With clean air, clean living and a clean bill of corporate health, Canada is fast becoming the place to do business.
In 2004, the Economic Intelligence Unit ranked Canada first in its global business rankings, finding it the best country in the world in which to conduct business over the next five years.
You can see why; with a blossoming economy, excellent social and humanitarian standards and a low cost of living; Canada is highly attractive to any corporate interest.
Vast, beautiful and condusive to business
Canada’s real GDP growth averaged 3.6% from 1999-2003, the best performance of any G-7 (now G-8) country and is expected to have continued this trend during the 2004-2006 period.
In KPMG’s 2004 Competitive Report, Canada came out as the lowest cost country in 9 of the 17 industries studied, including aerospace, speciality chemicals, electronics assembly, medical devices, pharmaceuticals, wireless communications, biomedical research, clinical trials and back office/call centres.
The average Canadian federal/provincial corporate tax rate is now 2.3 percentage points lower than the comparable average US federal/state rate and this average will increase to 3.4 by 2008, with the elimination of the federal capital tax.
The NAFTA agreement, signed in 1992 by Canada and the US, created the world’s largest trade partnership, with two-way trade amounting to $645bn in 2003, or more than $1.2m dollars a minute in trade.
Direct access to North American market
Under NAFTA, Canada has direct access to the North American market and many Canadian production hubs are actually closer to U.S. markets than American equivalents – of Canada’s 20 largest cities, 17 are within an hour-and-a-half’s drive of the US.
According to Mercer Human Resources Consulting’s annual quality-of-life survey which studied 205 world cities, five Canadian cities were ranked among the top twenty five.
In the latest United Nations Human Development Report, Canada was ranked first among G-8 countries and fourth among 177 countries surveyed – the report covered life expectancy, educational advancement and real income.
Canada also ranks highest in the G-8 countries for environmental sustainability, safe working and living conditions and a fair judicial system.
With a population of 31.5 million, Canada has one of the world’s most multilingual societies – over 100 languages are spoken as the mother tongue, with English (58.6%) and French (22%) predominant.
Exciting possibilities
Currently undervalued by UK business, the Canadian market offers exciting possibilities for small and medium-sized exporters in most business sectors, including services.
Major UK exports to Canada continue to be oil and related products, transport equipment, power generating machinery, food and drink, pharmaceuticals and organic chemicals.
A foreign company considering setting up an operation in Canada has a number of options: the sole proprietorship, the general partnership and the corporation.
Joint ventures and limited partnerships have also become popular and a foreign corporation may also set up a branch or a Canadian subsidiary corporation.
Sole proprietors have, obviously, fewer associated regulations and all profits are taxed in the individual’s hands at rates applicable to them.
General partnerships are governed by provincial law and registration requirements. A corporation is a legal entity made up of shareholders and is the most common form of business for foreign companies establishing a presence in Canada.
A firm can be incorporated either federally, under the Canada Business Corporations Act (CBCA), or pursuant to the provisions of another federal act.
They can also merge under one of the provincial acts respecting corporations or by a special act of incorporation by the federal parliament or one of the provincial legislatures.
Business Immigration Program
Canada’s Business Immigration Program aims to attract three types of business people for permanent status: investors, entrepreneurs and self-employed persons. The Immigrant Investor Program seeks to lure experienced investors and capital to Canada.
Investors must demonstrate their business acumen, a minimum net worth of CDN $800k and make an investment of CDN $400k.
Entrepreneur Program
The Entrepreneur Program requires people who will own and actively manage businesses in Canada and thus who will contribute to the economy and create jobs. Entrepreneurs must show their experience, a minimum net worth of CDN $300k and are subject to conditions upon arrival in Canada.
Finally, self-employed persons must have the intention and ability to create their own employment. They are expected to contribute to the cultural or athletic life of Canada. This category also allows ‘self-employment’ to include purchasing and managing a farm in Canada.
