Think Canada! Why you should commercialize technology with Canadian partners.

1

Think Canada.

Licensing Executives SocietyMinnesota Chapter Meeting

April 2010

Overview� Introduction to Consulate General of Canada

� Canada’s Economic Relationship with Minnesota

� Why do business with Canada?

� Strong Business Environment

� Entrepreneur friendly

� Superb Infrastructure for Knowledge Industries

Consulate General of Canada inMinneapolis

Representing Canada in the Upper Midwest United States

� Consular Services for Travelling Canadians

� Political and Economic Relations, Public Affairs

� Trade and Investment Partnerships

Canada – MinnesotaEconomic Relationship

� In 2008:

� MN exports to Canada. . . . . . $5.8 billion

� MN imports from Canada. . . . $15.4 billion

� Bilateral trade. . . . . . . . . . $21.2 billion

� 141,250 Minnesota jobs are supported by Canada–U.S. trade

Why Canadians do Business inMinnesota

� Next Door Neighbor

� Similar Cultures

� Access to Innovation-Intensive Industries andMarkets

� Medical Devices

� Agri-food Products

� Advanced Manufacturing and Materials

� Gateway to Larger US Market

Why do Business with Canada?

Think Canada……For Strong Business Fundamentals

8

Real GDP Growth and Projections (%)

0.8 0.70.3

0.70.5

-0.5

3.1 3.1

1.91.5

1.0

1.7 1.8

-0.6-1.0

0.0

1.0

2.0

3.0

4.0

Cana

da U.S.

U.K.

Fran

ce Italy

Germ

any

Japa

n

%

2010-11

2006-09

Canada has a Relatively Strong EconomyDespite the Global Slowdown

Consensus Economics� According to Consensus Economics, Canada has been a top performer among

the G7 in GDP growth over the 2006-09 period and is expected to remain sothrough 2010-11.

Source: Consensus Forecasts, March 2010, Consensus Economics Inc.

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Canada also has Superior EmploymentGrowth

� Strong economic growth and rising demand for Canadian commodities over the lastdecade, combined with provincial and federal policies to improve the flexibility andadaptability to the changing workplace, have helped generate healthy gains inemployment.

Employment Growth (%)1998-2008

0.6

1.0

1.0

1.2

1.4

2.0

-0.2

-1 0 1 2 3

Japan

Germany

U.K.

U.S.

Italy

France

Canada

Source: U.S. Bureau of Labour Statistics, OECD Economic Outlook, No.86, November 2009

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Sound Fiscal Advantage� Canada has enjoyed eleven consecutive annual federal budget surpluses ending in

2007-08; it has undertaken one of the largest stimulus packages among developedeconomies in the current global economic downturn.

� In Budget 2010, Canada has chosen to run short deficits to stimulate its economywithout putting long-term prosperity at risk and is expected to return to balancedbudgets in the medium term.

� Over the coming years, Canada’s net debt-to-GDP ratio will remain the lowest in theG7 by a wide margin with a return to a surplus predicted shortly following the 2014-15 fiscal year.

* Forecasts for both countriesSource Canada: The Federal Budget, Finance Canada, March 4, 2010Source United States: United States Congressional Budget Office, March 5, 2010.

Federal Government Budgetary Balance(% of GDP)

-0.4

-3.5 -3.1

-1.6-1.0 -0.5 -0.1

-10.9

-8.4

-5.5-4.6 -4.2 -4.3 -4.2

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2008

-09

2009

-10*

2010

-11*

2011

-12*

2012

-13*

2013

-14*

2014

-15*

Canada U.S.

11

� Canada was the only G7 country to post a surplus in 2008. Despite being inan overall deficit position during the 2009-2011 period, Canada will be in afar better position than most G7 member countries.

Source: OECD Economic Outlook, No.86, November 2009

Total Government Budget Balance 2008-11(% of GDP)

(National Accounts Basis)

0.1

-2.7

-5.3

0.0

-3.4

-6.5

-2.7

-4.8 -5.3

-12.8

-4.4

-8.3

-10.4

-8.3

-14.0

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

Cana

da Italy

U.K.

Germ

any

Fran

ce U.S.

Japa

n

2008

2009-11

Leading Most Other G-7 Countries

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Canada has Sound Financial Institutions.

� With the world in the midst of the current financial crisis, investors can take comfortin the fact that Canada has the soundest banking system in the G7.

� Five of the 50 safest banks are in Canada, according to a recent study: Royal Bank ofCanada (10th), Toronto Dominion Bank (14th), Scotiabank (22nd), Bank of Montreal(31st) and CIBC (37th).**

Soundness of Banks* World Rank

10th9th

8th7th

6th5th

4th3rd

2nd1st

Canada

NewZeal

andAust

ralia

ChileHong KongSout

h Africa

Namibia

Singapo

rePana

ma

Brazil

Rank

*Standing among 133 countries. Ranking based on the degree of soundness of financial institutions. Source: Global Competitiveness Report, 2009-2010** Standing among 500 world banks based on total assets and long-term credit ratings. Source: Global Finance Magazine , October 2009

Think Canada……as Friendly to Entrepreneurs

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Canada also has Low Business Costs.� For the seventh consecutive time, KPMG’s Competitive Alternatives study finds Canada

leads the G7 with the lowest business costs.

� Canada is the lowest-cost G7 country in 11 of the 17 industries analyzed by KPMG’sCompetitive Alternatives 2008 report: aerospace, agri-food, chemicals, medicaldevices, pharmaceuticals, precision manufacturing, telecommunications,biotechnology, product testing, software design and Web and multimedia.

Source: KPMG Competitive Alternatives 2008

Percentage Cost Advantage (Disadvantage) Relative tothe United States

0.6 0.0

-3.6

-7.1-7.9

-14.3

-16.8-18

-16

-14

-12

-10

-8

-6

-4

-2

0

2

Cana

da U.S.

Fran

ce U.K.

Italy

Japa

n

Germ

any

15

Source: The Federal Budget, Finance Canada, March 4, 2010 and the OECD Tax Database.* METR takes into account federal and provincial statutory corporate income tax rates, deductions and credits available in the corporate taxsystem and other taxes paid by corporations, including provincial capital taxes and retail sales taxes on business inputs.

Overall Tax Advantage for Firms to Expand

International Comparison of Statutory General Corporate TaxRates in 2012

39.5 39.1

34.4

30.228.0 27.5

25.0

10

15

20

25

30

35

40

45

Japan U.S. France Germany U.K. Italy Canada

%� As a result of corporate income tax reductions introduced by the Government since

2006, Canada will have the lowest statutory corporate tax rate in the G7 by 2012.

� Canada is on track to having the lowest overall tax rate on new business investment(marginal effective tax rate (METR*)) in the G7 in 2010.

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Relatively Few Steps in Establishinga Business…

� Regulations pertaining to the creation of new businesses are considerably more flexiblein Canada than those in the rest of the G7.

� Canada ranks first among the G7 and OECD countries for the lowest number ofprocedures required to establish a new business.

Number of Procedures*

1

56

89

5.7 66

0123456789

10

Canada France OECDAverage

U.S. Italy U.K. Japan Germany

Source: Doing Business in 2010 - The World Bank Group, 2009 * A "procedure" is defined as any interaction of the company founderwith external parties (government agencies, lawyers, auditors, notaries, etc). Interactions between company founders or companyofficers and employees are not considered as separate procedures. For example, an inauguration meeting where shareholders electthe directors and secretary of the company is not considered a procedure, as there are no outside parties involved.

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…and Relatively Less Time

� Canada ranks first among the G7 for the fewest number of days required forestablishing a new business.

Duration (days)

56 7

10

13 13

18

23

0

5

10

15

20

25

Canada U.S. France Italy U.K. OECDAverage

Germany Japan

Source: Doing Business in 2010- The World Bank Group, 2009

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Highest Concentration of Entrepreneurs� From a global standpoint, Canada has the highest concentration of entrepreneurs

within its working population.

� Businesses, including start-ups, develop new products and services and get them tomarket and conceive new types of organization and production and put them intopractice.

� New companies also serve to remind existing firms of the need to adapt and continueinnovating.

Source: Statistics Netherlands 2008

Number of Entrepreneurs as a Percentage of theWorking Population

15.9

11.5 11.2 11.1 11.110.1 9.7

8.6 8.56.9

0

5

10

15

20

CanadaNeth

erlands U.K.

Ireland

Belgium U.S.

Germany

Finland

Sweden

Denmark

Relative Generosity ofR&D Tax Incentives*(Index: Canada = 100.0)

76.1

77.0

80.6

84.0

85.9

100.0

123.9

50 60 70 80 90 100 110 120 130

Germany

Italy

U.S.

U.K.

Japan

Canada

France

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Quality R&D Incentives

� Canada offers one of the mostfavorable tax treatments for R&Damong the G7.

� Canada provides a system oftax credits and accelerated taxdeductions for a wide-varietyof R&D expenditures.

� 30% refundable SR&ED taxcredit for small companies

� Eligible costs include: salaries,overhead, capital equipment,and materials.

� These tax-based incentives permitfirms to significantly reduce R&Dcosts through direct investment orsub-contracting in Canada.

Source: Warda, Jacek, Rating Measuring Canada's R&D Tax Incentives: May 22, 2009Note: Relative generosity is determined by dividing the after tax cost of performing $1.00 of R&D by 1 less the corporate tax rate.Results are indexed to the relative generosity of Canada's system of tax-based support for R&D. The higher the ratio the more competitive the tax system.* Calculations based on large firms

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Canada has one of the World’sBest-Educated Workforces…

� The overall skill level of Canada’s workforce ranks high among competingcountries.

� Canada has the highest percentage of individuals achieving at least college oruniversity education, among OECD member countries.

Higher Education Achievement Among All Countries

56.755.0 54.0 53.0

51.2 50.0

44.042.0 42.0 42.0 41.0 41.0 40.5

30

35

40

45

50

55

60

Singapor

eCanada Jap

anSout

h Korea

Taiwan

Israel

NewZea

land

Belgium

Ireland

Norway

Denmark

France

HongKong

%

Source: IMD, World Competitiveness Yearbook 2009

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Readily Available Qualified Engineers

� Canada leads the G7 in terms of the availability of qualified engineers in itslabour market.

Source: IMD, * Rank among 57 economies considered in the World Competitiveness Yearbook 2009.

Qualified Engineers Availability Index*

7.13 7.01

6.556.37

6.165.85

5.30

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

Canada France Japan U.S. Germany Italy U.K.

Inde

x

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� According to a recent annual quality-of-life ranking of 215 world cities, fourCanadian cities ranked among the top 25.

Source: Mercer Human Resources Consulting: April 2009

Overall Quality of Life Ranking (Top 25 Cities)(Index: New York City = 100.0 )

108.6

108.0

107.9

107.4

107.4

107.2

107.0

106.8

106.5

106.3

106.2

105.9

105.7

105.4

105.3

105.0

105.0

104.8

104.6

104.5

104.3

104.2

104.1

103.7

103.6

98

102

106

110

Vienna

Zurich

Geneva

Vancou

ver

Aucklan

dDus

seldo

rfMun

ichFra

nkfurt Bern

Sydney

Copen

hage

nWelli

ngton

Amsterda

mBrus

sels

Toron

toOtta

waBerl

inMelb

ourne

Luxem

bourg

Stockho

lmPert

hMon

treal

Nurembu

rgOsloDub

lin

Exceptional Quality of Life in Cities.

Think Canada…… for Applied Research and Development

Position of Canada in Scientific ResearchPublications, 1997-2004

“The State of Science & Technology in Canada”, Council of Canadian Academies, September 2006

Technology Clusters in Canada

New Models for Sharing ResearchInfrastructure, Building Research Capacity

National Institute forNanotechnology

� Example of federal lab co-located on university Campus� $120M joint venture between NRC, Government of Alberta & University of Alberta.� Opened June 2006� Shared facilities, staff jointly or cross appointed between NRC and the university� Multi-disciplinary institute: physics, chemistry, engineering, biology, informatics,

pharmacy and medicine� Incubation facilities for start-ups will act as a catalyst for a nanotech cluster in

Edmonton, accelerate commercialization of new technologies and the growth of hightech firms

New Models to Foster Innovation &Commercialization: The MaRS Centre

The MaRS Centre is a convergence facility located in the heartof Toronto’s Discovery District, Canada’s largest biomedicalresearch cluster.

� Phase I of the MaRS Centre (78K m2 in 3 buildings) is home to over 65organizations: leading researchers, technology transfer groups, SMEs,multinationals, service providers, venture capitalists and networkingorganizations.

� Private sector tenants outnumber public sector tenants 3:1.

� The MaRS Incubator (4K m2) houses 27 promising emerging life sciences,engineering and information technology companies.

� The MaRS Collaboration Centre is a conference venue.

� The MaRS Venture Group provides hands-on support to companies.

� Phase II space will be doubled

The MaRS Centre101 College Street, Toronto

Phase I

Phase II

MaRS Discovery District

Source: MaRS Discovery District

Thank YouQuestions?

Michael Willmott

Consulate General of Canada, Minneapolis

[email protected]

612-492-2904

www.Minneapolis.gc.ca

www.InvestinCanada.com