The Top Choice for Global Business
From its dynamic startup scene to its well-established industries, Canada stands out as a heavyweight in the global business arena.
Canada’s business ecosystem ranks among the most versatile and thriving in the world. The country has emerged as a premier investment destination for global companies, trailing only the US in foreign direct investment (FDI), according to many international rankings.
The right geography, the right economy
Canada boasts a resilient and diversified economy that has weathered numerous global economic downturns. With a robust banking system, controlled inflation, and prudent fiscal management, the environment is conducive to business investment. Consistent GDP growth, a transparent regulatory framework, and some of the most competitive tax advantages globally inspire confidence among investors, positioning Canada as a safe haven amidst global uncertainties.
“Canadians are among the most fortunate people in the world, given our abundant natural resources, the diversity of our population, and the strength of our democracy,” says Perrin Beatty, President and CEO of the Canadian Chamber of Commerce.
“We are one of the very few countries in the world where the public sees immigration as a net benefit.”
Situated between the economic powerhouses of the US and Asia, Canada enjoys a strategic geographical location that facilitates trade and investment opportunities. With access to markets under the USMCA (United States-Mexico-Canada Agreement) and CETA (Comprehensive Economic and Trade Agreement), Canadian businesses benefit from preferential trade agreements that enhance their competitiveness on the global stage.
A culture of innovation
Canada’s reputation as a leader in innovation is well-deserved. The country ranks 15th among 132 economies on the Global Innovation Index 2023 and 16th out of 177 countries on the 2023 Index of Economic Freedom. Home to world-class research institutions, Canada fosters a culture of creativity and collaboration. The country invests significantly in research and development, particularly in key sectors like technology, biotechnology, artificial intelligence, and clean energy. Government initiatives such as the Strategic Innovation Fund and the Scientific Research and Experimental Development Tax Incentive Program incentivize innovation and provide crucial support to businesses at every stage of development.
One of Canada’s most significant assets is its highly skilled and diverse workforce. Its robust education system produces a steady stream of talent equipped with the skills to drive innovation. “Canada is one of the most attractive locations in the world for international students. This is a great advantage because many international students choose to stay,” Beatty underlines. Canada’s immigration policies also attract skilled professionals from around the world. “Among the G7 countries, Canada has the highest per capita immigration rate,” Beatty explains. The Chamber’s CEO also underscores the importance of diversity. “Multiculturalism thrives in Canada. We are one of the very few countries in the world where the public sees immigration as a net benefit.”
Fostering green innovation
Building on its rich natural resources, Canada is focusing on green innovation in emerging clean energy sectors, including battery technologies, carbon capture, and clean hydrogen. The country has secured historic manufacturing deals for electric vehicles, batteries, and hybrids, including a deal with General Motors, which is investing over $2 billion in launching Canada’s first full-scale commercial electric vehicle production facility. “We remain committed to building a Canada that is more modern, diverse, and hopefully more prosperous,” Beatty concludes, underlining the country’s efforts towards a low-carbon future.
Spearheading Canada’s growth are the provinces of Alberta and Québec, renowned for their resilient and diversified economies.
Foreign investment surge in Québec
“To triple FDI from $2 to $6 billion is a quite an accomplishment, and the figures are expected to rise even further next year.”
With its diversified economy and abundant natural resources, Québec is a magnet for foreign investment.
Québec’s economy has undergone significant diversification in recent years, expanding beyond its traditional domains of natural resources and manufacturing. The province has made notable strides in sectors such as aerospace, information technology, biotechnology, and clean energy. As a testament to this evolution, foreign direct investment (FDI) in Québec soared to a record $6 billion in 2022-23, marking a 30% surge from the previous year and nearly tripling the figures from 2018-19. “To triple FDI from $2 to $6 billion is a quite an accomplishment, and the figures are expected to rise even further next year,” Hubert Bolduc, President of Investissement Québec International says.
“Our aim was to establish Investissement Québec as the primary driver of economic development in the region.”
“Our aim was to establish Investissement Québec as the primary driver of economic development in the region,” remarks Pierre Fitzgibbon, Minister of Economy, Innovation, and Energy. While attracting FDI remains crucial, he underscores the importance of leveraging the province’s core strengths. “We aspire to excel in specific sectors,” he asserts.
With its unwavering commitment to innovation and a rich resource base and supportive ecosystem, Québec is poised for continued growth, prosperity, and leadership in the years to come.
Agility and acumen boost business in Alberta
“Our province boasts the most investment-friendly environment in Canada.”
As Alberta strategically adapts to the shifting global economic landscape, the convergence of resource wealth and proactive governance makes for an enticing prospect for international stakeholders seeking long-term viability and resilience.
When chemical giant Dow sought the best location for a first-of-its kind net zero petrochemicals facility, Canadian province Alberta won the race through a remarkable instance of agility. Following a meeting with Dow’s leadership, Alberta was given six months to enact the regulatory changes to secure the contract. They succeeded in less than a week.
Premier Danielle Smith emphasizes the significance of this achievement. “This project is one of the largest private sector investments in our history.” The Premier is excited to share Alberta’s incredible story. “Our province boasts the most investment-friendly environment in Canada, a competitive tax system, a highly educated workforce, an abundance of energy products such as hydrogen and ammonia, a world-class education system and a robust research and development pipeline.”
“Our secret sauce is that we make things happen and enable companies to move things through.”
Rick Christiaanse, CEO of Invest Alberta, also underscores the province’s distinctive competitive edge. “Alberta has all the ingredients investors are looking for: competitive cost, skilled labor, smart regulations, and space to grow. But our secret sauce is that we make things happen and enable companies to move things through,” he adds, pointing out that Invest Alberta is dedicated to showcasing the province as a stable base for global investors.
Alberta’s economic evolution will enable us to stay on top of our progress and remain Canada’s economic engine,” the Premier Smith concludes.
Download the PDF
The Foreign Policy editorial team had no role in the creation of this content.