By Michael Bourque

In a speech to the Canadian Club last week, Bank of Canada Governor Mark Carney called on businesses to invest in Canada now – an action he sees as the most likely to prevent our country from slipping into another recession.

Interestingly, attracting new investment is the primary focus of Canadian manufacturers and exporters right now, and we believe that businesses and governments must work together in order to achieve this end.

In today’s interconnected economy, government plays a critical role in all aspects of business, from regulating its products, to taxation and regional development. Both governments and businesses agree that if we can make Canada an attractive place for investment, we will continue to grow, create jobs and generate the wealth required to look after the health and welfare of our citizens. So, the question becomes, how do we attract new investment? Let’s look at four key areas: taxation, regulation, energy and skills.

To attract investment, tax strategy is critical. On this front, Canada offers a clear advantage: we have one of the lowest corporate tax rates in the world. Plus, recent measures like the accelerated capital cost allowance for new machinery and equipment have helped manufacturers to convince their head offices to invest in Canada. But we need to keep working on our tax system to ensure that it continues to attract new investment. Tax measures that lead to business investment will result in better environmental performance, lower costs of production, and a commitment to keeping jobs in Canada.

On to the issue of regulation. In the future, many products – such as nanotechnologies – will be regulated products. Canadian manufacturers have identified excessive and duplicative regulation as the number one impediment to attracting new investment. That is why the Beyond the Border and Regulatory Cooperation Council initiatives, recently announced by President Obama and Prime Minister Harper, are so important. Reduce red tape, and you will encourage new investment.

Next, we can’t have a conversation about investment in Canada without talking about energy. Investment in the energy sector is by far the largest source of new investment in Canada. The delay of the Keystone XL pipeline (which would carry oil from Alberta to the U.S.) has led to a greater understanding of our reliance on the U.S. energy market, the cost of regulation, and the need for Canadian upgrading. These are issues that could be addressed by a national energy strategy. For the business of chemistry, that strategy would offer an opportunity to link natural resources to value-added manufacturing. Canada is rich in energy resources, including oil sands, shale oil and gas, and bio-mass from agriculture and forests. We have incredible energy know-how – from engineering and construction, to marketing and management. As the demand for energy grows, we need to ensure that our expertise is put to work here in Canada.

Finally, there are many areas where governments can work with businesses to attract new investment, but the last one we will address here is the area of skills. Skills shortages in certain sectors and regions are well known: in the oil sands of Alberta, for example. This is also a huge challenge for advanced manufacturers. Many new firms are forced to train workers themselves, which takes away from their productivity. From shop classes in high school, to immigration policy, to training mature workers, Canada needs to improve the readiness of its workforce for the manufacturing sector. This, in turn, will help to attract new investment.

Attracting more business investment is a terrific New Year’s resolution for Canada. Let’s work together to bring it home.

Michael Bourque is with the Chemistry Industry Association of Canada. You can follow him on Twitter:
@BourqChemistry.