Other Countries are Making Business-friendly Reforms and Some Have Caught Up With Canada During the Last Few Years Research Paper Provides Key Insights from Top Canadian Business Leaders OTTAWA, March 21, 2007 - 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) titled Not left behind: How Canada can compete. According to the research findings, which will be presented at The Economist’s Business Roundtable with the Government of Canada in Ottawa, the nation’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 United States). Canada’s ranking is unlikely to change much over the next five years, according to the research, as competing countries are 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. Noteworthy is the finding that Canada is hampered by barriers to internal trade between the provinces. At the same time, other national governments, especially in smaller European countries, are expected to become more efficient.
- 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, ountry 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,” Accenture’s Morris said. The report 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. 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 mobilize 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. Media contacts: Joanne McKenna
Economist Intelligence Unit
+44 (0)20 7576 8188
joannemckenna@eiu.com Sarah Thompson
Accenture
(416) 641 4416
sarah.thompson@accenture.com Questions about Canada Business Roundtable
Rachel Golden
Economist Conferences
212-698-9730
RachelGolden@economist.com To Top |