Overview - Information and Communications Technologies

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Investment in Canadian ICT: The Very Best Place To Be

The Economist's Economist Intelligence Unit (EIU) has predicted that Canada will be the best country in the world in which to do business between 2004 and 2008. The best investment sector in the world's best place to do business is Canada's exciting and dynamic information and communications technologies (ICTs) sector, and it is well worth a look.

Surprised? You shouldn't be. In field after field — multimedia, wireless technology, security, gaming, software design and more — world-leading Canadian ICT innovation is providing solutions for the future, available right now.

The key question for investors in the 21st century, however, is not what is new, but what will be new. The next great breakthrough might be in biocomputing, photonics, wireless technology, nanotechnology, artificial intelligence or some field as yet totally undiscovered. Whatever the field, Canadian ICT will continue providing the technology platform for a world of still-undreamed-of wonders.

The Blackberry® wireless solution revolutionized the ICT world with a Canadian product. What's next? It's up to your imagination.

When It Comes to ICT Investment, Canadians Make Great Partners

Partnership is why some of the world's most important multinational enterprises are not just recognizing Canada's ICT expertise, but actually investing in it. Companies like IBM, Alcatel, Ericsson, Siebel Systems, Electronic Arts, Ubisoft, SAP, Motorola, Harris Corporation, Lucent Technologies, Nokia, Sierra Wireless and many more have all either set up major operations in Canada or are working closely with Canadian partners.

Canada offers many types of investment opportunities for success, including direct investment, partnerships, strategic alliances and joint ventures, subcontracting, and research and development (R&D) collaborations. And the word is out:

• Foreign investment in the Canadian ICT sector in 2003 was $24.1 billion, up 5.1 percent from 2002.
• Foreign direct investment in the Canadian ICT sector has more than quadrupled since 1990.

A Strong Foundation for Continued Information and Communication Technologies Success

Canada's ICT advantage is based on many factors, including:

• A competitive economy with excellent fundamentals. Canada was the first G-7 nation to pull itself out of deficit and into surplus, expecting balanced or surplus budgets for the future. Canada led G-7 countries in growth from 1999 to 2002, and the Organisation for Economic Co-operation and Development (OECD) is forecasting that Canada will continue to be a growth leader.
• Easy access to global and North American markets. Canadian companies are assured access to the huge North American market through the North American Free Trade Agreement. Canada and the United States have the world's largest trading partnership, with two-way trade amounting to $645 billion in 2003 — for an average of more than $1.2 million a minute in trade. The Canadian province of Ontario alone does more business with the U.S. than does Japan.
• A superior work force. Canadian workers are unrivalled in knowledge, education and skill levels, and our labour-turnover rates are low. Among OECD countries, Canada has the highest percentage of individuals with college or university education, and about 38 percent of Canadian ICT workers have university degrees.
• A first-class ICT infrastructure. Canada has superb network and grid facilities, a commitment to Internet and broadband access, and great R&D collaboration with top Canadian universities.
• ICT clusters that have multiplied in number, nationwide. Dynamic and synergistic, these clusters provide many options for innovative alliances and are a major force behind Canada's growing ICT strength.
• Canada's quality of life. With our spectacular environment and vast array of cultural amenities, Canada's quality of life is unrivalled. Canada tops the G-7 as the safest place to live, and as the best country in which to conduct business, with a fairly administered judicial system.

A Cost-Competitive Business Environment — Don't Take Our Word For It

KPMG's 2004 "The CEO's Guide to International Business Costs" study determined Canada to be the most competitive location to establish a business of the 11 countries studied (G-7 countries plus Australia, Iceland, Luxembourg and the Netherlands). According to the study, Canada's overall after-tax cost advantage over the U.S. was 9 percent.

"Ontario offers a positive business environment for high-tech companies, with exceptional research and educational institutions and a very attractive quality of life."
Mike Lazaridis
President and Co-Chief Executive Officer
Research In Motion

Canada's cost advantages over the U.S. in the ICT sector include:

• R&D: 24.7 percent
• Software: 13.1 percent
• Corporate services: 11.7 percent
• Electronics assembly: 6.8 percent
• Telecommunications equipment: 4.3 percent

Canada's strengths lie in its services, and its cost advantages are due to its lower labour costs for scientific and technical personnel and its tax treatment of R&D expenditures.

Home to World-Class Research and Development

Canada is committed to ICT R&D. In fact, the Canadian ICT sector as a whole accounts for 5.5 percent of our GDP, yet its R&D represents a very impressive 43 percent of total business R&D output. Canada's links to North American and global telecommunications grids let R&D be carried out across the country, so that an investor setting up a single R&D lab can access a sophisticated 6000-km research network.

Research consortia and centres of excellence have been widely established across the country to encourage collaboration, and many options for clustering and innovative alliances exist in Canada's R&D community, underpinned by many federal and provincial organizations, programs and academic institutions. Canada offers low R&D costs and the most favourable R&D tax treatment of any G-7 country. Our universities produce more than 25 000 graduates a year in mathematics, engineering, and pure and applied sciences.

That's just the tip of the iceberg. There are many facets of Canadian R&D excellence. Your company could:

• Establish or acquire a core R&D lab in Canada
• Partner with a Canadian company for R&D services
• Connect with a Canadian university, or participate in one of our centres of excellence
• Use CA*net 4 as a test bed for next-generation R&D
• Contract with the NRC, or other national or provincial organizations to carry out your R&D

"Canada's large pool of intellectual resources, coupled with an advanced IT and telecom infrastructure, and its ability to serve as a gateway to North America, Europe and Asia, make it an ideal geography to invest in."
Arup Gupta
President
Tata Consultancy Services, Mumbai, India

Find Out More About Exciting Canadian Information and Communications Technologies Investment Opportunities

There's no doubt about it: Canada is a great place to do business, and now is the ideal time to invest in Canada — for more reasons than ever before.

Discover what all the excitement's about. Detailed information is easily available, so you can decide for yourself if the Canadian ICT advantage is right for your company. For ICT trade and investment information, simply visit the following Web sites:

• www.investincanada.gc.ca
• www.strategis.gc.ca/ictclusters
• www.strategis.gc.ca/infotech

Cat No.: Iu70-4/12-2004E-HTML
ISBN: 0-662-38311-7
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