First Person: Ontario’s Investment Office Is a One-Stop Information Source for Investors
Allan O’Dette was appointed as Ontario’s first Chief Investment Officer (CIO) in April 2017. He leads the newly created Ontario Investment Office, which has both a domestic and international facing mandate to secure increased investment in key sectors while strengthening the overall competitiveness of Ontario firms.
Location Canada 2017
The province of Ontario is a sponsor of Area Development’s Location Canada supplement as well as our Canadian FDI Forum, which will take place in Quebec City, Oct. 22–24, 2017. The Forum brings together Canadian economic development organizations and consultants to industry and other business experts who offer their perspectives on growing Canada’s economy.
AD: Can you describe the “one-stop” Business Concierge Services of the newly established Ontario Investment Office?
O’Dette: Let me first explain why we established the Ontario Investment Office (OIO). There was a great deal of introspection that went into its development. It started with a question: What is the difference between good and exceptional? We did a good job at touting our low business costs, innovative prowess, great quality of life, superior market access and amazing incentive programs. But this didn’t explain who to contact, how to get things done or when you could expect to accomplish your business goals. What seemed to be missing was the human element — the fact that there were actual faces behind the exterior of government.
And it’s not just about FDI. We have transformed our business growth/expansion activities through a new integrated approach to client management and business development that makes Ontario best-in-class.
Whether you are a domestic business trying to get established or an international multinational looking to expand beyond your borders, the process can frankly be overwhelming. Where do you even start? You have state/provincial government, municipal government, and of course, federal government. Each comes with its own multiple layers and processes. How can an investor be expected to know all the right connections and the proper business channels?
We made a conscious decision to untangle the red tape. With everything under ‘one tent,’ our Business Concierge Services deliver tailored insight and intelligence on taxes, regulations, incentives, and immigration. We help investors build relationships with all levels of government and across supply chains.
By working with us, you don’t just get a list of services; you get a single point of contact — a champion — who will be with you from search to shovel and beyond.
AD: How does doing business in Ontario compare with doing business in the U.S. from a tax and financial standpoint?
O’Dette: We are extremely competitive from a tax and overall business cost standpoint. Reports such as KPMG’s 2016 Competitive Alternatives show Canada as having the lowest business costs in the G7. A deeper analysis of those numbers shows an even greater advantage specifically to the province of Ontario. The combined federal/Ontario general corporate income tax rate is 12 percent lower than the U.S. average. As well, employer health costs in the U.S. can be three times higher than those in Ontario. And perhaps most notably, we have an R&D cost advantage of nearly 28 percent versus the U.S.
With everything under ‘one tent,’ our Business Concierge Services deliver tailored insight and intelligence on taxes, regulations, incentives, and immigration. AD: As Ontario is the most populous province in Canada, what labor force/education and training advantages does it offer to companies choosing to locate in the province?
O’Dette: From a statistical standpoint, 67 percent of adults in Ontario have a post-secondary education, higher than any other OECD country. Our 44 colleges and universities ensure that graduates have the skills and knowledge to excel in their chosen career field. The province produces about 40,000 STEM graduates per year, plus thousands more with masters and Ph.D.s in a diverse array of fields.
The world is taking notice of our world-class academic institutions such as the University of Waterloo, University of Toronto, and Western University. But what I think is truly unique is that academia doesn’t work in isolation of industry. They work together to identify potential skills gaps to develop curriculums and training programs that prepare workers for the new era of advanced manufacturing.
AD: Are particular sectors being targeted for investment? Automotive, ICT, life sciences, others? Are there specific incentives offered to businesses in these sectors?
O’Dette: As IT continues to converge across all traditional sectors, we sometimes find ourselves talking in terms of a knowledge-based economy. For example, we can no longer talk about automotive without including IT. As we herald a new era of connected, autonomous, and electric cars, it’s becoming less about rubber and steel and more about high strength, lightweight advanced materials combined with cutting-edge vehicle intelligence. And because we have the second largest IT cluster in North America, we continue to thrive. That’s why we like to say that we are “Inspired by history, but not tethered to it.”
However, the quick answer to the question is that we have strengths in automotive, aerospace, cleantech, fintech, food and beverage manufacturing, automation and robotics, life sciences, and ICT. We have too many incentives to list here, but yes, we have them based specifically on each sector, in addition to unique geographical locations and business types.
The province produces about 40,000 STEM graduates per year, plus thousands more with masters and Ph.D.s in a diverse array of fields. AD: What resources are available for research and development?
O’Dette: Ontario is where industry, academia, research centers, incubators, accelerators and government collaborate to take world-changing concepts and ideas to commercialization quickly. It really is an innovation ecosystem like no other. When investors see the amount of top-tier companies doing research here, they are always taken aback.
For example, GM chose to partner with the University of Waterloo to develop their next generation of autonomous cars as opposed to strictly using Silicon Valley. The 2017 Ford GT, a masterpiece of engineering, was designed and built here. Johnson & Johnson’s Innovation launched their first JLABS incubator outside of the U.S. in downtown Toronto. And IBM Watson partnered with the University Health Network in Toronto to take on Parkinson’s disease. The list goes on: Amazon, Apple, Microsoft, GE, AMD, Cisco, SAP, Xerox, Oracle, Google, Ericsson, Huawei, GlaxoSmithKline, and Pfizer are just a few of the others.
To encourage innovation, we have the Scientific Research and Experimental Development (SR&ED) Program. Combined with various other provincial R&D programs, this can reduce after-tax costs by about 40–60 percent.
AD: Are SMEs (small and medium-sized enterprises) encouraged to invest in Ontario?
O’Dette: Absolutely. It’s a great place for SMEs to become plugged in to new and innovative supply chains such as those now being forged in the high-tech automotive and fintech sectors. Innovation never sleeps; yesterday’s small companies are tomorrow’s big players. And with the advent of artificial intelligence solutions that were not even possible a few short years ago, the growth trajectory of truly innovative and collaborative firms will be nothing short of astounding. And there are few places in the world that this can happen outside of Ontario.
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