MR. EGGLETON - ADDRESS ON THE OCCASION OF THECANADA-SWISS ASSOCIATION LUNCHEON - ZURICH, SWITZERLAND
97/5 CHECK AGAINST DELIVERY
NOTES FOR AN ADDRESS BY
THE HONOURABLE ART EGGLETON,
MINISTER FOR INTERNATIONAL TRADE,
ON THE OCCASION OF THE
CANADA-SWISS ASSOCIATION LUNCHEON
ZURICH, Switzerland
January 30, 1997
This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca
It is a real pleasure to be with you today in beautiful Zurich.
The Canada-Swiss Association has a key role to play in promoting understanding
between Canada and Switzerland, which in turn will lead to a greater awareness of
business opportunities in our two countries.
Switzerland and Canada have much in common. Politically, our countries are
federal states where the rights of minorities are respected and political
differences are resolved peacefully, through democratic institutions.
Both of our countries are known for their political stability and high standard of
living. In a world marred by conflict, our countries offer an inspirational model
of peace and security gained through tolerance and mutual respect.
Visits between elected officials are frequent and friendly. Our countries have
closely consulted on environmental and security issues as well as trade and
humanitarian matters.
Our friendship is also reinforced by tourism. Canada is the third most important
long-haul destination for Swiss tourists, behind the United States and Thailand.
Well over 100 000 Swiss tourists visited Canada in 1996, attracted by the
favourable exchange rate, the beauty of our natural scenery and ease with the
language. This is a very impressive number, considering the population of your
country. I like to think these pleasure trips resulted in new friends and added
to the good will our people already share.
In 1995, two-way trade between Canada and Switzerland was almost $1.5 billion,
with Canadian exports to Switzerland reaching $533 million. We imported about
$902 million from Switzerland in 1995, a considerable increase from the 1994 level
of $764 million.
Switzerland is the fifth largest direct investor in Canada among European
countries and is seventh largest worldwide. According to Statistics Canada, these
investments total some $3.2 billion, an increase of $800 million over the past
five years.
As impressive as these numbers may seem, the reality is that there is still a vast
amount of untapped potential.
The simple truth is that Canada remains a largely undiscovered market for
Switzerland.
The task for you and for me is to change that. We've got a great product to sell
-- Canada -- and the time has come to aggressively market that product here in
Switzerland.
We know from experience that when Swiss business people are persuaded to consider
Canada's advantages, they are impressed.
Companies such as Nestlé, headquartered in Toronto, ABA Inc. in St. Laurent, St.
Lawrence Cement in Mount Royal, Cia-Gag in Mississauga and Sandwell Inc. in
Vancouver have joined companies from other nations in choosing Canada as a good
place in which to invest.
Also significant is the role played by the main financial institutions, including
the three leading Swiss banks, which rank fourth in Canada in terms of assets
after institutions from the United States, the United Kingdom and France.
What took all of those companies to Canada? Why, when they could have located
anywhere in the world, did they choose Canada? There are numerous factors, but
let me focus briefly today on five key reasons why Swiss businesses should
consider investing in Canada.
Number one, Canada offers access to the world's richest market. By investing in
Canada, international businesses gain tariff-free access to the United States
under the terms of the Canada-U.S. Free Trade Agreement. Companies also gain
access to the large and growing Mexican market through the North American Free
Trade Agreement [NAFTA]. This represents unequalled access to a market of
360 million people with a total economy larger than that of the European
Community.
The great majority of Canadian industry is located a just-in-time drive from the
major U.S. manufacturers.
And because Canada is a land of immigrants, we are able to offer pools of
experienced workers often fluent in other languages and knowledgeable of
international cultures and business practices, who can provide an easy transition
from Europe to North America.
The second reason to set up shop in Canada is our competitive wage rates and our
educated work force.
Firms in Canada enjoy the benefits of a skilled, cost-effective labour force that
has proven itself adaptable to changing times and changing technologies.
Productivity is high and rising. Over the last two years, productivity in
manufacturing has been the fastest growing among the G-7 nations. In the
automotive assembly industry, Canadian productivity levels are 5 per cent higher
than those in the United States.
Canadian wage rates are also very competitive with those of other countries, and
current trends (such as wage settlements, labour attitudes to such issues as
flexible working hours, and so on) are making them even more so.
Other costs associated with labour, such as employer-paid social security taxes
and health care, are lower for Canadian firms than for our U.S. competitors. In
fact, Chrysler Corporation has calculated that U.S. health insurance bills give
production in Canada an advantage of more than $500 per car. I am told that total
Canadian wage costs average less than half of German wage costs.
Canada's is also a well-educated work force. According to Organization for
Economic Co-operation and Development figures, we are one of the top four
countries in the world in terms of the percentage of gross domestic product [GDP]
that is spent on education. And a number of very successful job training programs
are in place that help to achieve a match between the needs of industry and the
supply of skills.
As noted in a recent U.S. survey, 9 of the top 20 electrical engineering schools
in North America are located in Canada. And the university of choice for
Microsoft recruiters is the University of Waterloo in Ontario.
Third, Canada boasts strong research capabilities. Indeed, international
businesses are increasingly using Canada as a base for research and development
[R&D]. Canadian universities, technical colleges and scientific research
organizations provide a unique pool of talent that is contributing to innovative
product development and design.
Canadian companies also benefit from the most generous R&D tax incentives in the
G-7. These companies have access to "centres of excellence" established within
universities and to university-business consortia in areas such as robotics,
computer-aided design and pharmaceutical development.
At the moment, Canada is home to research and product development facilities for
international companies such as IBM, Digital Equipment, Glaxo and Amdahl.
The fourth reason I would suggest Swiss firms should consider Canada is our
abundance of raw materials and our vast energy supplies.
Canada is renowned for its rich mineral reserves and productive agricultural land.
These resources and the cost effectiveness of their extraction enable Canada to be
a leading exporter of key commodities around the world.
Canada is also one of only two G-7 countries to be self-sufficient in oil supplies
and is the only G-7 country that is a net exporter of natural gas. And prices for
this gas and for electricity are very competitive.
Fifth, Canada enjoys a modern and efficient infrastructure. A 1993 report by the
World Economic Forum ranked countries on several competitiveness criteria. Four
of these dealt with roads, railroads, air transport and ports. Canada's average
rating for these criteria was the highest amongst all G-7 nations.
But we know that infrastructure must constantly be updated. That is why Canadian
telecommunications suppliers have been investing heavily to provide the latest
fibre optic technology and high-speed data transmission services. The Canadian
government recently invested $6 billion in a national infrastructure program in
order to maintain Canada's competitive advantage in this area. This was a cost-shared program, with the three levels of government -- municipal, provincial and
federal -- each contributing $2 billion.
Finally, and very important, is Canada's economic climate. We expect 1997 to
bring another year of high economic growth, combined with low inflation and
interest rates. This economic recovery has been led by two developments -- a
reduction in government spending and an increase in exports. Our government has
surpassed its own goals for deficit reduction. When we assumed office in October
1993, the federal deficit was 6 per cent of GDP. Today it is 2 per cent, and we
are on track for achieving our goal of a balanced budget.
All of these advantages make Canada a wonderful place to do business.
Moreover, we have been working hard to minimize government intervention and
stimulate private sector activities by, for example, privatizing many government
enterprises.
Now, I know that there are a lot of Canadians in the audience who want me to talk
about the quality of life in Canada. But it would be immodest to use this forum
to remind people that the United Nations Human Development Report listed Canada as
the number one country in the world in terms of overall quality of life. And a
recent KPMG study reported that for every industry, the cost of doing business is
cheaper in Canada than in the United States.
It would be inappropriate to talk about our clean, safe cities, with crime rates
less than half of those of our neighbours to the south.
And it would be just plain unfair to mention that we are the second largest
country, in land mass, in the world, with the lowest population density of all
industrialized nations. Or that our national parks alone encompass an area larger
than Italy or Japan.
Nor would I presume to talk to this audience about the sheer beauty of our
landscape -- of our rugged mountains, freshwater lakes, scenic coastal areas,
unique Arctic vistas or vast, unspoiled forests. It just wouldn't be right to
note that many Canadian executives own second homes in picturesque lake and
mountain areas, just an hour or so outside our major cities.
No, it would be wrong to mention any of those things, so I will leave them unsaid.
After all, 100 000 Swiss tourists can't be wrong.
Of course, you would expect me to be biased toward my own country. So the best
thing to do is encourage Swiss business people to talk with the managers of
multinationals that are operating in North America. They'll tell them that their
Canadian operations "put up the best numbers."
What you might want to add is that the Canadian economy is entering a new growth
period, fuelled by strong exports, low inflation and increasing productivity.
If the case is made, by Canadians and by others, I have a feeling that Canada will
no longer remain overlooked by our Swiss friends. And the true potential of
Swiss-Canadian trade will at last be realized.
Thank you.