Canada’s Competitiveness in the Global New Economy

Published on July 27, 2021

Takeaways

Canada has strong trade agreements with all the G7 countries and continues to work towards strengthening partnerships all over the world.
With a world-class education system, Canada is now known as one of the most highly educated countries in the world, producing key talent for various industries.
The supportive environment in Canada has enabled thousands of startups to launch, serving as a great innovation base for critical and creative solutions.

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Canada has stellar trade agreements, great talent, access to resources, and a strong environment of collaboration among startups, private enterprise, and the public sphere. As a key player in major emerging sectors such as cleantech, artificial intelligence, and hydrogen, Canada has all the ingredients to be a world leader in the future economy.

How would you characterize Canada’s global competitiveness for attracting foreign direct investment?

Canada has a lot of great characteristics that make it very strong for foreign direct investments (FDIs). First is its location. Canada sits north of one of the biggest economies in the world. We have a very strong trading relationship with the US. As both the US and Canada move towards more of a low-carbon, net-zero economy, there is a lot of alignment for us in terms of strategies and working together. Beyond the United States, there is also the G7, a strong trading partner for Canada. Canada is the only G7 country with free trade agreements with all other G7 countries. It is no secret that Canada is also very rich in resources. With its strong trade partnerships and rich resources, Canada can play a huge role in the global new economy and attract a lot of great foreign investment.

“A large concentration of startups is absolutely critical for an economy to grow with innovation.”

Secondly, Canada also has a growing network of startups. We have technology hubs such as the Toronto-Waterloo hub with 5,200 new startups. A large concentration of startups is absolutely critical for an economy to grow with innovation. We cannot have all the solutions ourselves, which is why partnerships are important. BASF partners with companies such as Plug and Play to drive innovative solutions from startups and bring them to scale.

The third factor for Canada’s global competitiveness is a highly skilled workforce. Canada has one of the most educated workforces in the world. Nearly 58% of Canadians between the ages of 25 and 64 have a post-secondary education. Additionally, according to a recent survey done by Boston Consulting Group (BCG), Canada has now surpassed the US as the top destination for highly skilled labour for the first time. The availability of talent is an area that sets Canada apart from many other countries. We are becoming extremely attractive for companies to invest in.

Which sectors of the Canadian economy hold the most promise in terms of growth?

A low-carbon, net-zero economy holds the most promise for Canada. A lot of companies are putting out ambitious targets for this and there are several countries going towards that route and supporting that growth. There is a huge opportunity for companies like BASF to leverage our portfolio and work with ecosystem partners to get ahead of this trend.

There are also growth opportunities for enabling and supporting a circular economy. This touches multiple industries and sectors, from everyday packaged goods to big materials in the automotive and construction industries. There is a massive opportunity for innovation and technology to help optimize these resources and how they are used.

“One company cannot do everything itself, but through partnerships, we can drive solutions along,”

In Canada, we also see many jurisdictions driving extended producer responsibility (EPR) to divert waste and make sure we can keep materials in the loop. There are solutions to produce materials through mechanical recycling, compostables, or even advanced or chemical recycling. For each of these areas, BASF has solutions. We have certified biodegradable plastics, plastic additives to enhance the recyclability of materials, and chemical recycling procedures that target mixed plastic waste and produce naphtha, which is used as a feedstock. One company cannot do everything itself, but through partnerships, we can drive solutions along with digital solutions that enable us to keep materials in the loop and drive them into the next phase of life.

Finally, there is also hydrogen. The hydrogen piece actually plays a very significant role in the growth of the low-carbon economy. It has applications in transportation, energy, heating, and more. Canada is in one of the best positions to be a leader in the hydrogen economy. We have access to feedstock, a well-established energy sector, and strong distribution and export channels. All these areas together can become a huge competitive advantage for Canada in the future.

How would you rate Canada’s competitiveness in terms of talent?

It does not matter which report you look into right now—Canada actually ranks very high in attracting talent. The quality of Canada’s educational system, favourable working conditions, high participation of women in the workforce, a good employment rate, and economic stability are all the reasons why. At BASF Canada, we want to leverage that. We know that our employees are the key to our success. Diverse and engaged employees bring the best in terms of fresh ideas and creative perspectives that we can offer to our customers as solutions. We need to continue to attract foreign workers and make sure our domestic workers remain highly engaged and developed continuously. Talent will play a key role in Canada’s post-pandemic economic recovery.

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How would you rate the quality of Canada’s innovation ecosystem?

Canada has great access to startups and innovation hubs that many businesses can leverage to support their growth. At BASF, we leverage strong partnerships with various startups to better serve our customers, and we try to find innovative solutions to the challenges facing our industry. Plug and Play is one of our partners in Canada and we continue to leverage that. The innovation they bring to us is critical. The quality of this collaboration needs to be quite high, especially now that we have seen the impact of the COVID-19 pandemic on manufacturing and supply chains. As we recover economically, we need to recognize that manufacturing infrastructure is aging. As such, it is critical for Canadian companies to find digital solutions and smart manufacturing processes that use cutting-edge technology to maximize efficiency and reduce the complexities in everyday decision-making in order to be successful in partnerships with other companies.

“Bigger companies like BASF have a long-established market presence and can bring startups knowledge and resources to help scale up their technologies.”

In the end, innovation and digital solutions are the only great sustainable solutions, but they also need scaling. Startups in the innovation ecosystem can bring new business ideas. Bigger companies like BASF have a long-established market presence and can bring startups knowledge and resources to help scale up their technologies. It is an ecosystem partnership between established companies like BASF and startups that are looking to scale their ideas.

Why should foreign investors consider Canada over other options?

What is unique about Canada is that it is primed to be a leader in this new economy. It has strong trade relationships not only with the US but also with the G7 countries, and it forging more relationships globally. It has a highly skilled and diverse workforce and it has access to critical resources. Its government is becoming more pro-business in terms of the new economy, and by working together, our stakeholders can really address critical issues. We have the benefit of having rich resources. Canada should push forward with our highly skilled labour and our trading partners to make sure our value chains are forward-integrated so we can garner maximum value. Canada is one of the most low-risk investment destinations globally. There is no question that Canada should gain more foreign investment for the new economy going forward.