2004/7 CHECK AGAINST DELIVERY

NOTES FOR AN ADDRESS BY

THE HONOURABLE JIM PETERSON,

MINISTER OF INTERNATIONAL TRADE,

AT THE LAUNCH OF THE

2004 EDITION OF THE KPMG COMPETITIVE ALTERNATIVES

INTERNATIONAL BUSINESS COSTS STUDY

TORONTO, Ontario

February 18, 2004

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.

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.

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.

The 2004 KPMG report, entitled Competitive Alternatives, is a study of international business costs. It covers all G7 countries plus Australia, Iceland, Luxembourg and the Netherlands.

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.

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.

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.

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.

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.

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.

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.

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.

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.

We are number one.

Thank you.