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CANADA – STRONG; STABLE; SUSTAINABLE
Canada Market Overview
November 2010
Alireza Rafiee
Director, Market Development
Austrade Toronto
CANADA – STRONG, STABLE, SUSTAINABLE
OVERVIEW
• WHY CANADA!
• MINING, OIL & GAS OPPORTUNITIES
• AUSTRADE PROJECTS AND EVENTS
• HOW WE CAN HELP YOU
Yet both nations have a lot of strengths
• Both survived the GFC relatively well
• Both have well regulated financial services sectors
• Both have excellent universities
• Both have active research programmes
• Both are resources rich
• Both have growing services sectors
WHY CANADASolid fundamentals:
Canada has a lot to offer as a business partner:
• Open economy
– receptive to new ideas/approaches
• an open and attractive free enterprise environment, ranked by the Economist
Intelligence Unit as the best place to do business in the G-7 this year and over the
next four years;
• the strongest fiscal position in the G-7;
• low corporate taxes, with the lowest overall tax rate on new business in the G-7;
• among the fastest rates of economic growth in the G-7 in 2010 and 2011, according
to the International Monetary Fund;
• a skilled workforce,
• a high quality of life;
• Strong import culture
• Relatively short supply chains;
• a vibrant environment for innovation, with one of the most advantageous research
and development tax incentive programs in the industrialized world; and
• a strong commitment to good governance and the rule of law.
Positive Business Climate
Business Environment of Top Ten Countries,
Rank for Forecast Period 2008-2012
10th
9th
8th
7th
6th
5th
4th
3rd
2nd
1st
Denm
ark
Finlan
d
Singap
ore
Canad
a
Switzer
land
Hong
Kong
Nethe
rland
s
Austra
lia
U.S.A
.
Sweden
Ran
k
The Economist Intelligence Unit's Business
Environment Rankings
The Economist business rankings model measures the quality and attractiveness of the business environment in the 82 countries
It examines ten separate criteria or categories:
political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labor market and infrastructure.
Source: The Economist Intelligence Unit, April 2008
The Economist Intelligence Unit's Business Environment
Rankings - Canada Positive Business Climate
Business environment ranks and scores
2008 – 12 2003 - 07 Change
Denmark 1 2 1
Finland 2 3 1
Singapore 3 1 -2
Canada 4 5 1
Switzerland 5 7 -2
Hong Kong 6 6 0
Netherlands 7 8 1
Australia 8 12 4
USA 9 4 -5
Sweden 10 11 1
Ease in Establishing a Business
• Canada ranks first among the G-7 for the fewest number of days required
for establishing a new business.
Duration (days)
3
67
13 13
14.9
18
23
0
5
10
15
20
25
Canada U.S. France U.K. Italy OECDAverage
Germany Japan
Canada’s over heavy reliance on the US
• 73% of Canada’s mercantile export trade is with the US and 62% of imports
– ($270 billion vs $186 b)
• Services trade is similar: 52% and 56%
• Growth in bilateral trade between Canada and the U.S. has averaged almost 6.0% annually over the last decade
• US alone was responsible for 82% of decline in Canada’s exports and 62% imports during the GFC
• The United States is also the largest foreign investor in Canada and the most popular destination for Canadian investment
• The reasons are obvious:
– Of Canada’s 20 largest cities, 17 are within a two hour drive to the US border
– Canadian production hubs closer to U.S. markets than many American production sites
– US Canada (and Mexico) FTA
– Open, integrated economy (esp in autos and food)
– Disproportionate size of US cf Canadian companies
And on European Union, but less with Asia
• 10% of Canada’s mercantile export trade is with the EU and 12% of imports
• Services trade is : 9% and 10%
• But a limited trade with Asia:
– Canada’s exports to rest of the world were 19% and imports 26%
– And services, 29% and 27%
– ($11 billion exports to China; $39 bn imports)
– ($2 bn each way to India)
• Canada is aware of the need to diversify its trade markets to Asia:
“Canada cannot afford to waste one minute in turning those numbers around,”. “Despite massive fiscal
and monetary stimulus, the West is still struggling with slow growth, high government and consumer
debt, and stubborn unemployment levels. Meanwhile, the emerging economies of Asia are now
resuming their pre-recession growth and employment levels. That’s why helping Canadian companies
to take advantage of opportunities in Asia is critical.” Export Development Canada
Canada – Australia – a natural fit!
More like Home than Away!
• Similar population size and GDP per capita ($46,500)
• Similar culture and business practices
• Similar government structure and policies
• Same legal system
• Similar sized businesses
• Relationship based business
• Largely urban-based population, spread thinly along US border.
• Large empty interior
• Strong mineral and agricultural base to economy
• Strong import culture; generally open markets
• Multi-cultural society
• As small countries with a population of only 22 and 32 million we have to make our way in the world and that will be best achieved by building a competitive business environment through cooperation and investment in each others markets
Austrade Canada
• 1 Canada team
78+ years of Austrade experience in marketing team
3 marketing teams (cover all Canada)
• Energy, Mining, Environment Team
• Education and Financial Services Team
• Agriculture, Food & Wine
1 Consular team (covers all Canada)
• 9 Marketing + 4 Consular + 1 Office Manager
• 3 locations (Vancouver, Toronto & DM in Montreal)
Canada – Australia Connection
2-way trade is $C4.2+ billion
• Approx. 2,000 Australian companies export to Canada
• Each ranks in the other’s Top 20 trading partners
• Major imports from Australia – alumina, wine, medical products, nickel ores
education services and business services
• Major exports to Australia – telecom equipment, pork, iron ore, aircraft parts,
professional and business services
2-way investment is around $C40 billion ($30 Aus; $10 Can)
• Over 80 Australian companies have established offices in Canada
• Canada is Australia’s 3rd largest investment destination with mining,
infrastructure, retail, finance, and technology leading the way
• Major Canadian investors in Australia, both for our domestic market and as
a base for Asia/Pacific
17
Canadians in Australia Australians in Canada
Barrick
Brookfield Asset Management
CAE
Bombardier
CHC Helicopters
Hatch
Golder
SNC
Gemcom
ATCO Power
ATCO Structures
McCain Foods
Trans Alta
RBC Capital Markets
Viterra
CGI
Pratt & Whitney Canada
Nortel
Mitel
RIM
Enerflex
Apotex
BRP (Bombardier Recreational Products)
Teck Cominco
Cameco
Uranium One
Ivanhoe
Lululemon
Bioniche
Institutional Investors (CPP, Ontario Teachers, Caisse, etc.)
Rio Tinto
BHP
Macquarie Group
Plenary Group
Worley Parsons
Ausenco
Transfield
United Group
Computershare
ALS Labs
Flight Centre
Bakers Delight
Packer Casinos
Charles Sturt
University
Navitas
Swannsinos
Amcor
Orica
Ansell
Brambles
Bradken
Pharmaxis
NAB/Presima
Stirling
Products
Billabong
Lend Lease
Sentient
Caroma
GHD
Nupress
Silver Thomas
Hanley
Architects
Leading Investors
Austrade’s priority sectors in Canada
• Education and University R & D collaboration and
commercialisation
• Clean Tech – Renewable Energy
• Mining and Oil & Gas technology and services
• Financial Services
• Wine
Mining sector – Canada Snapshot
• Canada is the fifth largest energy producer in the world
• Canada is the world’s 3rd largest natural gas producer
• Canada is the world’s 8th largest crude oil producer
• Canada is the largest supplier of energy to the United States
• Canada, with 179 billion barrels in oil sands reserves, ranks 2nd only to Saudi Arabia in global oil reserves
• Canada rank among the top five countries in the production of 14 major minerals and metals
Mining sector – Canada Snapshot
• Mining in all provinces
• Mining industry contributed $42billion to Canada’s GDP in 2007
– $10 billion in mineral extraction
– $32 billion in mineral processing and manufacturing
• The industry employs 363,000 Canadians
• The industry accounts for 19% of annual Canadian goods exports
Inflation Comparison - Canada / Australia / USA
Annual Inflation
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2000 2001 2002 2003 2004 2005 2006 2007
Infl
ati
on
Ra
te (
%)
Canada USA Australia
Mining Global Centres
• Toronto is the mining finance capital of the world
• TSX handled 80% of worldwide mining equity transaction in 2007/08 (home to 400 mining exploration company offices & over 30 head offices)
In the last 5 months, six Australian mining companies have listed on the exchanges. In 2009, Australian companies raised a record $2.2 billion in mining equity capital on Toronto Stock Exchange and TSX Venture Exchange
• Vancouver is the world’s leading cluster of exploration companies (850 offices & 400 mining consultants and related suppliers)
• Montreal houses important aluminium and iron ore companies
• Edmonton & Calgary are global centres for oil sands expertise
• Saskatoon has become global centre for uranium and potash
- 3 -
Trail(lead, zinc)
Elk Valley (coal)
Saskatoon/
Esterhazy(potash, salt)
Flin Flon(gold, copper, zinc)
Kamloops(copper, molybdenum,
gold)
Vancouver (allied industries,
junior exploration/
mine financing)
Kitimat(aluminum)
Fort McMurray (oil sands, allied industries)
Yellowknife(diamonds)
Thompson(nickel, cobalt)
Toronto(allied industries,
senior exploration/mine
financing)
Sudbury(nickel, copper,
cobalt, gold, pgm,
allied industries)
Timmins(zinc, copper,
lead, gold)
Val-d’Or(gold, copper,
zinc, allied industries)
Windsor (gypsum)
Bathurst(zinc, lead)
Thetford Mines(chrysotile)
Labrador City/Fermont
Sept-Îles(iron, aluminum)
Saguenay(aluminum)
Athabasca(uranium)
Rouyn-Noranda(copper, allied industries)
Minerals and Metals in Canada
Red Lake/
Hemlo (gold)
Fort
Saskatchewan(nickel)
Bécancour(aluminum, magnesium)
Montréal(allied industries)
Raglan(nickel, copper)
Voisey’s Bay(nickel, copper, cobalt)
Whitehorse(exploration for base metals,
gold, and coal)
Nunavut(exploration for
Diamonds, iron, coal, and
base metals)
East to West
• As January 08, there were 766 mining establishments in Canada.
• Mineral production was $40.4 billion in 07
– $10.7 billion or %26 generated in Ontario
– BC & Quebec each had 14%
• Growth in Saskatchewan since 1997 due to the increased market
price of Uranium and Potash
• Growth in Labrador in the past two years – since the Vale Inco
nickel-copper mine opened
• Top three jurisdictions for gold production in 07 were Ontario,
Quebec & BC
• Nickel was Canada’s top-valued mineral in 07 followed by copper,
potash, coal, uranium, iron ore, gold, zinc, cement & diamond
• An estimated 9200 new workers will be needed per year to meet
anticipated production target
Some of the Key players in Canada market
• Rio Tinto Alcan
www.riotintoalcan.com
Rio Tinto Alcan is one of five product groups operated by Rio Tinto, a leading international mining group. Alcan is a global supplier of high quality bauxite, alumina and aluminium. Alcan is engaged in bauxite mining, alumina refining, and aluminium smelting.
• Barrick Gold Corporation
www.barrick.com
Barrick Gold is the largest pure gold mining company in the world, with its headquarters in Toronto.
• Xstrata
www.xstrata.com
Xstrata is a major global diversified mining group, listed on the London and Swiss stock exchanges. Xstrata has projects in East Coast Canada.
Some of the Key players in Canada market
• Teck Resources
www.teck.com
Teck is a diversified resource company committed to responsible mining and mineral development with major business units focused on copper, metallurgical coal, zinc and energy.
• Gold Corpwww.goldcorp.com
Goldcorp is the lowest-cost and fastest growing senior gold producer with operations and development projects situated in low political risk countries throughout the Americas.A Canadian company headquartered in Vancouver, Canada, Goldcorp employs more than 10,000 people worldwide.
• Valeinco www.valeinco.com
Vale Inco is a wholly-owned subsidiary of Vale (Vale S.A.) of Brazil. Vale is the second largest mining company in the world, with a market capitalization of more than US$ 125 billion. Vale Inco has over 12,000 employees worldwide and had net sales last year of over US$8 billion.
Some of the Key players in Canada market
• Cameco Corporationwww.cameco.com/mining
Cameco is a world leader in low-cost uranium production. Their operations provide 16% of world mine production and they have approximately 480 million pounds of proven and probable uranium reserves and extensive mineral resources.
Cameco has controlling ownership of the world's largest high-grade uranium reserves and low-cost operations in northern Saskatchewan, Canada.
• Inmentwww.inmetmining.com
Inmet is a Canadian-based global mining company that produces copper, zinc and gold. We’re active in production, development and exploration — three key components to delivering sustainable growth and long-term value for our shareholders.
• Kinross www.kinross.com
Kinross is Canada’s third largest gold producer, running a portfolio of mines in Russia, Brazil, Chile, America and more. Kinross employing approximately 5,500 people worldwide. It is the third-largest gold mining company in North America by reserves and seventh in the world in production.
Minimum Investment Restrictions
• No barriers to foreigners establishing a new business in
Canada’s minerals and metals industries
• Equal treatment for domestic and foreign investors
• Investment Canada Act
– 100% foreign ownership
– Restrictions on Uranium
Taxation Regime
• Federal corporate income tax
– Tax rate is 19.5%
• Provincial and Territorial taxes
– The corporate income tax generally follows federal
income tax rules – rates 9.9% to 16%
• Reducing corporate tax rate to 15% by 2012
Oil Reserves – Driving Alberta Economy
Canada Iran Iraq Kuwait UAE Venezuela Russia Libya Nigeria U.S.A
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Current Canada Team Focus
• Expand our customers database
• Explore new business opportunities in Canada market
• Working closely with
– Canadian Mining Association
– Canadian Institute of Mining (CIM)
– Prospectors & Developer Association of Canada
(PDAC)
– State Governments in Australia and Canada
– Austrade Mining team in Australia, US, and LAT
America
Austrade Canada Program for Mining
• Prospectors and Developers Association of Canada Trade Show and
Conference
– Largest mining finance and exploration trade event
– March 2011 Toronto
– Fourth year, with a highlight this time on introductions to Canadian
sources of finance for exploration in Latin America
• Canadian Institute of Mines Trade Show and Conference May 2011
Montreal
– Second Australian participation
• Go Expo Oil and Gas Trade Display June 2011 Calgary
– Fourth Australian mission to this and alternating Global Petroleum Show
– Largets oil & gas show in Americas
Useful websites
We suggest you visit the following sites:
• Natural Resources Canada
• Prospectors and Developers Association of Canada
• Canadian Mining Association
• Canadian Association of Mining & Services for Export
CAMESE
• Minerals and Mining Statistics Online
• Canadian Institute for Mining, Metallurgy and Petroleum
Planned Events 2010-2011
Event Location Dates
Education Internationalisation Roadshow Vancouver Toronto Montreal Sept 2010
Universities Research Mission – Life sciences Vancouver Toronto Montreal Nov 2010
Superannuation Funds Mission to Canada Toronto Montreal 21-23 February, 2011
Prospectors and Developers Association of Canada Show and Conference – Explorers financing mission
Toronto 6-9 March 2011
NSW Clean Technology Mission to Americana and Universities Research Mission
MontrealVancouver Toronto
21-25 March 2011
Canadian Institute of Mines Trade Show Montreal 22-25 May 2011
NAFSA,, Universities Conference Vancouver 29 May - 3 June
Go Expo Oil & Gas Show Calgary 7-9 June 2011
Discover Australia Wine & Food Shows Toronto Vancouver, Montreal, Calgary
June 2011
Go Global Show (education), Vancouver Toronto Montreal September 2011
Green Build Toronto 5-7 October 2011
How we can help you?
• Identify market opportunities
• Market research
• Access to key customers/govt officials
• Trade events and trade missions
• More strategic approach to Region; shared knowledge of
markets in Region
• Ability to migrate clients within Region; shared
knowledge of clients within Region
• Inward/outward investment facilitation
…you get to learn about Hockey and support a
Team
Hockey is Canada’s game
Our aim is to convince Australian exporters
and investors to capitalize on the huge
opportunity that Canada presents
due to its many similarities with
Australia