- Canada has a lower cost and lower risk of investment than most countries in the world, access to global markets and the most educated workforce in the OECD.
- Toronto’s top competitive advantages are its diverse economy—one of the most diverse in North America—and its nearly 400,000 students coming out of 18 universities and colleges.
- Toronto is the fastest growing tech centre in North America—employing 290,000 skilled workers—and has a robust innovation ecosystem.
Canada and the Toronto region are a safe haven for foreign direct investment, and Canadians should communicate this to foreign investors looking for a stable and innovative business climate in which to invest. Jurisdictions in North America will look to the Toronto region to lead the world out of the pandemic, and Canada must take advantage of that opportunity.
What makes Canada an attractive country for foreign direct investment? What are some of our advantages and what areas do you think we could improve?
We need to consider what have been our advantages and what will they be as we come out of this pandemic. We have a great opportunity in front of us in Canada to leverage the advantages that we have, and I will go through a couple of them.
First of all, we have global market access. We have 14 trade agreements with 51 countries around the world, and we are the only G7 country that has an agreement with every other G7 country.
Canada has highly skilled talent; we have the most educated workforce in the Organisation for Economic Co-operation and Development (OECD), which is critical. Canada is lower cost and lower risk for investment. This is a great place to invest; we are one of the most competitive cost jurisdictions in the world.
Canada has favorable immigration policies; we attract 100,000 new people in this economy every year. And, we have a good quality of life. Everybody knows that Canada is a great place to live—survey after survey shows that.
But if I can look at three things that are really important to consider that every company looks at with regards to investment: skill, scale and cost. People want to know if they can get great people, if they can get enough of them and if they can get them for a reasonable cost to business. We have that in spades in Canada and the world will know that.
In terms of how we can improve, I think the world is going to be looking for safe harbors as we come out of this pandemic recession. Canada has that in spades. It is incumbent upon all of us in Canada to get the word out that Canada is a great place to invest.
It is also an opportunity to look at our regulatory environment. We talk about different sectors of the economy and what can be done to make Canada an even better place to invest but let us look at some of those regulations in some sectors—whether it is energy or telecommunications—that may be great places to make more appealing to foreign direct investment.
Looking at Toronto specifically, what are the competitive advantages for foreign direct investment that you would highlight?
Toronto has a diverse economy; we all know that—Toronto is one of the most diverse economies in North America. If you look at some of the industries that have driven the economy here, there is film, television, food, beverage, agriculture, financial services, information technology, life sciences—we have it all.
“Toronto is one of the most diverse economies in North America.”
Talent is a real driver. We have 18 colleges and universities in this immediate area. We have 400,000 students in these 18 universities and colleges, which is a significant driver and opportunity for us as a region.
What sectors of Toronto’s economy attract the most foreign direct investment and what major investments would you highlight?
If we look at the Toronto region, there are some really key sectors of growth, and as we go out of this pandemic, we are going to see opportunities around supply chain and advanced manufacturing. I am going to touch on two that had been really driving the economy over the last number of years, and they are the financial services and the technology field.
If we take a look at financial services, there are 10,000 businesses in the Toronto region employing 280,000 skilled workers. We have the Toronto Stock Exchange (TSX), the third largest in North America, known as the centre for many sectors including mining.
Toronto has grown significantly in the last five years in the financial services area, more than any other centre in North America. One example of a company that has come here is HSBC Banking. They looked around the world to set up a new operation and worked with Toronto Global over a number of years to create a new data innovation centre representing a significant opportunity for the region.
“Toronto is the fastest growing tech centre in North America, employing 290,000 skilled workers in this region alone.”
If I look at technology, Toronto is considered either the number two or number three centre in North America for technology. Toronto is the fastest growing tech centre in North America, employing 290,000 skilled workers in this region alone, and we have had a lot of success in the last number of years. One major investment is Cognizant, a Fortune 500 company setting up in Mississauga, employing 400 highly skilled workers. These two sectors, they have been really key drivers in this economy, and they will continue to drive this economy in the next decade or so.
Content continues below ↓
What are some of the factors that make it easy for investors to come to Toronto? What is the ease of doing business?
Companies around the world look for a few things; they want to be welcomed, they want their decision to be easy and successful. And that is why it is important for groups like Toronto Global, our partners in Invest in Canada or the municipalities to really be welcoming, to know what we are talking about and to make the decision easy for our companies. Companies want to make sure they can get good people at a reasonable cost to business, and the Toronto region—compared to other places around North America—is an easy place to do business. Business is easy, there are low regulations—but important ones in place—and a cost to business that could be 20% to 30% lower than another jurisdiction in North America. There is a lot of great talent—these are some of the things that companies consider.
Is there also a business culture that makes it more attractive?
If I just take a look at the innovation that is going on in this region, it is striking. There is nothing like this in North America and in many other parts of the world.
From an innovation perspective, we have a fantastic ecosystem here. There are 2,000 tech startups in the area. We have world leading accelerators like MaRS Discovery District, Creative Destruction Lab, DMZ, ventureLAB in Markham; we have things happening like Spark Centre in Durham and HalTech in Halton Region. There is so much going on here—MaRS Discovery District alone is 1.5 million square feet with 120 tenants, and we have the Vector Institute, one of the leading centres in artificial intelligence in the world.
“This region really needs to step up and lead the country and North America as we come out of this pandemic.”
There is so much going on here and having lived a number of years outside Toronto, many parts of the country look to Toronto to lead. There is so much going on in this region from an innovation perspective with new businesses—it is a beacon for foreign investment. This region really needs to step up and lead the country and North America as we come out of this pandemic.
Do you feel that during an event like the global pandemic—which is casting a lot of uncertainty and even fear in people around the world—Toronto and by extension Canada can become a safe haven for investors?
This is Canada’s time. We have everything in place—we are a diverse economy. If I look at the Toronto region itself, 51% of the people in Toronto were born outside of Canada. We attract immigrants from all over the world, it is a multicultural society, and it has a fantastic business climate.
The world is going to look for safe havens and Canada and the Toronto region is a safe heaven. It is going to be a beacon in foreign investment, and it is incumbent upon all of us to talk about the great things that are happening in this region. I truly believe that this is going to be a fantastic opportunity and not just for the Toronto region but for this country as we move forward. We have it all; we have a fantastic talent base, a welcoming society, a great quality of life, great businesses, a world leading banking sector, great financial services and IT. I truly believe that this is our time.
What is the importance of foreign investments to Toronto’s and Canada’s economy?
There is essentially four ways I look at to drive an economy: exports—selling your product or services around the world; entrepreneurship—creating great startups; productivity—increasing your productivity; and investment, these are all really critical elements.
This is a really competitive world, and every jurisdiction in North America and around the world is looking to bring new investment into their area. Why? First of all, it creates great jobs, drives GDP growth and drives income for your area in tax revenue. This is how Canadians pay for things like healthcare and education. So foreign direct investment is absolutely critical to the growth of any region, and it is something that we will continue to focus on in Canada.
I believe as places around the world look for safe havens, Canada is a safe haven; we are close to the United States, and we are very similar in many ways to the US, but we are also Canada. We have a lot of advantages that other places including the US do not have, so driving new investment into this region is going to be critical and I really want all Canadians to know just how important this is.