Canada:

An Attractive and Safe Investment Haven

Powering the Global Economy for Profit & Public Good

Remarks by Honourable Sergio Marchi Special Advisor, Pace Global Advantage China Overseas Investment Summit Hong Kong November 15-16, 2011

Introduction It is good to be back in Hong Kong, and a very special pleasure for me, as a Special Advisor to PGA, to take part in this China Investment Summit, as part of celebrating Chinas tenth anniversary as a member of the WTO. I wish to thank the organizers for their invitation, particularly my good friend and former colleague, Ambassador Sun, who is now the Chairman of the Chinese Society for WTO Studies in Beijing. He was a special colleague for me, and ten years ago, China could not have selected a more appropriate, more gifted trade diplomat to be their very first WTO Ambassador. During his ten years at the helm in Geneva, he was pivitol in moving Chinas agenda forward ---- as well as that of the WTOs. As part of this anniversary, it is clear that China is doing more than reminiscing on its first years of WTO activity. Indeed, it is taking this moment to reflect on lessons learned, experience gained, and how this can all be translated into guiding future actions and strategies. This Summit, is very much reflective of that mindset.
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With the historic economic reforms ushered in during the late 70s, thanks to Deng Xiaoping, China invited the world to participate and partner in Chinas economic development and progress. And the results have been extraordinary. Boats, in all harbours, are rising. Not all at the same rate, to be sure. But the trend is clear. And now, more than ever before, Chinese and Asian citizens alike, are concerned about sustaining this success; about how to ensure that their kids enjoy a better quality of life. More recently, China has engaged more aggressively on how it can partner with the family of nations to shape a better, more prosperous, and more sustainable globe. Thus, in this context, Ambassador Sun, asked me to share my thoughts on what this means for Chinese investment to, and partnership with, Canada. Accordingly, in the brief time that is allotted to me, let me make four central points.

1. First, I need to say that Chinese investment to Canada is most welcome.

As my countrys former Trade Minister and WTO Ambassador, and as a former President of the Canada China Business Community, I can say first hand that economic partnerships with Chinese firms are not only well received, but they are a priority. The Canadian-Chinese relationship has deep roots. Canada was of the first countries to recognize China diplomatically. Last year, we celebrated our 40th anniversary of our formal ties. Canadian companies have finally diversified their trade and investment strategies beyond our traditional dependence on the giant US market, and they indeed have their sights squarely set on China, and the broader Asian community. Quite quickly, China has become our second largest trading partner and in the last five years, Canadas exports to China have been growing at double digits. As well, Canada is an open, tolerant, and multicultural society, where the Chinese-Canadian community plays an increasingly
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strong role, socially and economically. The size of this community makes it the second largest population of Chinese people outside Asia, with numbers hovering at the 1.5 million mark. Therefore, socially and economically, Canada provides an excellent platform that could sustain and nurture a greater China Canadian economic partnership.

2. Despite the recent global uncertainties, Canadas economy has undergone a rennecaisnce.

Chinese citizens are familiar with many of Canadas characteristics; a multicultural society a stable country, socially and politically. a country that is consistently ranked by the UN as having one of the highest standards of life anywhere on the planet a land of cities and towns that are secure and peaceful.
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 a country proudly known for its publicly funded health insurance system a vast territory and environment that is inspiring in its beauty

Our forefathers have built a decent country, with sound values. However, I would like to say that this is only part of the Canadian story. The more recent chapters are about our own economic rennaicance, and these pages may be less recognized in this part of the world. So, allow be to briefly elaborate. i) Fiscal Order Rather quietly --- which is often our style --Canadas economy has become one of the worlds most advanced and dynamic. It stands today as the worlds ninth largest, at US$1.57 trillion bigger than that of Russia, India or South Korea.

 Canadas economy grew faster than every other G-7 country over the last 10 years. Canadas economy came through the global economic recession in better shape than all other industrialized countries. The World Economic Forum reported that Canadas banking system is the worlds soundest not a single Canadian bank required a bailout during the global financial crisis. In fact, for the second consecutive year, six of North Americas 10 safest banks are Canadian.The World Bank has stated that Canada occupies first place in the G-7 and in the OECD, for the lowest number of procedures required to establish a new business. In terms of investor protection regulations, we again rank first in the G-7. When it comes to federal corporate taxes, the trajectory is coming down. The rate was cut to 16.5 percent in January of this year, and will be cut again to
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15 percent in 2012, bringing combined provincial and federal corporate income taxes on new business investment to 26 percent, more than 13 percentage points below U.S. rates, and one of the most competitive in the G-7. In addition, Canada does not have wealth taxes or inheritance taxes.

ii) Creativity & Innovation From next-generation cars to smart phone technology, Canadian innovations touch the lives of millions worldwide. Canada offers some of the most lucrative R&D tax credits and accelerated deductions for research expenditures in the world. As well, relatively speaking, the cost of R&D in Canada happens to be the second lowest in the G-7, and as much as 12.9 percent lower than in the United States. Thats why nine of Canadas top 25 corporate R&D spenders last year were foreign investors. And at
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the height of the global financial crisis, these companies increased their R&D expenditures by a full 6.5 percent from 2008 levels!

iii) An Educated Workforce Investing in our people is a core Canadian value. More than half of all working-age Canadians have a post-secondary educationsecond highest among OECD countries.

The quality of Canadas educational system is outstanding. The Global Competitiveness Report 2010-2011, prepared by the World Economic Forum, ranks Canada : - No. 1 in the G-7, in the quality of its education system - No. 1 in the G-7, in the quality of management schools - No. 1 in the G-7, in the quality of primary education and
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- And No. 1 in the G-7 , in the quality of math and science education

iv) Living next door to the Giant As you know, Canada has unparalleled proximity to the vast U.S. market and the fastest shipping times from Asia and Europe to the heartland of North America. With the North American Free Trade Agreement (NAFTA), foreign companies have access to a deeply integrated market Canada, the United States and Mexicowith 453 million consumers and a combined GDP of US$17.1 trillion. Canada provides an ideal launching pad for this vast community. More than US$1.7 billion in goods and services cross the Canada-U.S. border every day. Its no coincidence that 17 of Canadas 20 largest cities are within a 90-minute drive of the U.S. border.

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3. Third, I would urge Chinese investors to focus. In this regard, Canada has a diversity of key and globallycompetitive sectors, which could well address some of the aspirations and ambitions expressed by HNW Chinese investors and firms; We are one of the richest countries in the world in terms of natural resources, providing vast opportunities for investment We have the 3rd largest global oil reserves in the world. We are the 3rd largest natural gas producer and the 6th biggest crude oil producer. Our aerospace industry ranks fifth in the world. We are fully integrated into the North American automotive market with annual sales of about 20 million vehicles and $US260 billion in original equipment parts

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 Our machinery and equipment manufacturing sector excellsrecorded sales of $26.8 billion in 2009 and continues to attract international investment We are a global agri-food powerhouse, and the KPMG Competetive Report rates Canada first in the G-7 for low food-processing costs The chemical industry in Canada is strong, with nine of the 10 largest chemical companies having located their production facilities And, our services sector is modern and dynamic, and represents over two thirds of our GDP

4. Finally, beyond building up our bilateral trade and investment portfolio, how can our two countries partner multilaterally?

In other words, if we have a relationship built on trust and economic alliances, it does beg a few questions that leaders from
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our respective public and privates sectors should contemplate and discuss together; how can we partner and put our mutual trust and economic cooperation to use in third countries? how can we bring together our respective strengths to seek tangible economic opportunities in other lands? And finally, how can our traditions and experiences help bring sustainable development in other jurisdictions, particularly those in the developing countries, and make for a more prosperous world? That seems to me one the next logical frontiers in our bilateral relationship.

In Closing We Canadians do not claim that Canada is the indispensible country. Indeed, all of our homes are castles.

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Yet, ours is truly a world on the move. Countries are moving up. And goods, services, and people are moving about, across all borders, and in record numbers. In this context, as a Special Advisor at Pace Global Advantage, a Canadian company with offices in Toronto and Geneva, we view Canada as a value-added nation. One that offers stability, and a viable alternative for those who seek to start and grow a new business; or to diversify their investments; or to establish a home away from home; or indeed, for those who seek a new home altogether. As you know, immigrants from across the world --- including millions from this region --- have arrived on our shores and helped build a dynamic, forward-looking, internationallyminded Canada.

They still come.

But one characteristic about this ongoing movement that is relatively new is the number of HNW individuals, investors, and

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entrepreneurs, who are attracted to Canada. They too are arriving on our shores.

And that is where PGA comes in, as we provide Global Migration Solutions for investors and High Net Worth individuals and their families. We work in conjunction with private bankers, wealth managers, family offices, and other advisors, using our three-pillar approach which combines Immigration Services, International Tax Planning, and Business Facilitation Services.

We provide options and solutions in one, coherent, seamless package --- which is what your investors today seek.

In closing, the new China that has clearly emerged is all about building a better future. People in this part of the world often risk everything for a better life; for a better opportunity for their kids; for a future built on hope.

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In turn, their dedicated labor and energy, the richness of their ideas, and their collective experiences, help to renew and rebuild nations. To propel their societies forward. And thats in part how we measure progress and development. In a similar fashion, the powerful forces of migration has, in good part, helped to build, sustain, and energize Canada. To be sure, we too have our burdens. However, as I listed earlier, there is much to like about Canada; for wanting, in some capacity, to be part of this decent land. This could well include prominent and sophisticated investors and entrepreneurs from this region. Talk about a win-win deal; a bridge between Canada and China for a more prosperous future. Thank you.

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