Canada's leading position as a business destination being eroded, says the Economist Intelligence Unit

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2007-03-22 10:52

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Hong Kong--(뉴스와이어)--Canada faces challenges in maintaining its status as one of the most business-friendly countries in the world, according to a new Economist Intelligence Unit research paper sponsored by Accenture (NYSE: ACN) entitled Not left behind: How Canada can compete.

According to the research findings released today and presented Thursday at The Economist’s Business Roundtable with the Government of Canada in Ottawa, Canada’s business environment will improve only slightly in the years ahead, providing other countries with the opportunity to catch up. Only two years ago Canada’s business environment was rated the best in the world; now it is in third place, behind Denmark and Singapore (but ahead of the fifth-place US). But Canada’s ranking is unlikely to change much over the next five years, with Canada's competitors expected to undertake only modest reforms.

“Although the Economist Intelligence Unit continues to think highly of Canada's business environment, there are some obvious areas in need of reform. Unfortunately, the issues come down to a large degree to the very nature of Canada's federal system”, said Matthew Sherwood, Senior Economist.

The research report finds that Canada faces challenges in three key areas: political effectiveness (the ability to implement policy), taxation and the labour market.

· Canada slipped to 15th among the 60 countries surveyed in terms of political effectiveness - better only than Japan and Italy among the G7 nations. Many governments, especially in smaller European countries, are expected to become more efficient. Here Canada is hampered by barriers to internal trade between the provinces.

· Companies in Canada face a significant tax burden, shouldering a higher share of government tax revenue than in most other countries. They also pay the highest marginal effective tax rate on capital in the developed world. Hampering reform of the tax system is the complex fiscal relationship between the federal government and the provinces.

· The labour environment is expected to deteriorate over the next five years, owing to short-term shortages of highly educated and skilled labour. Canada also scores less well than other developed countries in terms of labour laws, flexibility and costs.

The report includes interviews with Canadian corporate leaders in which they pinpoint the most pressing problems with regard to political, tax and labour issues. Interviewees include:

· David Blanchard, president and chief executive officer of Unilever Canada
· Duncan Hawthorne, president and chief executive officer of Bruce Power
· Peter Brown, chairman and chief executive officer of Canaccord Capital
· Robert E Brown, president and chief executive officer of CAE
· Lawson Hunter, executive vice-president of BCE
· John Weaver, president and chief executive officer of Abitibi-Consolidated
· Gordon Nixon, president and chief executive officer of RBC
· Paul Douglas, president and chief operating officer of PCL Constructors’ Canadian operations
· Don Drummond, senior vice-president and chief economist if TD Bank Financial Group
· Bill Morris, country managing director for Accenture in Canada

“One of the opportunities for business in Canada is to nurture more competitive markets within our country and to help, promote and applaud the development of high-performing companies with head offices within Canada,” said Bill Morris, Country Managing Director of Accenture in Canada.

Not left behind: How Canada can compete is available free of charge at www.accenture.ca/economistresearch

Notes for editors:

Not left behind: How Canada can compete is an Economist Intelligence Unit white paper, sponsored by Accenture. The research is based on the business environment rankings and forecasts compiled by the Economist Intelligence Unit, as well as in-depth interviews with senior executives from a wide range of large Canadian companies.

About the Economist Intelligence Unit

The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist newspaper. Through our global network of more than 700 analysts and contributors, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilise the right people, skills, and technologies to help clients improve their performance. With approximately 146,000 people in 49 countries, the company generated net revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. Its home page is www.accenture.com.

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