Why Trade Matters

Success Stories

Canada: A Good Place to Invest

International Trade Minister Jim Peterson has recently intensified the promotion in Canada and abroad of foreign direct investment (FDI). FDI is key to Canada’s productivity, allowing access to new technologies and know-how.

For prospective foreign investors, Canada’s case is undoubtedly a compelling one. With strong economic fundamentals, including eight consecutive federal budgetary surpluses, Canada finds itself in an enviable position, with an economic record unmatched by any other world-leading Group of Seven (G7) economy. Among G7 nations, since the balanced federal budget in 1997, Canada has achieved the best debt-to-GDP ratio, the best job creation record and the fastest growth in standard of living. According to the Organisation for Economic Co-operation and Development, Canada is the only G7 nation expected to be in surplus in both 2005 and 2006. These factors combine to make Canada one of the best countries in which to invest. But that is not all. According to the Economist Intelligence Unit, Canada will be the best country in which to do business over the next five years. And a 2004 KPMG study revealed once again that, of the 14 countries studied, Canada is the most cost-effective place in which to do business, with a nine-percentage-point cost advantage over the United States. This issue of the Success Stories features companies from around the world that are successfully banking on Canada’s comparative advantages through investments in Canadian businesses.

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Japanese Giant Continues to Invest in its Prairies Facility
Hitachi Canadian Industries Ltd.,
Saskatoon, Saskatchewan

Hitachi Canadian Industries Ltd. (HCI) started manufacturing components for the Canadian power-generation market in 1989, with 30 employees. Since that time, approximately $45 million has been invested in the Saskatoon plant, which has grown to 240 people and 13,935 square metres, becoming one of the Japanese company’s most productive sites.

As Hitachi’s first manufacturing facility for heavy electrical machinery to be built outside of Japan, the Saskatoon plant has become a world leader in heavy steel manufacturing. “The growth of our Canadian operations can be attributed in large part to our location,” says Murray Daku, General Manager of Sales & Technology at HCI. “Saskatchewan offers a distinct geographic advantage in terms of central access to North America, as well as a competitive business cost structure. We also benefit from a top-notch workforce thanks to the solid work ethic of our employees, many of whom originate from a rural background.”

Along with serving the power-generation industry in Canada and internationally, HCI continues to diversify its customer base by seeking new markets, such as the oil and gas and wind power sectors. Its products range from very large components, including wind towers and casings for steam and gas turbines, to much smaller precision parts and hardware.

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Thriving in the Maritimes
Uponor Wirsbo,
Saint John, New Brunswick

One of the world’s leading manufacturers of plastic pipes recently completed a major expansion to its facility in New Brunswick. Uponor Wirsbo upgraded its production lines in October 2004, in order to increase the capacity of the Saint John plant by 30 percent.

Uponor’s location in Canada’s Maritime region has helped the company to increase its work force from one person in 1999 to 90 people today. “Our experience since starting here has been terrific, and we are very proud to be part of the Saint John community,” says Canadian Sales and Marketing Manager Dave Fletcher. “We believe that New Brunswick has some of the lowest start-up and operating costs for plastics manufacturing in North America.”

Headquartered in Apple Valley, Minnesota—a suburb of Minneapolis and St. Paul—Uponor Wirsbo is a division of Wirsbo in Finland, one of the world’s leading producers of plastic pipe systems for potable water and gas distribution, plumbing and heating, telecommunications, as well as sewage disposal in public infrastructures and the residential home sector. The company, which has 40 production plants in 15 countries, has clients the world over.

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Canadian Sites top for Game Development
Electronic Arts, Montreal, Quebec, and Vancouver, British Columbia

Best known for interactive adventure and action games such as FIFA Soccer and NBA Live, Electronic Arts (EA) inaugurated its northeast game development studio in downtown Montreal in 2004.

Montreal was chosen as the site for EA’s new studio following a lengthy evaluation of several Canadian and U.S. cities. In the end, says EA Worldwide Studio President Don Mattrick, “Montreal offers the best combination of creative talent, technology infrastructure and favourable economics.” Quebec’s highly skilled workforce and university computer science departments in the animation field were also cited as deciding factors.

EA has hired 65 full-time employees and plans to create 500 new jobs over the next five years. “With its universities, robust tech community and melting-pot urban energy, Montreal was a natural choice for Electronic Arts,” says veteran developer Alain Tascan, EA’s Vice President and General Manager in Montreal. “We have received thousands of applications and have hired specialists from Montreal, Western Canada, the United States and Europe.” The level of talent attracted by the studio has enabled EA to work on the development of three new video games during its first year instead of only one as initially planned.

Based in Redwood Shores, California, EA runs its Worldwide Studio headquarters out of Burnaby, British Columbia. There, as well as at a downtown Vancouver facility and now in Montreal, more than 800 developers produce award-winning software for systems such as PlayStation, PlayStation2, Xbox, GameCube and Game Boy Advance.

Tata Infotech Develops Revolutionary XML Application on Bloor Street
Exegenix, Toronto, Ontario

A breakthrough technology supporting the rapidly emerging Internet and information management standard XML (eXtensible Markup Language) is being promoted internationally by Exegenix. The Toronto-based company is a subsidiary of Mumbai-based Tata Infotech Limited, part of the Tata Group, India’s largest and best-known conglomerate.

Exegenix Conversion Solutions ease a serious industry-wide issue by automating the conversion of any printable electronic content into XML format. This eliminates the costly manual re-keying of data and the intensive programming effort required to translate formatted styles into electronic document structures. Exegenix’s award-winning solutions can successfully identify simple and complex structures for a wide variety of business documents, including legal rulings, textbooks, trade publications and software manuals.

From Tata Infotech’s perspective, Toronto is an ideal location for a number of reasons. “Among the city’s major advantages are the availability of highly specialized employees and the affordable costs of doing business,” says Steve Downie, Vice President Sales and Marketing of Exegenix. The company has established two operations, one dedicated to research and development (Exegenix Research Inc.) and another for sales and marketing (Exegenix Canada Inc.), which together employ 22 people, five of whom are from India.

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Canadian Subsidiary a Boon for Pharmaceutical Company Novopharm, Markham, Ontario

In order to keep up with the growing North American demand for its products, Novopharm is expanding its Centre of Excellence for the Production of Penicillin Products in Markham. The $20 million expansion is expected to create more than 100 manufacturing jobs over the next three years at Novopharm, which currently employs some 900 people at three Toronto-area sites.

A subsidiary of Israeli pharmaceutical giant Teva, Novopharm is Canada’s second-largest generic drug company. The company has invested more than $35 million over the last decade to upgrade its manufacturing facility in Stouffville and its packaging and distribution plant in Mississauga, which also houses Novopharm’s corporate headquarters.

“This latest expansion underscores Novopharm’s commitment to meeting the increasing needs of a burgeoning, global pharmaceutical market. Our location has been a major factor in our growth,” says Allan Oberman, Novopharm’s President and CEO. “For example, our proximity to the border, along with the advantages of NAFTA, facilitate access to major U.S. markets. Ontario’s low cost of doing business is also key, as is the region’s highly skilled, international work pool.” Many of Novopharm’s employees have acquired valuable experience in pharmaceutical manufacturing from countries such as India and Israel.

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Fastest-Growing Diamond Region in the World
Tiffany & Co.,
Yellowknife, Northwest Territories

Tiffany & Co. expects that one in four of the diamonds sold in its 140 stores worldwide will soon come from Canada’s Northwest Territories. In 2003, the New York-based luxury gift retailer opened a 1,100-square-metre facility in Yellowknife, under the name Laurelton Diamonds. This facility cuts and polishes diamonds provided by the Diavik and Ekati mines and the three local producers, BHP Billiton, Rio Tinto and Aber Resources. Diavik, located 300 kilometres northeast of Yellowknife at Lac de Gras, is partially owned by Tiffany through its investment in Aber.

Tiffany’s operations in the North are supporting local institutions and creating business and employment opportunities for the surrounding population. The Laurelton facility, which currently employs 40 people, is expected to grow to about 75 once it is fully staffed. Laurelton has also signed agreements with Aboriginal organizations to help test-market Inuit-designed jewellery in North America. “The new facility contributes to our stated objective of providing meaningful economic opportunities to the local community and establishing closer ties to our Canadian partners,” says Tiffany & Co. Chairman Michael J. Kowalski. The high-end jeweller has also donated $25,000 to Operation Looking Glass, a fundraising effort to purchase endoscopic equipment for Yellowknife’s Stanton Territorial Hospital.

Since diamonds were first discovered there more than a decade ago, the Northwest Territories has become the world’s third-largest producer, after Russia and Botswana.

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