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Inward Investment Guides

Canada's Economy on a Growth Track

Traditional and innovative industries are driving economic growth across Canada.

Mark Crawford (Fall 2012)
(page 2 of 2)
Toyota Motor Manufacturing Canada (TMMC) has a three-million-square-foot facility in Cambridge — a strategic location at the gateway to Canada’s Technology Triangle in southwestern Ontario. This is the first manufacturing operation outside Japan where the company produces the Lexus model and its location selection was based on the significant access to the skilled work force and proximity to U.S. borders. Toyota Motor Manufacturing Canada (TMMC) has a three-million-square-foot facility in Cambridge — a strategic location at the gateway to Canada’s Technology Triangle in southwestern Ontario. This is the first manufacturing operation outside Japan where the company produces the Lexus model and its location selection was based on the significant access to the skilled work force and proximity to U.S. borders.
Quebec
Improving job numbers this year have boosted Quebec's economic performance, which is growing at a modest 1.6 percent in 2012 and projected by RBC to increase to 1.9 percent in 2013. Key industries include aerospace, life sciences, ICT, microelectronics, environmental technologies, and agriculture.

The provincial government has made several life sciences investments this year, including $2.6 million to Pfizer Canada for a $31.7 million expansion of its plant in the borough of Saint-Laurent in Montreal to increase production of multivitamins. About $15 million was also provided to Medtronic to assist with its $50 million facility expansion in Kirkland, where it manufactures cryoablation products for the treatment of atrial fibrillation. Medtronic will also establish a medical research and training center on cryoablation in Pointe-Claire.

"This project offers extremely promising development prospects for the Montreal area and Quebec as a whole," states Sam Hamad, Minister of Economic Development for Quebec. "The life sciences sector is a cornerstone of Quebec's economic development, and the financial support granted to Medtronic shows the government's determination to promote the development of leading-edge medical equipment in Quebec."

Quebec is also home to a globally recognized aerospace sector, including major companies like Bombardier Aerospace, Bell Helicopter Textron, Pratt & Whitney Canada, Rolls-Royce Canada, and Lockheed Martin. The vitality of this cluster was a major reason Aerolia Canada, a subsidiary of French firm Aerolia SAS, decided to establish its headquarters and assembly plant in the greater Montreal area. Workers at the $82 million facility will design and manufacture the fuselage for Bombardier's Global 7000 and 8000 aircraft.

"Quebec's government support, along with the high quality of North American suppliers, was critical in our decision to set up headquarters in Saint-Laurent," says Christian Cornille, president of Aerolia SAS. "Greater Montreal has a large pool of aeronautics firms, making it a strategic location for our assembly plant," he adds.

Atlantic Canada
Four provinces comprise Atlantic Canada - Newfoundland/Labrador, Prince Edward Island, Nova Scotia, and New Brunswick - and represent a mix of natural resource-based industries (energy, mining, forestry, paper, fishing) and knowledge-based industries such as ICT, clean energy, life sciences, and back-offices/call centers.

"Newfoundland and Labrador are doing fairly well with oil and gas and mining this year," indicates David Campbell, economic development consultant and president of Jupia Consultants located in Moncton, New Brunswick.

The RBC reports that nominal exports for Newfoundland/Labrador were up by 8.4 percent on a year-over-year basis in the first quarter of 2012, "with both the province's major export categories of energy and industrial goods showing solid growth."

Nova Scotia has the largest provincial economy in the Atlantic region. Among the important industries here are life sciences and ocean nutrition. Admiral Insurance, a British firm, recently established a back-office call center in Halifax that will provide 300-400 customer service jobs. In August 2012, UPS opened a new 50,000-square-foot logistics facility in Halifax, a key part of the company's Atlantic Canada expansion strategy.

"Perhaps the most impressive economic news is that the Halifax shipyard recently received a long-term, $25 billion military processing contract to build a variety of combat vessels, which will be a big boost to the Halifax economy," adds Campbell. Prince Edward Island - with a population of only 125,000 - is the smallest province in Atlantic Canada. Even so, it still packs some economic punch: Nominal exports were up by almost 28 percent in the first quarter of the year, due to a nearly 150 percent increase in machinery and equipment exports. "While the outsized gain in machinery and equipment exports is unlikely to be sustained, the recent spike implies that the annual growth rate will be quite strong in 2012," states RBC. Other key industries include agriculture and fishing.

Although New Brunswick is growing at a slower pace (1.6 percent in 2012 and 2.1 percent in 2013), it still attracts some large-scale development. For example, Salesforce.com recently bought Radian6, expanding its presence in the province by adding 300 new jobs. "IBM also acquired Q1 Labs and Elite purchased Whitehill Technologies," says Campbell. "So big multinational firms are now doing IT in New Brunswick."

Siemens has entered into a partnership with New Brunswick (NB) Power to create a Centre of Excellence in Fredericton for smart grid technology. The goal is to integrate its smart grid technology with the province's electrical system to better understand customer usage in real time and reshape the demand on NB Power's electrical system. Automating and shifting electricity to off-peak times will maximize efficiency and save money.

A $60 million infrastructure improvement at the province's Port of Belledune is designed to attract companies that need to manufacture large, industrial products that are most easily built at the port and then shipped to a final destination by boat. The Modular Fabrication Facility (MFF) allows the layout and assembly of large pieces of equipment, often designed for major mining, energy, or construction projects. The first user of MFF is MAN Diesel & Turbo Canada, which is building an electrical module using local contractors and service providers.

Global Effects
"The global environment in which provincial economies operate continues to generate plenty of twists and turns," states RBC. "South of the Canadian border, the start to 2012 for the U.S. economy was a little softer than we anticipated, but we believe that the negative factors that dampened growth will reverse and produce faster growth going forward. In fact, this strengthening of the U.S. economy will be a key driver of provincial growth in both 2012 and 2013, particularly for Ontario, which depends heavily on the U.S. market. All in all, barring any calamitous developments in Europe or elsewhere, we continue to expect an external context that will be broadly supportive of provincial growth."
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