Learn how Canada is helping global businesses 

Invest in Canada is committed to supporting clients and businesses. We are here to provide the most up-to-date information and advice for businesses on COVID-19. You will also find the latest updates from the Government of Canada.

Get valuable COVID-19 business resources from Invest in Canada

  • The most relevant government support programs for global investors
  • Recent updates, including new programs and additional funding
  • Expert advice and insights on choosing Canada for global business expansion

#CanadaResilient Bulletin

July 2020 Updates Download Now

June 2020 Updates Download Now

Government support: Canada’s COVID-19 economic response plan for global businesses

 

As a result of the COVID-19 outbreak, the Government of Canada has taken immediate, significant, and decisive action, including substantial business resources and support for global investors.

Here are a few specific government support programs of interest to firms with FDI-focused activities:

The new Canada Emergency Wage Subsidy, which covers 75% of salaries for qualifying businesses, is extended until December 19, 2020. Eligibility for the subsidy has changed to allow employers with a decline in monthly revenue of less than 30% qualify.


The Large Employer Emergency Financing Facility (LEEFF) offers bridge financing of up to $60 million or more to companies with annual revenues generally $300 million or higher.


The Business Credit Availability Program (BCAP), established to provide more than $10 billion of additional support to mostly small and medium-sized businesses, was expanded to include mid-sized companies with larger financing needs, including loans of up to $60 million per company and guarantees of up to $80 million.

The Government of Canada’s extended tax filing and payment deadlines allows all businesses to defer the payment of income tax. This relief amounts to $55 billion in liquidity support.


The Strategic Innovation Fund now supports projects to advance Canada’s medical fight against COVID-19, including vaccine and therapy clinical trials.


The Next Generation Manufacturing Supercluster is launching strategic challenges that will be intended to help both in the fight against COVID-19 and in building advanced manufacturing capabilities in Canada. Applications for these funding challenges can be made when these programs are announced. The Supercluster is also running a Rapid Response Funding Program for COVID-19, which has closed its initial call for applications.

View all government support programs for businesses

 

Canada's Resilience Promises New Opportunities

Resilience is defined as “the capacity to recover quickly from difficulties.” 

Time and time again, Canada has shown remarkable resilience in recovering from past economic crises.  In the heart of the financial crisis (2009), Canada’s GDP (a key measure of Canada’s economic health) had significantly declined by 3.22%, but it rebounded quickly by increasing by 3.51% in 2010 (exceeding 2007 pre-crisis GDP growth of 1.99%). In terms of FDI, Canada was the only G7 country to display continuous growth in the aftermath of previous recessions.

Read our latest analysis of Canada's recovery from past crises to find out what it means for the future.

Read article

Frequently asked questions: What you want and need to know.

 

Is my company eligible to receive federal government support?

The Government of Canada has developed a range of COVID-19 business resources in response to the pandemic. These measures include critical business support initiatives like the Canada Emergency Wage Subsidy and the Large Employer Emergency Financing Facility, which help employers avoid layoffs and the Business Credit Availability Program, which helps companies secure access to credit. There are also support programs for individual industries. This tool can help you understand what programs are most relevant to your business and whether your organization is eligible. It will also walk you through the process.

How can Invest in Canada support my company’s investment or expansion into Canada?

Invest in Canada provides tailored and confidential services that make it easier for global companies to choose Canada. We provide a range of investment support options, introductions and help to refine a roadmap to investing in Canada.

What do the changes to Foreign Investment Reviews mean for companies looking to do business in Canada?

Canada remains open to investment that benefits Canadians. The recently announced enhancements to the Investment Canada Act will allow the Government of Canada to ensure inbound investments do not introduce risks to Canada’s economy or national security during a fragile time. The many robust mechanisms regulating investments in the country will continue to ensure that foreign direct investments can keep on coming into Canada safely, stimulating our economy and contributing to prosperity for Canadians.

What impact do travel restrictions have on trade and business?

We know that many businesses depend on the free flow of trade and the integrated supply chain between Canada and the United States. The flow of goods, business and essential travel has been permitted to continue since the temporary border restrictions came into force on March 20, 2020. While business travel can continue, we recommend individuals consult Global Affairs Canada’s Global Travel Advisory.

Our organization manufactures personal protective equipment (PPE) and other medical equipment needed for COVID-19 response. Are there opportunities to supply the Government of Canada or Canadian provinces and territories?

The Government of Canada is implementing Canada’s Plan to Mobilize Industry to fight COVID-19. If your company manufactures products and services needed in the COVID-19 response, visit Buyandsell.gc.ca. You can view products and services that are needed, sign up for alerts on new procurement opportunities, and submit a form identifying your company’s capacity.

Are Immigration and Citizenship applications still operational and being processed during COVID-19?

Immigration and Citizenship Canada facilitates several programs that allow companies doing business in Canada to bring in the right international talent to fit their needs. Because of COVID-19, IRCC has indicated that there are delays in the processing of applications. IRCC is still processing GSS eligible work permits, but they may take longer than 2 weeks. For updates on specific programs, we recommend you visit their website.

My company is growing and hiring in Canada during COVID-19. How can I identify the right talent?

Doing business in Canada gives your company access to one of the highest skilled workforces and talent pipelines in the world. While COVID-19 has presented new challenges in growing your team, the Government of Canada has several programs that can help. Mitacs works with companies to find the right people and solve innovation challenges.

Are COVID-19 response measures and guidelines for operating businesses the same across Canada?

While federal COVID-19 business resources and support programs apply across the country, we recommend you check with provinces and municipalities to understand rules that may apply to your business.

Stay up to date with current Invest in Canada COVID-19 related news and insights

Aug2020
Canada flag reflected in office building

Canada's FDI Numbers for Q2 and the Economic Effects of COVID-19 by: Francis Campbell, Analyst, Research & Bruce Hillcoat, Senior Writer, Invest in Canada

Statistics Canada today released its Foreign Direct Investment (FDI) report for the second quarter (Q2) of 2020. FDI Inflow for the period is $10.8B CAD.

For comparison, in 2019, Q2 results were $20.3B, which reflects a decrease of 46.9% in Q2 of 2020. Compared to Q1 2020, the decrease in Q2 is 13.8%.

How will COVID-19 continue to affect investment in Canada?

It is important to note that the negative effects of COVID-19 on FDI had not been felt significantly in Canada during the January-February-March Q1 period, which saw a minor increase of 0.5% in FDI inflow compared to Q1 of 2019.

The economic slowdown we are facing created by the COVID-19 pandemic is naturally more pronounced in Q2, as the effects of global economic downturns are reflected in the full three-month period of the April-May-June reporting.

We are, of course, not alone in seeing a decline in FDI. The United Nations Conference on Trade and Development (UNCTAD) projected in June 2020 that FDI flows will decrease by 40% globally in 2020 and decrease a further 5% to 10% during 2021, to the lowest levels in the past 20 years. The Organisation for Economic Co-operation and Development (OECD) has published data that reveals FDI flows are expected to fall by more than 30% “even under the most optimistic scenario.”

In Q2, we are seeing that global investors are still making the kinds of important investments that bring jobs and prosperity to Canada, yet the pandemic has—as widely predicted—had significant impact on the international flow of FDI, including foreign direct investment into Canada.

Specific foreign direct investment activity in Q2

Drilling down deeper and looking at specific types of foreign direct investment in Q2 2020 compared to activity in the same period last year, here’s what we see.

Type breakdown of Canada's Q2 2020 FDI flows by proportion of total net flows

As a proportion of the total net flows for the quarter, Mergers and acquisitions represents, at 82.7%, the largest portion of FDI investment by type. This is followed by Reinvested earnings at 13.9%, and lastly Other flows at 3.3%. Though all of these types saw significant decreases when compared to the dollar amounts of Q2 2019, Mergers and acquisitions saw a 57.4% growth as a proportion of the Q2 2020 net flows (Mergers and acquisitions was 52.6% of net flows in Q2 2019.)

Changing the focus to source countries on an individual country basis, the United States remains the top contributor to FDI with $2.3B in net FDI flows, followed by the Netherlands ($1.5B), the United Kingdom ($0.8B), Hong Kong ($0.2B) and Brazil ($0.2B). At $5.0B in net flows, these five countries comprise 46.3% of total FDI inflows.

(It’s worth noting that Statistics Canada indicates “FDI flows capture the last country the investment was in before entering Canada” in its presentation of source country data.)

When we look at the change in source country share between Q2 2019 and Q2 2020, Germany had the greatest growth—a 92.3% ($0.036B) growth from Q2 2019. The United States (as the top contributor to FDI in Canada) saw a decrease of 86.9% (-$15.4B) compared to Q2 2019.

top 5 source countries of FDI into Canada

Foreign investment activity by sector

As the Q2 numbers reveal—10.8$B in FDI for the period, representing a 15.5% decrease from average quarterly FDI inflows of $12.8B over the last 10 years—there is still a lot of FDI activity occurring in Canada, even in the midst of this pandemic.

This activity reflects foreign direct investment into Canada taking place all across the country—in all kinds of companies, in all different sectors.

For Q2 2020, the top three industry sectors in which we see global investment in Canada are Other industries—those not individually reported by Statistics Canada—(88.2%), Trade and Transportation (10.2%), and Finance and Insurance (5.9%). Also, notably, Management of Companies and Enterprises contributed 5.0%. Energy and Mining and Manufacturing, however, saw combined flows of -$998.0M in the quarter.

Looking closer at the changes from Q2 2019 to Q2 2020, Other Industries and Management of Companies and Enterprises saw positive increases ($7.4B and $3.5B respectively), while the remaining industries accounted for a $20.5B decrease.

industry breakdown of Canada's Q2 FDI flows by proportion of total net flows

 

Canada's resilience remains strong

 

Despite this current reality—we had suggested after the Q1 report was released that things will almost certainly get worse before they get better—we continue to believe Canada is well-positioned for a strong and resilient economic transition that will see global investors choosing the business advantages Canada offers sooner and more widely than many expect. 

This confidence we have in Canada’s resilience comes not only from our current preparedness and attractive value proposition, but also from Canada’s past experience.

Canada has fared well in FDI growth after major financial crises

It’s worth again acknowledging that FDI to Canada has rebounded quite rapidly after the three most recent crises: the 1990-1992 recession, the 2002-2004 SARS-related economic downturn and the Great Recession of 2008-2009.

In all three crises, FDI stock experienced two consecutive years of accelerated growth after hitting the crisis trough. In two of these three crises, FDI stock returned to pre-crisis growth within two years.

FDI into Canada during crisis

 

What’s more, following the 2008-2009 financial crisis, Canada also demonstrated remarkable resilience in inbound FDI growth, outperforming OECD growth for four straight years.

It’s this kind of resilience that makes Canada’s current return to economic health not just a matter of hope, but a matter of history. Historical data such as this helps foreign investors make their own cases for choosing Canada as the world enters a new normal filled with continued uncertainty.

(For an in-depth look at Canada’s recovery from previous crises, read the Invest in Canada blog article Canada: A Competitive and Stable Investment during Recession.)

FDI into Canada can help ease the economic pain COVID-19 is inflicting

As we look to emerge from the negative economic effects of COVID-19, foreign direct investment will remain critical to Canada’s recovery. It will remain critical to keeping Canadians employed, helping businesses in Canada continue to grow and innovate, and ensuring communities thrive.

Global businesses need to grow while minimizing risk, which is why foreign investors will continue to choose Canada for both its tremendous opportunities and its stability.

Global investors see a Canada that is resilient, as our economy transitions, in time, from downturn to recovery.

They appreciate Canada’s agility, with programs that quickly and robustly support business.

And, yes, foreign investors see unmatched opportunity—the wide-ranging advantages Canada offers for present and future growth.

As surely as Canada will transition to recovery from this pandemic, foreign direct investment will remain pivotal to the economic future of Canada—and to long-term prosperity for all Canadians.

If you are a foreign investor and interested in what Canada can offer you, learn more at investcanada.ca, then reach out to an Invest in Canada advisor for assistance in establishing or expanding your global business in Canada. 

Jul2020
Woman in Lab

Canada’s Pandemic Response Shows Life Sciences Leadership by: Ian G. McKay, CEO, Invest in Canada

As a Canadian, I am proud of how Canada has responded to the COVID-19 pandemic. #CanadaResilient.

In Canada, we have focused on protection and preparation—by protecting everyone’s health and safety and preparing businesses here for transition to economic recovery. 

Although far from perfect, Canada has fared better in dealing with this pandemic than others around the world. As The Washington Post noted in mid-July, while Canada and the United States both confirmed their first cases around the same time in January, Canada has reported, on a per capita basis, about three times fewer infections than the United States and almost half the number of deaths

Canada’s relative success in responding to COVID-19 speaks to a culture of respect for the life sciences, for professional medical advice, and for each other. As pointed out in that Washington Post article, “The Canadian people have been less divided and more disciplined” over measures to slow the spread of COVID-19. 

Canada’s Life Sciences Sector Shines 

As dark clouds go, the COVID-19 pandemic is among the worst to hit our modern world. But we can choose to see a silver lining. For Canada, one such bright spot is that the pandemic is shining a light on the success of Canada’s innovation economy.  

The life sciences sector in Canada is at the centre of this burgeoning innovation economy—a position of prominence that has become more apparent in this pandemic, and in Canada’s response to it. 

SIF Reflects Canadian Leadership 

An example of the role of life sciences in the innovation economy? On April 23, 2020, Canada’s Strategic Innovation Fund (SIF) brought forward initiatives advancing Canada’s countermeasures in the fight against COVID-19. Specifically, SIF was expanded to funding in support of clinical trials for COVID-19 related vaccines and therapies.  

A noteworthy applicant and recipient has been AbCellera, a Vancouver-based company that will receive up to $175.6 million in funding for a two-phase project. The first phase focuses on the company’s world-leading antibody discovery program, followed by the second-phase building of a facility, the first in Canada, that can go from a patient sample to manufacturing antibodies for clinical testing. 

#CanadaResilient 

At Invest in Canada, we share the Strategic Innovation Fund’s goal of “making sure that Canada is a top destination for businesses to invest, grow and create jobs and prosperity.” We took note early on of the many companies in Canada—both domestic and global—showing tremendous innovation in the face of COVID-19. Among the many #CanadaResilient stories we shared through our social media channels were the following: 

  • Thornhill Medical, based in Toronto, has been producing and delivering increased numbers of revolutionary portable ventilator systems. 
  • Medicago, a Quebec City-based vaccine company, has successfully created a candidate for a coronavirus vaccine using their innovative plant-based technology. In mid-July, The Globe & Mail reported that Medicago was spearheading the first Canadian clinical trial of any COVID-19 vaccine
  • Roche, a multinational healthcare company in Laval, Quebec, created an antibody test to help determine if a patient has been exposed to COVID-19 and if the patient has developed antibodies. The antibody test has the largest clinical studies program, with more than 10,000 samples tested. With the test now available to laboratories, healthcare professionals and patients in Canada, Roche’s test is recognized as a significant contribution to Canada’s testing capability and is aiding in the country’s economic recovery. 
  • Hexoskin, a Montreal-based smart shirts company, has developed a high-tech shirt that monitors COVID-19 patients’ vital signs from home. By installing patient-monitoring systems in hospitals and setting up telehealth teams of its own, Hexoskin supports hospitals by freeing up space and reducing the burden on staff. 
  • Sona Nanotech Inc., a Halifax-based medical device company, is creating a ground-breaking antigen test to detect the presence of COVID-19, rather than detecting antibodies after infection. This innovative rapid-response detection test is designed to be used at point-of-care and deliver results in just 10-15 minutes. The company is currently validating the test results to ensure quality and accuracy. 

What Drives Innovation In Canada? 

Innovation success stories like these show the attractiveness of Canada’s life sciences sector to global investors. Driving this innovation is chiefly Canada’s talent—which encompasses several dimensions that help fuel the tremendous innovation ecosystem in this country. 

Canada is home to the highest educated workforce in the OECD, with an education system that continues to make investments in critical life sciences research through institutions of higher learning. In fact, Canada outpaces all other G7 countries on R&D investments in the higher education sector. This commitment to innovation includes Canada’s 2018 R&D investments, reflecting the biggest investment in science and university research in Canadian history

To meet the demands of companies and investors seeking specific talent they can’t easily access in Canada, there’s the Global Skills Strategy, which can bring these highly skilled people to Canada within two weeks. 

And, there’s Canada’s record number of international students—over 642,000 in 2019. With 96% of international students saying they would recommend Canada as a study destination, more graduates are choosing to stay: 60% of international students plan to apply for permanent residence in Canada.   

A Few Facts Beyond Talent  

In addition to talent, why do so many global investors choose to invest in Canada’s life sciences sector? Consider the following: 

The world’s ten largest biopharmaceutical companies are in Canada, most with R&D and manufacturing operations, and all perform clinical trials here. Canada is also the world’s 10th largest pharmaceuticals market, with annual pharmaceutical manufacturing production valued at $10 billion and annual pharmaceutical sales of over $27 billion

According to Pitchbook, which specializes in financial data, Canada is home to the world’s 2nd largest number of biotechnology companies. 

The Quebec-Ontario Life Sciences Corridor, the second-largest life sciences cluster in North America, is also one of the largest bio-clusters in the world, with more than 1,100 companies, 66,000 qualified workers, and 490 undergraduate and graduate programs in biological and bio-medicine sciences.  

Canada puts a great deal of investment into life sciences R&D—including universities, non-governmental associations, institutes and incubators all throughout the country. In Toronto’s Discovery District alone, over $1 billion is invested annually in public and private medical research.   

And one more key fact: Canada is the lowest-cost G7 country in biotechnology, product testing and clinical trials industries. 

A Life Sciences Sector That Will Continue To Grow 

Canada’s success at building a vibrant life sciences sector is grounded in its national character and an ethos of caring. Choosing to have universal healthcare for all citizens is part of this Canadian way. 

Canada’s approach to life, to business, to prosperity is about welcoming others from around the world to come here, to bring their skills, their innovative ways. Canada’s Global Skills Strategy, as mentioned, has helped companies in the life sciences find the best talent, and it will continue to do so. 

With programs and incentives that attract life sciences investment, more growth will occur. For example, in addition to the Strategic Innovation Fund, there’s the long-running Scientific Research and Experimental Development (SR&ED) tax incentive program, tailor-made for many life sciences activities. 

The closer you look at Canada, the clearer the strength of this country’s life sciences sector becomes. Certainly during these times of COVID-19, but also in the months and years and decades to come. 

Interested in what Canada can offer you, a global investor? Visit investcanada.ca and learn more. Then reach out to an Invest in Canada advisor for assistance in establishing or expanding your global business in Canada. 

Jun2020
skyscrapers with flag of canada

Canada: A Competitive and Stable Investment During Recession by: Karicia Quiroz, Research Manager, Invest in Canada

In past recessions, Canada has consistently been a competitive and reliable investment destination for foreign investors.  Canada not only rebounded immediately after the end of the 1990-1992 recession and the 2008-2009 financial crisis with positive growth in annual foreign direct investment (FDI) inflows, it was the only G7 country to display continuous growth in the aftermath of both economic downturns. 

Examining Canada’s FDI and economic recovery from historical crises reveals that Canada is well-positioned for recovery from COVID-19. Why? Let’s take a deeper look.

Economic Recovery Efforts in Canada

As Ian McKay, CEO of Invest in Canada, highlighted in a recent blog post, there is a perspective in the trade and investment community that Canada’s current response to the pandemic has been one of the most effective in the world.  To compare, Canada’s stimulus package for COVID-19 is a lot bigger (9.8% of GDP) than the Economic Action Plan (EAP) for the 2008-2009 financial crisis (3.9% of GDP).  Nevertheless, we can learn a lot about the potential COVID-19 recovery path by observing the past. 

In the thick of the financial crisis, GDP recovery began to occur within six months of the launch of the January 2009 EAP, with a 0.9% increase in real GDP in Q3 2009 and a 5.0% increase in real GDP in Q4 2009 after three consecutive quarterly periods of declines.  This GDP recovery (and subsequent recovery in 2010) was partially attributed to Canada beginning the recession with the lowest debt-to-GDP ratio in the G7 and, hence, a strong fiscal position to support the economy without needing to rely on tax increases; as well as extensive fiscal measures in the EAP.  As a result of the EAP, the government spent a significant amount of fiscal dollars on infrastructure investment (25.96% of the EAP), job creation and tax relief (21.44%), and industrial support (19.76%).

During the financial crisis, Canada also had the lowest decline in real GDP amongst the G7, showing the country’s ability to navigate the crisis. Unsurprisingly, while assessing the potential global economic impacts of COVID-19, the IMF forecasts that Canada will drop its real GDP by 6.2% this year, the third lowest GDP decline in the G7 (with Japan and the US first and second). (Note: The IMF will be releasing updated World Economic Outlook forecasts on June 24th.) 

In addition to this, reviewing how both Canada’s GDP and FDI stock (total accumulated FDI at a given point in time) rebounded rapidly after the 2002-2004 SARS pandemic and the 2008-2009 financial crisis with strong linkages between the two variables (which is explained in the next section), two things are clear:

  1. Canada’s current COVID-19 fiscal spending will be instrumental in stimulating the economic and FDI recovery- and possibly to a larger extent than the previous financial crisis, and
  2. Canada’s anticipated economic recovery through a rebound in GDP will most likely be followed by positive FDI growth, especially since the FDI contribution to Canada’s economy is growing.

Let’s take a look at the historical numbers, which demonstrate Canada’s ability to rebound after a crisis.

Canada’s Historical Resilience

Resilience is defined as “the capacity to recover quickly from difficulties.”  And Canada has certainly recovered quickly from past crises from both an FDI and an economic perspective. 

Canada’s FDI stock experienced positive annual growth during the entirety of the 1987-2018 period.   During previous economic downturns, growth in FDI stock decelerated but rebounded fairly quickly.  In the early 90s recession, this growth decelerated to 1.98% by 1992, but accelerated by 1993 and exceeded pre-crisis growth by 1994 (9.26%).  During the SARS pandemic, FDI stock growth behaved similarly, and accelerated one year after the pandemic ended and subsequently exceeded pre-crisis growth by 2006 (9.89%).  However, it took three years after the end of the 2008-2009 financial crisis for FDI stock to reach a point of accelerated growth.  All the same, FDI in Canada overall rebounded within a relatively short period of time with FDI stock returning to accelerated growth within one to three years at the end of each previous crisis. Foreign investors can rest assured that FDI in Canada has remained resilient following previous economic downturns.

Interestingly, Canada’s GDP, a key measure of Canada’s economic health, rebounded even more quickly than FDI following both the SARS pandemic and the financial crisis.  After annual GDP growth declined by 1.36 percentage points in 2003, GDP growth rebounded to 3.30% by the last year of SARS (2004), which was higher than 2001 pre-crisis growth (1.62%).  Likewise, after a contraction of nearly four percentage points by 2009, GDP growth rebounded to 3.51% one year after the financial crisis ended (2010).  Again, this exceeded 2007 pre-crisis growth (1.99%).  In both scenarios, GDP growth rebounded quickly after the crisis and ended up surpassing pre-crisis growth, highlighting Canada’s economic resilience during crisis.

Figure 1

FDI's growing contribution to the Canadian Economy

 

What potential global investors should also take into account is FDI’s growing contribution to the Canadian economy, which has not slowed down during past crises.  The contribution of FDI to Canada’s GDP (FDI stock % of GDP) grew during SARS and the financial crisis (with the exception of 2004), and it has been consistently rising.  For instance, while FDI contributed 31.82% to the economy in 2007, as the FDI contribution to GDP continued its upward trend, this figure expanded to 45.21% by 2018, as seen in Figure 1.

This increasing support of the Canadian economy paints a positive picture for investment in Canada.  And it is no surprise that FDI growth recovery has appeared to follow GDP growth recovery in the aftermath of a crisis.  This backs Canada’s position as a country that has demonstrated resilience (rapid recovery) in economic and FDI growth after crisis, where FDI is certainly a key contributor to the economic recovery.

How Canada Compares to the G7

In comparison to its G7 peers, a deeper analysis into the United Nations Conference on Trade and Development’s (UNCTAD's) annual FDI inflows illustrates Canada’s FDI value proposition as a stable and, thus, competitive destination for foreign investment in face of crisis. 

Following the 90s recession, Canada was the only G7 country to demonstrate eight years of consecutive increases in FDI inflows.  Following the financial crisis, Canada was also the only G7 country to display four years of consecutive increases in FDI inflows.  While other countries faced declines in FDI in the aftermath of historical recessions, Canada reliably brought in more FDI, which is a signal to global investors that Canada is a relatively safer and more stable market than other advanced economies during economic crises.  Figure 2 and Figure 3 offer a detailed overview of FDI inflows activity across the G7.

Figure 2

chart showing FDI Flows, Annual Growth Rates, Post 1990-1992 Recession

Figure 3 

chart showing FDI Flows, Annual Growth Rates, Post 2008-2009 Financial Crisis in G7 countries

What’s Next For Canada

UNCTAD has predicted a 30-40% decrease in FDI flows worldwide this year. In fact, Statistics Canada recently released its figures for Canada’s Q1 FDI flows, which were 5% ahead of the results from Q1 2019. While the full effects of COVID-19 have not been felt yet, we do expect a drop in Q2 2020. For an analysis on these numbers, read our recent blog post "Canada's FDI Numbers: 3 Questions, 3 Perspectives". Nevertheless, FDI in Canada has consistently demonstrated its resilience in quickly recovering from past crises.  This is illustrated by the increasing ability of FDI to support Canada’s economy, shown by an FDI contribution to Canadian GDP that has risen during times of crisis; the linkages between Canada’s economic and FDI recovery; and Canada’s FDI value proposition as a competitive, resilient, and stable country for global investment.

FDI in Canada is well-positioned for recovery from the COVID-19 pandemic and, therefore, the country remains a top investment choice for global investors.

If you’re a global company looking to expand in Canada, contact us to discuss your project.

May2020
Engineer of wind turbine

How Cleantech is Leading Canada to a Greener Recovery by: Saïka Sarazin, Investor Services Advisor, Invest in Canada

Canada is a world leader in developing clean technologies across industries. The economic recovery from COVID-19 presents an opportunity for continued innovation in the space. As more industries eye opportunities to lower emissions in their business and supply chains, government programs and companies across Canada serve as models. Under the framework established by the Pan-Canadian Framework on Climate Change and Clean Growth (PCF), the Government of Canada—together with provincial and territorial governments—has committed to “modernize procurement practices, adopt clean energy and technologies, and prioritize opportunities to help Canadian businesses grow, demonstrate new technologies and create jobs.”

Defined as a technology that offers environmentally sound solutions to the world’s ecological challenges, cleantech solutions continue to be adopted by businesses operating in Canada. As Canada moves forward to achieve net-zero emission targets and limit the effects of climate change, there is an opportunity for industry leaders to help guide that transition over the coming months, years and decades.  

Cleantech as a Catalyst for Climate Change in Canada 

Canada’s cleantech sector has shown rapid growth in the last few years, accounting for 3.2 % of Canada’s GDP and 317,000 jobs in 2017. The Global Cleantech Innovation Index ranked Canada first among G20 countries and fourth globally, with especially strong scores for emerging clean technology in 2017. As the OECD’s second most highly educated workforce and its openness for green innovation, Canada is poised to become a powerhouse in cleantech.  

Federal programs and initiatives are already supporting industries during the transition to a low carbon economy. The $2.3 billion Clean Growth Hub Program supports companies with innovation, commercialization, and adoption of cleantech by coordinating federal programs. Sustainable Development Technology Canada (SDTC) supports and funds the development and demonstration of new sustainable technologies. Canada's approach is not exclusive to just a few industries – the Agricultural Clean Technology Program is a $25 million, three-year investment that supports investments in precision agriculture and agri-based bioproducts, which helps reduce emissions. Leading by example, Canada implemented its Green Procurement Strategy which commits to introducing environmental considerations when it procures goods and services from businesses to better aligned with the Pan-Canadian Framework on Climate Change and Clean Growth.  

Since the pandemic, increased focus has been placed on environmental considerations when allocating fiscal packages to businesses. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), called for governments to adopt forms of sustainable finance to tackle climate change when supporting businesses through the economic slowdown caused by COVID-19. In the past few months, Canada has announced many incentives that could support a green recovery. The recent Large Employer Emergency Financing Facility (LEEFF) incentive has the goal of providing funding to larger-sized businesses. The companies applying to this fund are required to publish annual climate-related disclosure reports and to include how their future operations will support environmental sustainability and national climate goals. The proposed $750 million Emissions Reduction Fund, introduced concurrently in April, has the objective to provide primarily repayable contributions to conventional and offshore oil and gas firms to support their investments to reduce greenhouse gas (GHG) emissions and transition to green energy. 

Leveraging Canadian Tech to Support Canada’s Net-Zero Emission Objective for 2050 

With more than 2.8 million STEM graduates and the OECD’s second most highly educated workforce, the depth and quality of Canada’s tech talent pool is undeniable. Innovation is at the forefront of Canada’s strategy for transitioning to a low-carbon economy. Businesses are leveraging Canadian talent to tackle climate-related solutions for a more sustainable future. 

Ubisoft Montreal, in collaboration with Mila Institute, uses machine learning to educate people about the long-term impacts of climate change and enable them to make conscious decisions to avoid them. The application generates an estimate of what a neighbourhood could look like in 2050 if located in a flooded area. 

While the transportation industry has traditionally been a large source of GHG emissions, investments in electric vehicles, hydrogen and carbon capture by the private sector has helped with the decarbonization of this industry. Squamish, British Columbia-based Carbon Engineering is leading the commercialization of Direct Air Capture technology which makes synthetic fuel for the transportation usage by sucking carbon dioxide (CO2) out of the atmosphere and combining it with hydrogen. In 2019, Air Liquide announced the construction of the largest proton-exchange-membrane (PEM) electrolyzer in the world, in Bécancour, Québec, which could bolster further investments in hydrogen. To strengthen Canada’s leadership in electric vehicles, the Automotive Parts Manufacturers’ Association (APMA) of Canada announced plans for the first made-in-Canada zero-emission concept vehicle earlier this year. Aligned with Canada’s zero-emission objective, Project Arrow will be designed, engineered, and built by the country’s world-class automotive supply sector and post-secondary institutions.  

Canada’s mining industry is also leading the way. In 2019, Newmont Goldcorp inaugurated Canada’s first all-electric underground in its Bolden gold mine in Northern Ontario. It will eliminate the use of diesel equipment and replace them for low-carbon vehicles and digital mining technology. According to the World Gold Council, this transition could potentially reduce Bolden’s GHG emissions by 70% annually.  

This is only a snapshot. Cleantech innovation in Canada is a national story, one that includes all provinces and territories and touches on every industry. As companies in Canada and around the world chart out a sustainable future, Canada’s cleantech sector is poised to continue leading the way.  

For more information on Canada’s cleantech sector, visit https://www.investcanada.ca/industries/cleantech

If you’re a global company looking to invest in Canada, contact us to discuss your cleantech project. 

May2020
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Canada's Resilience Promises New Opportunities by: Ian McKay, CEO, Invest in Canada

During this COVID-19 pandemic, Canada’s priority has been one of protection and preparation: protecting people’s health and safety while preparing business for a smooth transition to recovery.

By following the advice of Canada’s public health officials, this entire country—our citizens, business people and political leaders—have been working together to make sure we are well-positioned for a strong and resilient economic transition that will see more global investors choosing Canada in the weeks, months and years ahead.

This confidence I have in Canada’s resilience comes not only from past experience, but also what I am presently seeing and hearing from others.

One recent conversation that stands out involved a representative of one of Canada’s most important trade and investment partners, who believes Canada’s collective response to this crisis has been more effective than any other country in the world, particularly in terms of listening to the health experts, responding quickly, and delivering meaningful government support programs.

The proof is in the present

What kind of government support programs were being referenced? Let’s take a look at specific actions taken by the Government of Canada that global investors will want to know about.

On May 11, 2020, Canada’s federal government announced the establishment of the Large Employer Emergency Financing Facility (LEEFF), which offers bridge financing of up to $60 million or more to companies with annual revenues generally $300 million or higher.

That same day, the Business Credit Availability Program (BCAP), which had been established earlier in the pandemic to provide more than $10 billion of additional support to mostly small and medium-sized businesses, was expanded to include mid-sized companies with larger financing needs. Administered through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC), the program includes loans of up to $60 million per company and guarantees of up to $80 million.

Canada’s covid-19 economic response plan supports global investments

These recent updates are in addition to programs such as the new Canada Emergency Wage Subsidy, which covers 75% of salaries for qualifying businesses retroactive to March 15, 2020, with employers of all sizes and across all sectors of the economy being eligible.

There’s also the Government of Canada’s extended tax filing and payment deadlines, which allows all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18 and before September 2020. This relief amounts to $55 billion in liquidity support.

Moreover, allowing businesses to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments, as well as customs duty payments owed for imports, until June 2020 is the equivalent of providing up to $30 billion in interest-free loans to Canadian businesses.

Canada’s response to COVID-19 continues through such expanded initiatives as the Strategic Innovation Fund, which now supports projects to advance Canada’s medical fight against COVID-19, including vaccine and therapy clinical trials.

What’s more, opportunities through Canada’s Superclusters, including $50 million in funding from Next Generation Manufacturing Canada to support companies supplying essential equipment, products and therapeutics, also reflect critical COVID-19 responses for business.

As a Canadian, I am proud of how this country—from its federal, provincial and municipal governments, to its business community comprising both global and domestic investors, to its citizens nationwide, including both our frontline and background workers—has come together and shown such tremendous resilience in the face of this terrible pandemic.

I share this positive news on how Canada’s support programs are reassuring global investors while remaining fully aware of the current reality. As you read this, the COVID-19 virus continues to take more lives in Canada and around the world. We cannot forget this, even though we are all eager for economic prosperity to return as quickly as possible. We need to keep focusing resilience efforts on both protecting our health and preparing our economy for recovery.

On that note, I trust that you will stay safe and well. Brighter days are ahead.