from the mail float to handle their funds.
The United States dollar’s sustained rise makes American operations relatively costly around the global stage, however the Canadian dollar has declined 21.6 % from the dollar since 2014, driving lower the price of conducting business in Canada.
The Financial Institution of Canada seems to become carrying out a similar trajectory for financial policy to that particular from the European Central Bank and also the Bank of Japan. While America’s Fed began to tighten financial policy in 2016, Canada held its target rate of interest steady at .five percent. Core inflation in Canada averaged just 1.five percent in the last year, alleviating pressure around the central bank to boost rates of interest soon.
5. Natural Sources
Canada’s exports have lengthy been covered with its extensive natural sources and farming goods. Oil makes up about a complete 20 % of Canadian exports, with gas offering another 3.five percent. Metals and farming goods each constitute roughly 10 % of exports, producing nearly as much value because the nation’s automotive sector. The abundance of natural sources, coupled with a comparatively small population, makes Canada an attractive place to go for extraction and processing industries.
6. Clean Energy
In November, the Canadian Minister of Atmosphere and Global Warming announced an agenda to phase out coal-fired electrical plants by 2030. The proposal requires investments in clean souped up that will shift 90 % of one’s generation to non-green house-gas-emitting sources within the coming decade.
Presently, hydroelectric dams produce 59 percent of Canada’s power, with nuclear and wind adding another 16 and 5.2 percent, correspondingly. Montreal and Vancouver benefit from the least expensive electricity associated with a United States metropolitan areas.2 For businesses with climate-conscious consumers, Canada provides the planet’s least carbon-intensive power.
7. The United States Connection
The Canadian economy is carefully tethered towards the US. America may be the top place to go for Canadian exports, and also the nation’s large automotive sector is extremely dependent on the shared United States market. The Canadian economy is stabilized by its ties towards the US—a downturn in domestic consumer demand would probably be blunted by the simplicity of supplying the bigger American market. However, this brings risks—if America’s appetite for Canadian goods falls, the ripples is going to be felt throughout Canada’s economy.
8. Fiscal Stimulus
Canada’s incoming Liberal government has announced a fiscal stimulus measure comparable to USD $91 billion, which offers to jumpstart economic growth and enhance the nation’s transportation, electrical and telecommunications services. The Canadian government’s relatively low debt-to-GDP ratio should allow extensive deficit spending without risking blowback from bond markets.