- There are misconceptions about foreign direct investment—that it leads to job losses, consolidation, or that Canadians lose proprietary information—but that is not the case. FDI is the lifeline of the Canadian economy, providing it with necessary capital for R&D, hiring, expanding to new markets and growing your business.
- Canada’s top two FDI advantages are our natural resources and human resources. We have a depth of talent in emerging industries and a richness of resources that attract international investors.
- The Canadian government must be rigorous and robust in reviewing and revising policies that impact the ease of doing business for investors because the international landscape for foreign investment is highly competitive.
Canada is a reliable partner, a reliable hub and a reliable platform in an unreliable world. In Canada, investors have access to 1.5 billion people, we have talent, resources and growth potential. Canadians are smart, creative and Canada offers a hub for global business that will help us escalate our economy to the next level.
Canada’s Key Sectors
The key sectors of Canadian economy—let us just take it from west to east. You have got the oceans, in terms of fisheries; forestry. You are looking at energy—we talk so much about oil and gas, but energy is so much more than that, as we see in Quebec around hydro. You have got manufacturing in Ontario, we have got banking, financial services right across the country.
In terms of high growth and up-and-coming sectors, obviously things to do with artificial intelligence (AI), data, privacy, clean technology—but let me also say, do not short sell the food and energy sectors. If climate change’s impact starts to take shape around the world, the value of food and energy is going to exponentially rise over time.
In terms of foreign direct investment, clearly, there has been a lot in liquefied natural gas (LNG). We see the $40 billion largest investment in the country and there are a lot of people that helped pull that together that are really happy about that project.
“In terms of foreign direct investment, clearly, there has been a lot in liquefied natural gas (LNG).”
I think we are going to continue to see investment in our emerging sectors as well, in terms of what is happening in Montreal, in Toronto, in Alberta, all around artificial intelligence, gaming—so many other things that do not make the front page of the news. And there is a lot of creativity that is taking place in Canada. We are getting to be known for being creative, which is a good brand to have in a world that is changing so fast.
Canada’s FDI Advantages
In terms of advantages for FDI, there are two that jump right out at you. One is natural resources and the other is human resources.
We have a richness of resources that countries around the world are envious of and so clearly, that is a magnet. To have the minds that we do, to have the energy and the capacity that we do, that just speaks volumes to what people are in need of.
“In terms of advantages for FDI, there are two that jump right out at you. One is natural resources and the other is human resources.”
On the human resources side, immigration has been the lifeblood of Canadian economic growth and prosperity. Canada is a very attractive place for international students to come. And while it is important that some of them go back home and contribute to their own countries, their own economy, boy, I would sure like a lot of them to stay here as well because we have seen that they have the skills and the talent and the capability to contribute to the economic growth strategy of Canada.
“Canada has the smartest talent, we are an innovative culture, we are developing the smartest thinkers in artificial intelligence, in clean technology, in fintech.”
And so our ability to communicate to businesses around the world—Canada has the smartest talent, we are an innovative culture, we are developing the smartest thinkers in artificial intelligence, in clean technology, in fintech. These are emerging businesses and opportunities that countries are really doing their homework as to where they are coming.
Canada’s Innovation Strategy
Our innovation strategy is critical to attracting more talent. One of the best examples of that now is the supercluster programs that the government announced. A lot of people say the government should not be in the business of picking winners and losers, I do not disagree with that, but government has a role to play.
In this case, they have been a convener role. They have been able to bring people together and say let us figure out what our capabilities are in these various sectors, and by all accounts and feedback I am receiving, this is a real opportunity for Canada. We are creating these incubators of research and areas where businesses can grow and develop.
“Where we have a challenge is to scale, and this is where, again, investment comes into play is helping us scale up our businesses so that we can be globally competitive and not just locally.”
The Canadian economy is 99% small and medium-sized enterprises (SMEs), and we have a rich culture in the small and medium enterprise, and we are seen to be a very good start-up culture. Where we have a challenge is to scale, and this is where, again, investment comes into play is helping us scale up our businesses so that we can be globally competitive and not just locally.
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FDI’s Importance to Canada’s’ Economy
There are some misconceptions about foreign investment that I think are important, explained and understood. Too often people see it as a one-way street—that investment is only coming into the country and very little of it is going out. The reality is Canada does a lot of foreign investment abroad as well, so we need capital coming in, but we also have capital going out. It is a two-way street.
“Foreign direct investment in some ways is the lifeline, the blood, of an economy.”
There is also a perception that foreign direct investment somehow leads to less jobs or job losses, consolidation that creates ultimately less of a footprint for Canada in the global supply chain; a perception that we are losing Canadian proprietary information of some kind. This is not the case.
Foreign direct investment in some ways is the lifeline, the blood, of an economy. Capital is necessary to innovate, capital is necessary to have R&D, capital is necessary to hire people, capital is necessary to create new markets and to grow your business. And so without that, you are really treading water, if you will. Whereas a foreign direct investment allows you to surge ahead and gives you an opportunity to really grow your business and to grow the footprint of the country at a time in which size matters. And while we are a very large country geographically, we are not so large when it comes to our economy and really we are facing a lot of competition there. So we need to continue to stimulate that growth and foreign direct investment allows you to do that.
“FDI has added value beyond just the capital.”
FDI has added value beyond just the capital. There are human relationships that take place here, there are lessons of best practices that take place here. Any CEO will tell you when a transaction has occurred [that] the hardest part was not the math, the hardest part is the cultural integration and the ability to learn from each other and get that right. But in that process, we are being exposed to different ways of doing things, different ways to run a business, different ways to manage employees, different ways to develop a growth strategy. That learning is essential.
“We should be positioning and marketing ourselves as a truly reliable partner, a reliable platform. In a world of tremendous unreliability, Canada can be the hub.”
We do not have all the answers, no one country has all the answers, and Canada is well-positioned—given our inclusive culture, given our diversity, given our diaspora that comes from all over the world, the linkages—[what] we are able to do is really be an incubator for that kind of investment and that kind of growth. And we should be positioning and marketing ourselves as a truly reliable partner, a reliable platform. In a world of tremendous unreliability, Canada can be the hub.
We have access to North America, we have access to half a billion people in the Asia Pacific, we have access to another half a billion people in Europe. This is a unique platform for foreign investment to form and take shape but also leverage the diversity and the richness of our culture here. And that is a two-way street again: we learn from them; they learn from us.
What Canada Must Improve Upon
Canada’s economy is growing, but again, we measure it as [relative] to others. The question is: are we the best that we can be? And we believe that there is more that we can do to get to that place.
Money has a lot of options. There are a lot of other countries in the world that are desperate to attract capital. We have been doing a very good job of it, but what we need to recognize is that it is a very competitive landscape and countries are trying harder and harder to attract that capital because they do realize that capital is essential to being able to invest in your economy, invest in your people, invest in your resources, invest in innovation, invest in R&D. That is cash. You need cash to do that.
“There are a lot of other countries in the world that are desperate to attract capital. We have been doing a very good job of it, but what we need to recognize is that it is a very competitive landscape”
The question of ease of doing business is central to any decision that people will make in terms of investment. The World Bank does these rankings, my message to Canadians and to Canadian regulators and governments is what may have worked 10 years ago or 20 years ago may not work today. In fact, it is likely not working today. So, we need to be rigorous and robust in reviewing our regulations to ensure that they are achieving the intended outcome.
We need to smarten up because money is mobile, talent is mobile, people are doing their homework. You know, we want to be true to the message that we are delivering that you can come to Canada, you can establish your business here, we will help you do it, we will make it easy. Will we give you a free pass? No, we should not, but there is a predictable regulatory regime that is competitive vis-à-vis other countries because as I said, there is so much choice out there now.
Message to Investors
We are a reliable partner, we are a reliable hub, we are a reliable platform. You will notice the emphasis on the word “reliable,” because we are living in a world of unreliability. And so while I think Canada can be better in the things that we do, that is human nature, we all believe that we can be better—we should believe that—when you look at what is going on in the rest of the world, Canada is a great place in which to establish a hub. It allows you access to over 1.5 billion people from North America, to Asia, to Europe—there is nowhere else in the world that you can do that, and you can in Canada. We have the talent, we have the resources, we have the growth potential.
“We have the talent, we have the resources, we have the growth potential.”
In addition to being a reliable partner and a reliable hub with rule of law and a certain amount of predictability, there is no question that our natural resources are a magnet for foreign investment, as are our human resources, our talent. I think while we are proud of it, we undersell and underappreciate just how important it is for businesses to come to one place and have talent that allows you to say I can help you get back to other parts of the world. And being that hub—that linkage—is a brand that I think we want to continue to promote because while Canadians are nice, and that is our brand globally, I think we can be more successful if we are able to turn that into Canadians are smart, Canadians are creative, Canada offers a hub for global business—that will really help us escalate our economy to the next level.
Vision for Canada’s Future Economy
My vision for Canada’s future economy is simple: be a magnet for talent and a magnet for capital and make it easy to have both here in Canada.