Attracting foreign direct investment is very key to countries like Canada. Canada needs to be cost competitive with other jurisdiction in order to received FDI into Canada This presentation looks at the strides Japan has made with its’ competitiveness and how their approach could be adopted by other countries like Canada.

1. Canada vs Japan Competitiveness
PaulYoung | PaulYoung CPA, CGA
Date: December 30, 2017

2. PaulYoung - Bio
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – EmergingTechnology
• SME – Financial Solutions
• SME – Business Process Change
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. Overview
 Attracting foreign direct investment is very key to countries like Canada.Canada needs
to be cost competitive with other jurisdiction in order to received FDI into Canada
 This presentation looks at the strides Japan has made with its’ competitiveness and
how their approach could be adopted by other countries like Canada.

4. Agenda
 Canada and JapanTrade
 Taxation – Business – (Canada vs Japan)
 Research and Development (G20)
 Japan and Manufacturing
 Canada and Manufacturing

5. Canada and JapanTrade
Source - http://www.statcan.gc.ca/daily-quotidien/170504/t003c-eng.htm or http://www.gbm.scotiabank.com/English/bns_econ/forecast.pdf
Foreign Relations
“I am concerned that what happened recently might lead
to a stasis in our relationship and that’s not good, that
would not be very encouraging,” Numata said. “Certainly
(Trudeau) may have been able to avoid a situation where
people would call Canada’s attitude as something
‘unpredictable.’ … It’s true that the word ‘unpredictability’
is used in relation to (U.S. president) DonaldTrump.”
Source - http://nationalpost.com/news/politics/we-dont-know-what-canada-wants-japanese-
chorus-of-confusion-grows-over-trudeaus-tpp-position
Financial Post – December 21, 2017

6. Competitiveness Comparison – Japan and Canada -
Taxation
Source - https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-japanguide-
2017.pdf or https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-
canadaguide-2017.pdf or http://www.gulf-times.com/story/550187/Japan-s-environment-minister-puts-
carbon-tax-foes-
Policy Canada Japan
CorporateTax 26.5% 23.4%
PayrollTaxation 1.95% to 4.2% of gross
payroll
.25% of gross payroll
CarbonTaxation Mandatory carbon tax for
all provinces (2018)
Not implemented
ConsumptionTaxes 13% (average Fed/Prov) 8% (Talks to move to 10%)

7. Research and Development
Source -http://www.visualcapitalist.com/global-leaders-r-d-spending/
• Japan spends twice as much as Canada does on R&D

8. Japan and Manufacturing
Source - http://www.newequipment.com/industry-trends/what-world-can-learn-japans-factories?NL=QMN-01&Issue=QMN-01_20171229_QMN-01_133&sfvc4enews=42&cl=article_6&utm_rid=CPG03000001519274&utm_campaign=24027&utm_medium=email&elq2=419d60aa49d64b7a9e256e4018ab6476
Here is what Japan has done to support manufacturing:
• Japan has wisely moved away from its usual semi-protectionist tactics to embrace more open trade.
On Dec. 8, Japanese negotiators finalized the terms of a sweeping free-trade agreement with the
European Union, whileTokyo has also led efforts to complete theTrans-Pacific Partnership after the
U.S. withdrew. A U.S. administration that’s been quick to deride free-trade agreements should take
note.
• Of course, Japan’s success can’t be separated from the revived global economy overall. Exports are
revving up Japan’s factories, just as they always have. In October, exports, by value, jumped 14% from
the year before.

9. Canada and Manufacturing
 The association, which represents thousands of manufacturers across the country, said
Oct. 2 that the changes pursue “too-narrow” a definition of tax fairness and could have
“devastating consequences” for small manufacturing businesses. Source -
https://www.canadianmanufacturing.com/manufacturing/tax-reform-devastating-
small-manufacturers-cme-says-202423/
 Canadian Manufacturers & Exporters, the voice of over 10,000 leading manufacturers
and exporters, is encouraged by the commitment the Government of Canada has
made to support and enhance the global competitiveness of advanced manufacturing
through the strong commitment to innovation and skills training with Budget 2017.
Source - http://www.cme-smart.ca/single-post/2017/03/22/Canadian-Manufacturers-
Applaud-Government-Action-to-Support-Advanced-Manufacturing

10. Bottom Line
 Canada needs to focus on being more competitive
 Canada has some of the highest hydro rates in the world
 Canada regulatory process is delaying projects getting off the ground and/or seen projects
cancelled (Kinder Morgan – delay,TransCanada East-West Pipeline-canceled, LNG Plants
canceled, etc.)
 The federal government is pushing carbon taxation -
http://www.cbc.ca/news/canada/saskatoon/australian-carbon-tax-opponent-chris-berg-
saskatchewan-1.3884765
 It is not one policy that drives business investment, but many policies
 There is no integrated strategy between Federal Government and the Provinces in terms of
setting policies to attract FDI.