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<p><font size="+1"></font><font size="+1"><strong>2004/7 <u>CHECK AGAINST DELIVERY</u></strong></font></p>
<p align="CENTER"><font size="+1"><strong>NOTES FOR AN ADDRESS BY</strong></font></p>
<p align="CENTER"><font size="+1"><strong>THE HONOURABLE JIM PETERSON,</strong></font></p>
<p align="CENTER"><font size="+1"><strong>MINISTER OF INTERNATIONAL TRADE,</strong></font></p>
<p align="CENTER"><font size="+1"><strong>AT THE LAUNCH OF THE</strong></font></p>
<p align="CENTER"><font size="+1"><strong>2004 EDITION OF THE KPMG <em>COMPETITIVE ALTERNATIVES</em></strong></font></p>
<p align="CENTER"><font size="+1"><strong>INTERNATIONAL BUSINESS COSTS STUDY</strong></font></p>
<p><font size="+1"><strong>TORONTO, Ontario</strong></font></p>
<p><font size="+1"><strong>February 18, 2004</strong></font></p>
<p><font face="Arial">It is a pleasure to be with you in Toronto this morning. And I especially want to thank
the Toronto Stock Exchange (TSX) for hosting us today. </font></p>
<p><font face="Arial">I delivered my first major international address as Canada's Minister of International
Trade last month at a TSX event in Frankfurt, Germany. So I know first-hand the great
job that Barbara Stymiest and her team are doing to sell Canada abroad. And selling
Canada is why we are here today.</font></p>
<p><font face="Arial">We have a clear message for the rest of the world. Canada is in business, and Canada
means business when it comes to promoting itself as the global business partner of
choice. When companies choose to invest here, it means an even stronger Canada
including more jobs, enhanced health and education programs, expanded capacity in
science and technology and better towns and cities.</font></p>
<p><font face="Arial">The 2004 KPMG report, entitled <em>Competitive Alternatives</em>, is a study of international
business costs. It covers all G7 countries plus Australia, Iceland, Luxembourg and the
Netherlands.</font></p>
<p><font face="Arial">It is the fifth such study since 1996. And what a message we have. It is the fifth straight
time we are identified as the lowest-cost country for doing business.</font></p>
<p><font face="Arial">And with an overall cost advantage of 9 percent over the United States, we are the best
place to set up a business to service the world's richest market, North America.</font></p>
<p><font face="Arial">This international cost comparison is based on an exchange rate of 75 Canadian to the
U.S. dollar. And here's the best part: it shows that Canada's cost advantage would hold
true even if our dollar appreciates by 25 percent. We could go to 95 cents before losing
our competitive edge.</font></p>
<p><font face="Arial">One reason we fared so well is corporate taxes. By 2005, Canadian corporate taxes
will, on average, be five percentage points lower than those in the U.S.</font></p>
<p><font face="Arial">Similarly, Canada was singled out by KPMG as having the most generous R&D tax
treatment in the G7. This is just part of the reason why Canada's cost advantage over
the U.S. is highest for industries involved in R&D, industries that are part of the
government's vision for the 21st century. </font></p>
<p><font face="Arial">Canadians from coast to coast, in cities large and small, can celebrate our
across-the-board competitive advantage among 11 countries studied. Every one of the
39 Canadian cities studied is more cost-effective than every one of the 44 U.S. cities
studied.</font></p>
<p><font face="Arial">This latest KPMG study is just one more element in our vast array for selling Canada to
the world as the best place in which to do business. And I am delighted to be here as
one of Canada's chief salespersons. </font></p>
<p><font face="Arial">This study is another valuable tool for all of us who are promoting "Brand Canada," for
myself, for our officials in the Department of Foreign Affairs and International Trade, for
provinces and municipalities, for our academic and business leaders, and for you and
your media colleagues around the world. </font></p>
<p><font face="Arial">We are all taking our message to the world that Canada is open for business and offers
the best access to the North American market. </font></p>
<p><font face="Arial">We are number one.</font></p>
<p><font face="Arial">Thank you.</font></p>
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